What to Note When Signing Labour Contract with Foreign Workers?

When Labour Contract With Foreign Workers is Needed?

With the global geographical tension, and uneven recovery from pandemic, there are weaker demands on employment. Further, because of the development of technology, s sometime the employee is not required to be physically at work place (or only work remotely).

Hence, this would lead to negligence between parties to engage in tasks that have the nature of employment without proper agreement and labour compliance.  

Even the contract is named consulting or the workers are thought to be contractors, if they work to receive regular income, the relationship created could still be construed as labour agreement.  

Having said that, the negligence would create future disputes between the employers and foreign employees when discrepancies would appear out of nowhere.  

That is when labour contract is needed and why there are attentions to be paid to when signing labour contract  with foreign workers.

Why Signing Labour Contract with Foreign Workers is Required by Law?

With the policy of opening the economy in Vietnam, not only Vietnam attracts investors to set up company in Vietnam, but also the demand for foreign workers in enterprises grows and diversifies. However, in order for Vietnam companies to be able to use foreign workers legally, they must sign a labor contract, sponsor visas and work permits in Vietnam.    

After meeting the conditions specified in the Labor Code on the requirements for recruitment and working in Vietnam, the the employers have to sign labour contract with foreign workers working in Vietnam before the expected date intend to work for the employer.

In this contract, the employer and the foreign worker will agree on all issues arising in the process of working as well as using labour together.  

What to Include in Labour Contract With Foreign Workers?

Work Position

Firstly, on the working position in the labour contract, it must show the correct position and position for which the employer has determined the needs with the competent authority and in accordance with the working position shown in the document and the work permits which have been granted to foreign workers.

Work Time

Regarding the working time, it will normally be agreed upon by the two parties but must not exceeding the number of working days (hours) as prescribed by Vietnamese law. The number of overtime hours must be based on voluntary work and must ensure rest time, rest during working time and weekends for foreign workers.

Holidays

According to the provisions of the Labor Code, in addition to Vietnamese public holidays and New Year’s holidays, foreign workers are allowed to take one more day off for the national traditional New Year and one national day of the country. This is a humane regulation, respecting the national culture of Vietnam. Therefore, the employer needs to learn about the National Day and the traditional Tet holiday of foreign workers so that the employees can take leave in accordance with the provisions of the law.

Duration

Regarding the term of the labour contract, the term of the labor contract for foreigners is also governed by the duration of the work permit issued by the competent Vietnamese authority. Accordingly, the term of the labour contract with foreign workers working in Vietnam must not exceed the term of the work permit. Therefore, the employer should pay attention to conclude the contract term in accordance with regulations.

Dispute Resolution

In addition, employers and foreign workers should be aware of the terms of disputes which could potentially arise. Because, contract terms are an important legal basis to resolve when a labour dispute arises, agreeing in advance on how to resolve a dispute when a dispute arises will create a clear legal foundation for easy settlement by both parties.  Dispute lawyers are suggested to be consulted at an early stage to avoid dispute escalation.

About ANT Lawyers, a Law Firm in Vietnam

We help clients overcome cultural barriers and achieve their strategic and financial outcomes, while ensuring the best interest rate protection, risk mitigation and regulatory compliance. ANT lawyers has lawyers in Ho Chi Minh city, Hanoi,  and Danang, and will help customers in doing business in Vietnam.