Labour changes proving hard work

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An expert at the Ministry of Labour, Invalids and Social Affairs (MoLISA) said Circular 31/2011/TT-BLDTBXH implementing Decree 46/2011/ND-CP and Decree 34/2008/ND-CP “had basically met requirements of foreigners working in Vietnam”.

The expert referred to   two provisions of Decree 46 “criticised the most by foreign business associations in Vietnam” which had been clarified with Circular 31, to take effect from December 18, 2011.

The first guidance involves Decree 46’s provision on the advertisement of recruitment of foreigners in local newspapers and submitting the advertisement as part of the application document for hiring the foreigners.

Under Circular 31, if the employer already advertised the recruitment on two issues of national and local newspapers without results, in the next 36 months it could conduct the employment without having to advertise again.

The second guidance involves Decree 46’s provision on the extension of a foreign employee’s work permit. Under the Decree, the employer must enter into an apprenticeship contract with a Vietnamese employee expected to substitute the relevant foreign employee.

However, Circular 31 provided that if an employer does not have such a training contract with a Vietnamese employee, it could show a document proving that it has implemented a programme or plan to train Vietnamese to substitute the relevant foreign employee.

The MoLISA expert noted that Decree 46 was only applicable for foreigners with labour contracts in Vietnam, “not all types of foreigners working in the country”. According to the MoLISA statistics nearly 78,000 foreigners are working in Vietnam with roughly one thid having a labour contract.
Baker&McKenzie Vietnam Limited managing director Frederick R.

Burker said Decree 46 and Circular 31 “include a lot of stumbling-blocks”, underlining the requirement of a traineeship contract with Vietnamese for every employer who wanted to extend the work permit for their foreign employees.

“In fact, some foreign employees cannot be replaced by Vietnamese, so the contract is unnecessary and impractical,” he said. “The regulations need to be further improved and the government needs to take them very seriously, as they would be an obstruction to Vietnam’s further attraction of foreign investment,” Burker said.

Meanwhile, the 760-member European Chamber of Commerce in Vietnam (EuroCham), which represents the Vietnam-based commercial and industrial chambers of France, Canada, Germany, Switzerland, Britain and Norway, said the requirement of an apprenticeship contract with a Vietnamese employee would mean a big roadblock for foreigners working in Vietnam.

“We hope that in practice, the alternative [documentary proof of training programme for Vietnamese employee] is applied, and no training contract will be required.,” said EuroCham Human Resources and Training Committee chairwoman Nicola Connolly.

“However, some of our members have already reported that despite the alternative wording in Circular 31, they are being asked for an individual training contract with a named Vietnamese person to replace the foreigner.

“We are afraid this puts a lot of administrative pressures and burdens in the way, especially for small- and medium enterprises which do not have training programmes in place and no professional resources to deal with additional administrative requirements. It remains unclear under Circular 31 if a training contract or only a general training programme is required,” said Connolly.

EuroCham said the training contract requirement was unnecessary as its members and other foreign businesses were consistently promoting their Vietnamese staff and “localising” without any law requiring them to do so.

“The foreign business community are concerned that the new Decree 46 and the Circular 31 will discourage investment in Viet