Some Notes On Labour Disputes Involving Foreign Elements

International economic integration leads to the emergence of more and more labour relations involving foreign elements. Accordingly, labour disputes involving foreign elements have also tended to increase in recent years. To provide information to readers, this article will give some notes on labour disputes involving foreign elements that need attention.

1. Labour disputes involving foreign elements

According to Article 179 Labour Code 2019, a labour dispute means a dispute over rights, obligations and interests among the parties during the establishment, execution or termination of labour relation; a dispute between the representative organisations of employees; a dispute over a relationship that is directly relevant to the labour relation. Types of labour disputes:

• – Labour disputes between the employee and the employer; between the employee and the organisation that sends the employee to work overseas under a contract; between the outsourced worker and the client enterprise.
• – Right-based or interest-based collective labour disputes between one or several representative organisations of employees and the employer or one or several representative organisations of employees.

Labour disputes involving foreign elements can be understood as labour disputes with civil relations involving foreign elements.

Civil relation involving a foreign element means a civil relation in any of the following cases: (i) at least one of the participating parties is a foreign individual or legal entity; (ii) the participating parties are Vietnamese citizens or legal entities but the establishment, modification, implementation or termination of such relation happened in a foreign country; (iii) the participating parties are Vietnamese citizens or legal entities but the subject matter of such civil relation is located in a foreign country[1].

2. Some notes on labour disputes involving foreign elements

• Law applicable to resolve labour disputes involving foreign elements

According to Article 664 of the Civil Code 2015, the determination of the law applicable to resolve disputes regarding civil relations involving foreign elements is as follows:

• (i) The law applicable to civil relations involving a foreign element shall be determined in accordance with an international treaty of which the Socialist Republic of Vietnam is a member or in accordance with the law of Vietnam.
• (ii) Where an international treaty of which the Socialist Republic of Vietnam is a member or the law of Vietnam stipulates that the parties have the right to choose the applicable law, the law applicable to a civil relation involving a foreign element shall be determined at the choice of the parties.
• (iii) Where it is impossible to determine the applicable law as provided in clauses (i) and (ii) hereof, the applicable law shall be the law of the country which has the closest connection with such civil relation involving a foreign element.
• Methods of resolution to labour disputes involving foreign elements

According to Article 187 and Article 191 Labour Code 2019, the agencies, organisations and individuals are authorised to resolve individual labour disputes and right-based collective labour disputes, including (i) labour conciliators; (ii) labour arbitration councils; and (iii) people’s courts. These labour disputes must be conciliated by a conciliator prior to requesting the labour arbitration council or a court to resolve it, except for the cases mentioned in Item 3 below.

According to Article 195 Labour Code 2019, the organisations and individuals are authorised to interest-based collective labour disputes, including (i) labour conciliators; and (ii) labour arbitration councils. An interest-based collective labour dispute must be resolved via conciliation procedures of a labour conciliator prior to requesting the labour arbitration council to resolve the matter or before conducting procedures to strike.

3. Some notes when choosing the method of resolution to labour disputes involving foreign elements through the courts

Firstly, in principle, labour disputes shall pass through procedures for conciliation by a labour conciliator prior to a petition to a court to resolve the dispute, except for the following labour disputes for which it is not mandatory to conduct conciliation procedures[2]:

• (i) A dispute relating to the disciplinary measure of dismissal or arising from unilateral termination of a labour contract;
• (ii) A dispute relating to the payment of compensation for loss and damage or payment of allowances upon the termination of a labour contract;
• (iii) A dispute between a domestic servant and the employer;
• (iv) A dispute relating to social insurance in accordance with the law on social insurance, or health insurance in accordance with the law on health insurance, or job loss insurance in accordance with the law on employment, or relating to insurance covering a labour accident or occupational disease in accordance with the law on occupational safety and hygiene;
• (v) A dispute relating to the payment of compensation for loss and damage between an employee and an enterprise or organisation sending a worker to work overseas pursuant to a contract; and
• (vi) A dispute between a sub-leasing employer and the sub-leased employee.

Secondly, in case the statutory time-limit for conciliation has expired without the conciliator conducting a conciliation, or the conciliation was unsuccessful[3], or one of the parties fails to enforce the decision resolving the dispute made by the labour arbitration tribunal, then the parties have the right to petition the Court to resolve the matter[4].

3.1     Sequence and procedures for resolving labour disputes involving foreign elements at Court

According to Civil Proceedings Code 2015, sequence and procedures for resolving labour disputes involving foreign elements at Court include:

Step 1: Submit the petition to the competent Court

The applicant shall lodge the application and enclosed data and evidence currently held by it to the competent Court for the resolution to the case.

Of notes: The labour disputes which involve a concerned party or property abroad or require judicial authorization to the representative mission of the Socialist Republic of Vietnam abroad or a foreign court or competent foreign agency shall not fall under the jurisdiction of the district people’s Courts[5].

Step 2: Procedures for receipt and acceptance of the applications for initiation of a legal action

Within 03 working days from the date of receipt of the application, the chief justice of the Court shall assign a judge to consider the application[6].

Within 05 working days from the date of assignment, the judge shall consider the application and carry out the procedures for acceptance of the case in accordance with the law[7].

Of notes: The judge shall accept the case when the applicant submits a receipt for the payment of the court fee deposit. Where the applicant is entitled to exemption from, or is not required to make payment of a court fee deposit, the judge shall accept the case upon receipt of the application and enclosed data or evidence[8].

Step 3: Conciliation and preparation for trial

The judge shall hold a meeting to check the delivery, access and disclosure of evidence and to carry out the conciliation between the concerned parties.

Applicable to the civil cases in which conciliation is not allowed or is unable to be carried out as stipulated in article 206 or 207 of Civil Proceedings Code 2015, the judge holds a meeting to check the delivery, access and disclosure of evidence but does not carry out a conciliation[9].

Step 4: The first instance court

Within a period of 01 month from the date of the decision bringing the case to a hearing, the Court shall conduct a trial; if there are proper reasons, this period may be 02 months[10].

4. Templates of labour contract involving foreign elements

For more details on the template of labour contract involving foreign elements, please refer to the template of labour contract of the book “Hard to find templates of Human Resource Relating to Labour Law” by Lawyer Nguyen Huu Phuoc on page 56.

Of notes: In comparison with ordinary labour contracts, labour contracts involving foreign elements should be noted the following points:

• (i) Regarding the public holidays and New Year of foreign employees working in Vietnam, in addition to the public holidays prescribed by Vietnamese laws and regulations on labour, their labour contracts must be specified one more traditional public holiday and one more national day of their country[11].
• (ii) Regarding salary payment, salary will be transferred via the employee’s bank account. Foreign employees in Vietnam may be paid in foreign currency or Vietnamese Dong according to the agreed labour contract[12].

Above is an overview of some notes on labour disputes involving foreign elements. If you have trouble with legal issues regarding the labour disputes involving foreign elements, please contact us: Phuoc & Partners is a professional consulting firm established in Vietnam and currently has nearly 100 members working in three offices in Ho Chi Minh City, Hanoi and Danang. Phuoc & Partners is also rated as one of the leading consulting firms specializing in business law in Vietnam that has leading practice areas in the legal market such as Labour and Employment, Taxation, Merger and acquisition, Litigation. We are confident in providing customers with optimal and effective service.

[1] Article 663.2 Civil Code 2015

[2] Article 188.1 Labour Code 2019

[3] Article 188.7.b and Article 192.2.b Labour Code 2019

[4] Article 189.5 and Article 193.6 Labour Code 2019

[5] Article 35.3 of Civil Proceedings Code 2015

[6] Article 191.2 of Civil Proceedings Code 2015

[7] Article 191.3.b of Civil Proceedings Code 2015

[8] Article 195.3 and Article 195.4 of Civil Proceedings Code 2015

[9] Article 208.2 of Civil Proceedings Code 2015

[10] Article 203.4 of Civil Proceedings Code 2015

[11] Article 112.2 Labour Code 2019

[12] Article 95.2 Labour Code 2019