Settlement of labor contract disputes for foreigners in Vietnam

During the period of economic integration and globalization, the fact that foreigners come to Vietnam to work is becoming more and more popular, along with that, there are more and more cases when foreigners and Vietnamese employers have a dispute related to the labor contract. The article will address some issues related to the settlement of labor contract disputes for foreigners in Vietnam.

What is a labor contract dispute and the methods to settle labor contract disputes for foreigners in Vietnam?

Settlement Of Labor Contract Disputes For Foreigners In Vietnam With Ans Law
Settlement Of Labor Contract Disputes For Foreigners In Vietnam. Copyright of ANS Law – Vietnam Law firm

According to Article 179 of the Labor Code 2019,  labor dispute means a dispute over rights, obligations and interests among the parties during the establishment, execution or termination of labor relation; a dispute between the representative organizations of employees; a dispute over a relationship that is directly relevant to the labor relation. There are two types of labor disputes: labor disputes and collective labor disputes, each with different methods of dispute resolution. In the cases of labor contract disputes with the party of foreigners is the individual labor disputes.

Some of the ways to resolve labor contract disputes are: conciliation, arbitration and the court.

Principles on labor contract disputes settlement for foreigners in Vietnam

The Labor Code 2019 specifies the principles of labor dispute settlement in general. These principles therefore also apply when resolving labor contract disputes for foreigners. Specifically, the principles are:

  1. Firstly, Vietnamese law stipulates that the settlement of labor disputes is based on the respect the parties’ autonomy through negotiation throughout the process of labor dispute settlement.
  2. Second, Vietnamese law prioritizes  the settlement of labor disputes through conciliation (mediation) and arbitration on the basis of respecting the rights and interests of the two disputing parties, respecting the public interests of the society and conformity with the law.
  3. Third, the settlement of labor disputes must be public, transparent, objective, prompt, lawful.
  4. Fourth, the settlement of labor disputes must ensure the participation of representatives of both parties in the process of labor dispute settlement.
  5. Fifth, the settlement of labor disputes shall be initiated by a competent subject after it is requested by a disputing party or by another competent subject and is agreed by the disputing parties.

Competent subjects on labor contract disputes settlement for foreigners in Vietnam

The competent subjects to settle labor contract disputes for the foreigner are the Labor Mediator, the Labor Arbitration Council and the People’s Court. Those have the features follow:

  • Labor mediator: Vietnam’s labor law stipulates that this is a mandatory step before filing a suit to the Labor Arbitration Council or the Court. It means that labor contract disputes for foreigners usually have to go through the labor mediator, except for disputes in some cases as prescribed by law:
    • Cases of labor disputes over dismissal for disciplinary reasons; unilateral termination of employment contracts;
    • Cases of compensation for damage or  allowances upon the termination of labor contracts;
    • Disputes between the domestic worker and the employer;
    • Disputes relating to social insurance, health insurance, unemployment insurance, occupational accident insurance;
    • Disputes between the re-employed employee and the re-employed employer.
  • The Labor Arbitration Council: The Labor Code 2019 stipulates that the disputing parties have the right to request the Labor Arbitration Council to resolve labor disputes and specifically labor contract disputes for foreigners. When requesting the Labor Arbitration Council to settle disputes, the parties may not concurrently request the Court to resolve the dispute.
  • The Courts: According to the 2015 Civil Procedure Code, Article 32 and Article 35, labor contract disputes for foreigners will fall under the jurisdiction of the  People’s Courts of districts. However, in cases of dispute settlement which involve parties or properties in foreign countries or which must be judicially entrusted to representative agencies of the Socialist Republic of Vietnam overseas or to foreign courts/competent agencies shall fall under the jurisdiction of the People’s Courts of provinces. The territorial jurisdiction of the court, in this case, is the Court where the defendant resides and works if the defendant is an individual or where the defendant has the headquarter if the defendant is an organization. In case, there is a written agreement, the court where the plaintiff resides or is located may have jurisdiction to resolve. Thus, in normal cases, the People’s Court of districts where the defendant resides or has the headquarter will have jurisdiction to resolve labor contract disputes involving cases having foreign elements.

Procedures for settling disputes over labor contracts for foreigners in Vietnam

Procedures For Settling Disputes Over Labor Contracts For Foreigners In Vietnam Ans Law Vietnam Law Firm Copy
Procedures For Settling Disputes Over Labor Contracts For Foreigners In Vietnam Ans Law Vietnam Law Firm Copy
  • First, resolving individual labor disputes through the labor mediator. This is a mandatory step of the procedure for resolving labor disputes according to the provisions of the Labor Code 2019, except for some cases as mentioned above. Accordingly, the disputing parties may submit a petition to the labor mediator or to the labor-specialized agency of the People’s Committee. The law also stipulates that the labor mediator must complete the mediation within 5 working days from the date of receipt of the request for mediation (Clause 2, Article 188 of the Labor Code 2019).
  • Second, after the mediation is not mandatory, the labor mediator fails to initiate the mediation, or  the mediation is unsuccessful, the parties may agree to choose one of the two following forms of dispute settlement:
    • Settlement of disputes at the labor arbitration council: The arbitration council’s judgment is the final one, if one party does not execute the dispute settlement decision of the labor arbitration council, the other party has the right to file a suit to the court to settle.
    • Settlement of labor disputes in court. In the case that the jurisdiction does not belong to the labor arbitration, the court will resolve the labor contract dispute for the foreigner in demand from one party. And then, the labor contract dispute settlement procedure will be similar to the procedure for resolving civil cases at the Court in accordance with the provisions of the procedural order and procedures of the Civil Procedure Code 2015.

Time limits for requesting settlement of individual labor contract disputes for foreigners in Vietnam.

  • The limitation period for requesting the labor mediator to perform mediation of a personal labor dispute is 06 months from the date of discovery of the act in which the disputing party believes their legitimate rights and interests are breached.
  • The limitation period for requesting the Labor Arbitration Council to settle individual labor disputes is 9 months from the date of discovery of the act in which the disputing party believes that their legitimate rights and interests are breached.
  • The limitations period for requesting the Court to settle an individual labor dispute is 01 year from the date of discovery of the act in which the disputing party believes that their legitimate rights and interests are breached.
  • Thus, the settlement of labor contract disputes for foreigners in Vietnam is specified in accordance with the labor code and civil code through 3 forms of mediator (conciliation), arbitration and court. The parties can choose suitable methods as permitted by law.