Assigning the Employees to Work Abroad – Notes for Enterprises

(Le Thi Minh Chau – Phuoc & Partners)

In the era of a “flat world”, more and more enterprises in Vietnam wishing to send their employees abroad to meet with partners and customers for negotiating, signing or implementing economic contracts… With regards to foreign capital-owned enterprises or global corporate groups, the holding of the “internal transfer” programs or assigning Vietnamese employees to attend training courses abroad at the parent companies or the companies in the same group are happening more often. For specific industries and occupations that require employees to be under special training or for protecting business secrets, it is also necessary to require employees to take long-term business trips abroad.

Besides the compliance with the related provisions of the Labour Code 2019, another equally important but less noticeable legal framework is the Law on Vietnamese Working Abroad Under Contracts Number 72/2006/QH11 (hereinafter referred to as “Law No. 72”). The applicable entities of Law No. 72 are not only enterprises providing “exporting labourers” services, e.g. companies doing the services of sending workers abroad but also “normal” enterprise who delegates their employees to work, take an assignment or take a training course abroad.

Practical application of the law

After more than 13 years of being in force, as the provisions of Law No. 72 showed its insufficiency and in the need of being updated, it will be superseded by the Law on Vietnamese Working Abroad Under Contracts Number 69/2020/QH14 (hereinafter referred to as “Law No. 69”) which has been adopted by the National Assembly on 13 November 2020. Law No. 69 will take effect as from 01 January 2022.

Pursuant to Law No. 72, when an enterprise delegates an employee to work, take an assignment or take a training course abroad, it must take the obligation to register with and report to the competent labour authority before and after its employees crossing out the border of Vietnam, together with periodic reports on the situation of employees working abroad. Although Law No. 72 stipulates specific legal requirements, most enterprises have not duly performed the obligation of registration and reporting when delegating the employees to work, take an assignment or take a training course abroad[1]. This non-compliance renders the Vietnamese labour authorities or the overseas diplomatic presence of Vietnam have no information of the employees working overseas to effectively defend the Vietnamese citizens in case of the employee committing an offence against the local laws, getting into labour disputes with their foreign employers, or even acts of God or devastation that may render the employees immediately to be evacuated back to their hometowns. More importantly, in the context of the outbreak of the Covid-19 pandemic since 2020 until now, it has led Vietnamese working abroad to be seriously and adversely impacted, the Law No. 69 is expected to be more strictly enforced compared with its antecedent.

In the light that the Covid-19 pandemic may soon be controlled by the Governments of many countries in 2022, the Vietnamese enterprises will need to keep updated with the requirements of Law No. 69 for compliance with those requirements when delegating the employees to work abroad. The prompt update and education of the legal framework of the concerned matter provide the enterprises with a more proactive and timely approach when the borders between countries being gradually removed and the demand for cooperating and partnering with regard to financial and human resources will be re-connected.

Below is a brief analysis on the substantial changes of Law No. 69 which will affect the enterprises. The main changed and supplemented provisions of the Law No. 69 are to tighten the obligations of the enterprises when delegating the employees to work or take training courses abroad. The most noticeable one is the obligation of the employers in case of a force majeure event (such as wars, pandemics, acts of God…) when the employees being abroad for working, taking assignments or attending training courses.

Allocating more responsibility to the enterprises

The enterprises will bear the obligations to act as per the orders of the competent State authorities and to coordinate with the local authorities to resolve the dispute involving the employees. Those obligations will be imposed on the enterprises in the cases where the employees die or meet an accident, being infringed on the health, honour, life, prestige or dignity, or being affected by natural disasters, epidemics, wars, political instability, economic recession, state of emergency, or other force majeure reasons[2].

When Law No. 69 comes into force, it might be understood that an enterprise shall take full responsibility towards its employees encountering an incident while being abroad. More importantly, the enterprise must perform those obligations upon the directions and orders of the competent State authorities of Vietnam to the full extent of the damage suffered by the employees. Accordingly, the enterprises do not have any ground for declining competent State authorities’ orders upon the consideration that the enterprises should make payments for the employees’ expenses. The expenses incurred due to the incidents may be include but not limited to the costs of accommodation, legal proceedings or medical examination and treatment. While there is still no legal document guiding Law No. 69, it is vague on the scope and limitation of liability that the competent Vietnamese authorities can order the enterprises to obey. Therefore, the enterprises should make plans and estimate the financial risks before assigning the employees to work or take training courses abroad.

Issuing “orientation” certificates

Before assigning employees to work abroad under any form, the enterprises must arrange orientation courses for the employees and issue certificates on the completion of the orientation courses. However, for ensuring the enforceability of this rule, the Ministry of Labour, War Invalids and Social Affairs should adopt guiding regulations on the organization methods, contents and length of the course and the issuance of the completion certificates.

To avoid the legal risks of being imposed a fine of from 20 million VND to 40 million VND when being detected of the violation[3], the enterprise should monitor and update the guiding regulation of Law No. 69 to ensure the full and timely compliance with the regulations on the organisation of the orientation course and the issuance of the completion certificates.

Signing appendices to the labour contracts

When sending the employees abroad to implement bid contracts signed with overseas partners or customers or implement the enterprises’ investment projects, the enterprises must reach an agreement with the employees such assignment by signing an appendix to the labour contract. The contents of the appendix to the labour contract must include the term, working hours, rest hours, overtime, wages, working conditions, living conditions, medical examination and treatment regimes and other benefits and regimes to the employees. Besides, the enterprise must not amend the term of the labour contract[4]. Hence, when signing the appendix to the labour contract, the parties should negotiate on the duration of working abroad and then stipulate it in the appendix to the labour contract; provided that such duration must fall within the term of the signed labour contract.

Update on the employees’ departure

Law No. 69 also stipulates the obligation of enterprises to update information about employees’ departure on the database system of Vietnamese employees working abroad under contracts within 05 working days of the date the employees going abroad. If not updating as required by laws, the enterprises shall be imposed an administrative fine of from 10 million VND to 20 million VND if being detected[5].

New points on reporting regime of the enterprises

Law No. 69 abolishes Law No. 72’s annual report regimes for the enterprises sending the employees abroad to implement bid contracts with overseas partners and customers. Accordingly, the enterprises are only obliged to make reports when the enterprises have fulfilled the bid contracts or ad-hoc reports at the request of the Ministry of Labour, War Invalids and Social Affairs.

Besides, Law No. 69 also cuts down the processing time for the administrative procedure at the competent State authorities, which is 05 working days instead of 10 working days. The type of report for which the time is cut includes: (1) report on sending Vietnamese employees abroad to implement overseas contracts; (2) registration of vocational training contract; and (3) report on delegating Vietnamese working abroad with regard to overseas investment of Vietnamese individual and organization.

Not to pay social insurance and personal income tax twice, the deposit confirmation template is available for banks

Law No. 69 adds the regulation that the enterprises and the employees are not obliged to pay the social insurance premium and/or personal income tax twice, e.g. one payment in Vietnam and another at the country which the employees are sent to; provided that Vietnam and that country have signed an international treaty to avoid double taxation or double payments on social insurance premium.

Regarding the escrow obligation, the deposit level is still maintained at 10% of the economy class one-way airfares from the country where the employees come for work to Vietnam multiplied with the number of employees at the time the enterprise deposits in accordance with the vocational training contracts registered. Besides, it should be noted when the enterprises put the deposit in a bank, the enterprises shall request the bank to issue a deposit confirmation letter as per Form No. 5 of Appendix II attached to the Decree 38/2020/ND-CP instead of using the bank’s own letter form.

The employees have the right to unilaterally terminate the labour contracts

Law No. 69 adds the employees’ rights to unilaterally terminate the labour contracts when being abused or subject to labour coercion, when the lives or health of the employees being threatened or being sexually harassed during the time they work abroad[6]. The changes are also complied with point c, clause 2, Article 35 of the Labour Law 2019 that the employees have the right to unilaterally terminate the labour contracts without having to perform the obligation on advance notice for such cases.

In summary, Law No. 69 basically inherits the existing regulations of Law No. 72, allowing the enterprises to send the employees abroad to work or attending vocational training courses. Besides, some amendments and supplements have also been legislated for the purpose of transparency of the administrative procedures that enterprises must perform as well as setting some additional obligations for the enterprises towards the employees when the enterprises assign the employees to work or take a training courses abroad. In addition, in order not to fall into a difficult position when Law No. 69 comes into force from 01 January 2022, the enterprises should carefully estimate the legal and financial risks when assigning the employees abroad for the purposes mentioned above.

[1] Report No. 43/BC-BLDTBXH dated 01 April 2020 on implementation of the Law on Vietnamese Working Abroad Under Contracts Number 69/2020/QH14 of Ministry of Labor, War Invalids and Social Affairs

[2] Clause 9 Article 32, Clause 9 Article 35, Point m Clause 2 Article 41 of the Law No. 69

[3] Clause 2 Article 44 of the Decree 28/2020/ND-CP

[4] Article 22 of the Labour Code 2019

[5] Article 42 of Decree 28/2020/ND-CP

[6] Point dd Clause 1 Article 6 of the Law No. 69