New labour rules to ease investor concerns

This decree will replace Decree 34/2008/ND-CP and Decree 46/2011/ND-CP on recruitment and management of foreign employees in Vietnam.
Under Decree 46, at least 30 days prior to any recruitment of foreigners, Vietnam-based companies must publicly inform recruitment demands for Vietnamese for positions that they expect to employ foreigners in at least one issue of a national and regional newspaper. Companies must present evidence they have first advertised for a Vietnamese to fill the position before applying for work permits for foreigners.
Decree 46 also states that for projects needing 500 workers or more, foreign employers have 60 days to recruit local workers. For projects requiring less than 500 labourers, foreign employers have 30 days for this recruitment.
If they cannot recruit enough Vietnamese workers in the given timeframe, provincial or municipal people’s committees can allow them to recruit foreign labourers for those positions they could not fill with Vietnamese employees.
Also under Decree 46, in order to extend work permits for a foreign employee, a company must enter into a training contract with a Vietnamese employee expected to substitute the relevant foreign employee.
The above requirements which have encountered strong opposition from foreign business associations over the past few years are removed under the new decree draft.
“EuroCham has worked with the MoLISA over the last three years of consultations on the new Labour Code and issuing decrees. We are very pleased that the ministry listened to the recommendations of EuroCham and the Vietnam Business Forum (VBF),” said EuroCham HR and Training Sector Committee head Nicola Connolly.
While agreeing that some of foreign investors’ concerns have been addressed, AmCham’s executive director Adam Sitkoff noted that “the Labour Code and implementing regulations still contain a number of provisions regarding work permits and labour contract rules that cause great concern for foreign workers in Vietnam and the organisations that employ these foreign workers.”
For instance, under the draft decree, in terms of work permit time limits, the draft decree stipulates that it is a maximum of 24 months. Meanwhile, the time limit under Decree 34 is a maximum of 36 months.