(PART ONE OF A TWO – PART ARTICLE)

On January 20, 2014, the Ministry of Labor, Invalids and Social Affairs (MOLISA) issued Circular No. 03/2014/TT-BLDTBXH guiding a number of articles of Decree No. 102/2013/ ND-CP of the Government dated September 5, 2013 implementing the Labor Code on foreigners working in Vietnam. Effective as from March 10, 2014, this circular shall replace Circular No. 31/2011/TT-BLDTBXH of the MOLISA dated November 3, 2011 providing implementing guidelines for Decrees of the Government No. 34/2008/ND-CP dated March 25, 2008 and No. 46/2011/ND-CP dated June 17, 2011 on recruitment and administration of foreigners working in Vietnam. Noteworthy points follow.

Interpretation of terms

According to Article 2 of Decree 102, this decree applies to foreign citizens (abbreviated to foreigners) working in Vietnam in the following forms:

(i)             Performance of a labor contract;

(ii)            Internal transfer within an enterprise;

(iii)           Performance of any of the following types of contracts or agreements namely economic, commercial, financial, banking, insurance, scientific and technical, cultural, sporting, educational, vocational training and medical health contracts;

(iv)          Service providers pursuant to a contract;

(v)           Foreigners offering services;

(vi)          Foreigners working for a foreign nongovernmental organization or international organization which is permitted to operate by the law of Vietnam;

(vii)         Volunteers;

(viii)        People responsible to establish a commercial presence;

(ix)          Managers, executive operators, experts and technicians; and

(x)           Foreigners participating in performance of tender packages or projects in Vietnam.

For the avoidance of doubt, Circular 03 interprets a number of definitions under Article 2 of Decree 102 as follows: (i) Service provider pursuant to a contract as stipulated in Article 2.1 (iv) of Decree 102 above means a foreign worker who has worked for at least two years (24 months) in a foreign enterprise which does not have a commercial presence in Vietnam, and who satisfies the conditions that (a) he/she has been recognized by a foreign country as an expert or foreign worker with qualifications at the level of engineer, bachelor’s degree or higher or similar level, and (b) he/she has at least five years’ experience working in the speciality in which he or she was trained. (ii) A foreigner working in the form of offering services as stipulated in Article 2.1 (v) of Decree 102 above means a foreign worker not living in Vietnam and who does not receive remuneration from any source whatsoever in Vietnam, who participates in activities relating to representation of a service provider in order to negotiate sale of such service provider’s services, on condition that he or she does not directly sell such services to the public and does not directly participate in provision of the services. (iii) Manager or executive director as stipulated in Article 2.1 (ix) of Decree 102 above means a foreign worker directly participating in management in an organization or enterprise and including directing the organization or enterprise or its subsidiary; and/or supervising and controlling the work of expert staff, managers or other supervisors.

Employer’s need to employ foreigners

Generally, an employer (excluding a contractor) must, at least 30 days prior to the date on which it proposes to recruit foreigners, report and explain its need to employ foreigners, comprising: the working positions, the number of people, the level of qualifications and experience, the salary level and the duration of the jobs, and directly lodge such report with the Department of Labor, Invalids and Social Affairs (DOLISA) in the province or city under central authority in the locality where such employer has its head office, on Standard Form 1 issued with this circular. Similarly, an employer who has received consent to employ foreigners but changes its need to employ foreigners must also directly lodge a report explaining any such amendments or additions at least 30 days prior to the date on which it is proposed to recruit a new foreign employee or additional foreign employee, or recruit a foreigner to replace a current foreign employee, with the DOLISA in the locality where such employer has its head office, on Standard Form 2. (to be continued)

Source: The Saigon Times Weekly (No. 11-’14 (1172) dated March 15^th 2014