Answer:
- Case 1: The Foreign Employee’ work permit is issued at the Employer’s request, but the Employer does not sign the LC with the Employee.
If any foreign Employee falls into a subject whom the Employer must sign a LC after his or her work permit is issued[1], the Employer and the Employee must enter into the LC in writing prior to the first working date, the Employer must send the original or copies of the LC to the DOLISA which has issued a work permit to the said foreign Employee. If the Employer does not sign the LC in writing for a job with a term of over 3 months, the Employer may be subject to a fine up to VND25,000,000 for individuals and VND50,000,000 for organisations, depending on the number of Employees who the Employer has not signed the LCs with[2]. Please note that these employment relationships are still recognised by the Vietnamese labour law in case of disputes, despite the fact that the LC is entered into or not.
2. Case 2: The Employee does not have a work permits but do sign a LC with an Employer
As prescribed in the Labour Code[3], work permit is one of the preconditions for any foreign Employee to work in Vietnam. If the foreign Employee is not eligible to be granted a work permit, he or she needs to obtain a letter verifying that he or she is not the subject required to have a work permit, instead of being automatically exempt from work permit. If the foreign Employee works in Vietnam but does not have a work permit or letter verifying that he or she is not the subject required to have a work permit[4], the Employer and the Employee will be subject to the following administrative sanctions:
- Foreign Employee will be expelled; and
- The Employer hiring the said foreign Employee who does not have the work permit or letter verifying that foreign Employee is not the subject required to have the work permit will be subject to a fine of up to VND75,000,000 for an individual and VND150,000,000 for an organisation, depending on the number of Employees who do not have work permits or letters verifying that they are not the subjects required to have work permits.
The employment relationship, in this case, will not be recognised by local labour management authorities and competent courts in case of disputes through the Employer and the Employee who have signed LC in reality.
3. Case 3: The Foreign Employee neither has work permits nor sign a LC with the Employer
It is a violation of the provision of the Vietnamese labour law for any foreign Employee to work in Vietnam without a work permit and a LC. In this case, if the Employee is not eligible to be granted a work permit and does not have a letter verifying that he or she is not the subject required to have work permits, the Employer will be administratively sanctioned as analysed in the Case 1 and Case 2 above. Also, such an employment relationship will not be recognised by local labour management agencies and competent courts in case of disputes.
4. Case 4: The Foreign Employee’ work permit has expired but the LC has not. the foreign Employee has actually worked for and received salary from the Employer.
If work permit is expired, the Employers must conduct the procedure for renewing the work permit[5] at least 5 days prior to the expiry date but not over 45 days. If the Employer does not conduct the procedure for work permit renewal and continue employing the Employee whose work permit was expired, the Employer and the Employee will be subject to administrative sanctions. In detail, the Employer who employs the foreign Employee whose work permit was expired shall be subject to a fine up to VND75,000,000 for an individual and VND150,000,000 for an organisation, depending on the number of Employees whose work permits have expired.
The employment relationship, in this case, will not be recognised by local labour management authorities and competent courts in case of disputes.
5. Case 5: The Foreign Employee’ work permit has not expired but the LC has.
Expiration of LC is one of the cases of LC termination as prescribed by the labour laws[6]. Pursuant to Article 156.2 of the Labour Code, the termination of a LC will also automatically terminate the effect of the work permit.
On the other hand, the term of a work permit will be granted according to the LC term if the foreign Employees plans to work in Vietnam under the form of LC[7]. Accordingly, the term of work permit must match the LC term. It is contrary to the labour law if the term of these documents does not match each other. If there is a case where the foreign Employee’ work permit has not expired but his or her LC has expired, and the Employee actually works and receives salary from the Employer, the two parties must sign a new LC for the remaining time of the term as specified in the issued work permit.
Otherwise, the Employer may be subject to an administrative sanction as with the Case 1[8] where the Employer does not sign the LC with the Employee. The employment relationship during the time when the foreign Employee’ work permit is still valid, but the LC has expired will be recognised and protected by the law in case of dispute.
[1]Article 11.3 of Decree 152/2020/ND-CP of the Government dated 30 2020
[2]Articles 8.1 and Article 5.1 Decree 28/2020/ND-CP of the Government dated 01 March 2020
[3] Article 151.1 of the Labour Code
[4]Articles 3.1 and Article 31.4 Decree 28/2020/ND-CP of the Government dated 01/03/2020
[5]Articles 16.1 and 17 of Decree 152/2020/ND-CP of the Government dated 30 December 2020
[6]Article 34.1 of the Labour Code
[7]Article 10.1 of Decree 152/2020/ND-CP of the Government dated 30 December 2020
[8]Article 8.1 of Decree 28/2020/ND-CP of the Government dated 01 March 2020
