“Foreign employees working in Vietnam shall comply with either Vietnam’s Law on Labor or foreign law, depending on the nationality of the company they work for.“
Vietnam’s law regulates that a “foreigner” means a person who does not have a Vietnamese citizenship. Therefore, a foreign employee in Vietnam is understood as a person working in Vietnam but does not have Vietnamese nationality. Based on Vietnam’s legal policies, foreigners working in Vietnam can be divided into two basic categories: those working for foreign employers and those who work for Vietnamese employers.
Foreign nationals working for the commercial presence of a foreign enterprise in Vietnam (i.e. the foreign employer) are those who have signed labor contracts overseas, under foreign laws. Thus, their rights and obligations will be governed by the law of the company’s home country if the employer and employees do not agree on the law applicable to the labor contract.
Such foreign employees enter Vietnam to work in the form of enterprise’s internal transfer. Therefore, in principle, Vietnam’s law is not applicable to them. On the other hand, in areas related to labor issues such as insurance, union, etc., these foreign employees do have the rights to participate in a foreign-based insurance and to be members of the national union of the enterprise’s home country even though they are working on the the territory of Vietnam.
In contrast, foreigners that work for Vietnamese employers will have their labor legal status governed by the law of Vietnam, except for a few cases provided by international treaties to which Vietnam is a contracting party. Specifically, the provisions of the Labor Code on working time, rest time, labor safety and labor hygiene, labor discipline, material responsibilities, etc., will be applied; whereas the provisions relating to trade unions and insurance (except for mandatory health insurance) are not yet applied to foreigners who work for Vietnamese employers.
Foreign employees working in Vietnam are protected by either Vietnam’s law or foreign law based on their labor contracts and agreements between the involved parties.
PLF Law Firm