comments on draft decree regulating in details foreign employees in ...

EUROCHAM HR & TRAINING SECTOR COMMITTEECOMMENTS ON DRAFT DECREE REGULATING IN DETAILSFOREIGN EMPLOYEES IN VIETNAM1. Article 3 on WTO commitments and 11 sectorsOver seven years from the WTO Commitments and the introduction of exemption of work permitapplicable under the 11 service sectors, EuroCham was unable to find one member who hadsuccessfully been exempted of work permit under this clause, due to there being no clarification of whatneeds to be provided.We would like to suggest that the MOLISA leads the way and provides the MOIT details on this as partof the Decree.EuroCham recommends the following be adopted by MOLISA and MOIT for exemption:(i) Investment certificate of the company receiving the transferee (demonstrating that the companyreceiving the transferee is involved in one of the above mentioned sectors);(ii) Proof of relationship between the foreign enterprise (having previously employed the transferee) andthe company receiving the transferee (e.g. Investment Certificate, share certificate, certificate ofcontribution…);(iii) Proof of employment of the Transferee with the foreign enterprises (having previously employed thetransferee) for at least a year (e.g. labour contract).Once the MOIT issues the confirmation letter mentioning that the international assignee is exempted ofWork Permit, the “registration” required at the labour department as “exempted of Work Permit” shouldbe simple (form No. 11 only).Currently the work permit exemption form No.11 requires supporting documents which are similar to thedocuments required for a Work Permit application. Such exemption should also be communicated tothe Immigration Department in charge of issuing Temporary Residence Card for foreign employees anddependent living in Vietnam.2. Article 5 on Demand for using Foreign WorkersCompanies should not be required to seek approval from the DOLISA and subsequently the PeopleCommittee for hiring of Foreign Nationals as this is already proven by waiting 30 days and the time ofadvertisement period. We suggest that it is re-worded in terms of DOLISA should report the numberof work permits requests and occupation requests, and remove the other statements.3. Article 8 on Sequence of Work Permit IssueA reason for the fact that a higher number of Foreign Nationals are employed in Vietnam is a result ofa lack of qualified applicants in the market, which is not only because of the Vietnamese educationsystem but also related to the lack of applicants with international and business experience. Thisbusiness and international experience is not only obtained through work but exposure to different(international) environments and situations as well. For many Specialist, Managers and Executivesthis is through many years of experience gained working in different cultures and customs.

Vietnam is looking to attract more foreign investment in IT, telecommunication, healthcare, financialservices and education industries over the next 5-10 years. At present, there is a disparity, as many ofthe qualifications & skills required are not taught or available in Vietnam, resulting in many companiesbeing unable to localize these roles over the course of the next 5-10 years, due to the specializationof the industry. Vietnam needs to attract these specialists to work in Vietnam and transfer their skillsto the next generation. Foreign Nationals working in Vietnam remain an important and integral part ofthe future of Vietnam, where the educational system is not yet in place to deliver the specialized andbusiness workforce required.We suggest that the apprenticeship contract should be enforced on the third signing of the labourcontract instead of second signing to properly allow for the apprenticeship to learn the role. Two yearsis far too quick to learn the skills needed for specialized and technical roles. EuroCham believes thisclause will deter companies entering into Vietnam as they need longer to promote employees and thecost involved in hiring a foreigner to transfer knowledge will not be off set. Under Decree 46, the needfor companies to name the Vietnamese individual under an apprenticeship contract on renewal of aForeign National’s work permit is a major concern for EuroCham members. As we already indicated,Vietnam has high attrition rate due to the issue of employees leaving companies and working for thecompetitor for a higher wage. It is very hard to stipulate a named person for the part of the processand also the skills and expertise for the role maybe need more than three-year apprenticeship. Itmight be that the apprentice is not developing according to expectations and there might be otherVietnamese nationals working in the company that fit better for this job. It is too heavy a burden offcommitment for companies and sets an unrealistic expectation and timeframe for both employee andemployer. Also it is not possible for non-governmental organisations to have an apprenticeshipcontract but should have training programs in place to up skills the workforce.4. Article 10 on Application for Work PermitAlthough Vietnam has a similar process in regards to Work Permit with many of its regionalcounterparts, the administration process in Vietnam is burdensome and lacks consistency across thevarious provinces.Advertisement processFirstly, the requirement to advertise the position for 30 days in local and national press is not reflectiveof the media environment in Vietnam. Internet is playing a larger role in Vietnam with over 60%penetration in HCMC and Hanoi, meaning traditional press is no longer the only means ofadvertisement. Most companies advertise on the internet and job boards rather than traditional print.When companies have to advertise the role, which requires a specialized skills or extensiveexperience, it delays the on boarding and also is not efficient for business. This is especially relevantif the job requires a skills set. Companies should not discriminate against in the advertisement/selection process and have the freedom to appoint the best person for the role based on set criteriarather than nationality.Once the company has advertised the role, they have to obtain necessary documents and submitwork permit application. This decision may take up to 60 days in some instances. At this time theForeign Nationals cannot legally work in Vietnam. This can cause major business issues forcompanies, not enabling them to have managers in place and efficiently run the business.Vocational Training / Letter of CertificateOne of the issues faced is many types of vocational qualifications, certificates. Letters of Association,trade certificates etc. are not accepted by MOLISA in the work permit process, although they are legal

qualifications. These are legal in the home country but will not be accepted by some of theVietnamese Departments dealing with the work permit process. This is an issue when the ForeignNational has a vocational qualification and not a degree.The Certificate of Experience which can also be submitted does not allow for the changing nature andworld of work. At present, it must be five years in one role and does not reflect that many ForeignNationals may have 2 consecutive jobs within this period, the same as Vietnamese Nationals. Also itdoes not take into account work experience in Vietnam. The issue is that many companies do notkeep personnel records for an extended period of time, so trying to source these documents overseasif very burdensome.LegalizationAnother main issue for EuroCham members is the length of time that it requires for legalization,notarization and certification of documents within the home country. The time it takes to producethese documents overseas can be a long period of time; many home countries do not haveVietnamese embassies present. This causes issues as the need for current validity within 3 monthsperiod.This is both a costly and time consuming process which then may or may not be accepted by theDOLISA, depending on the provinces you submitted to. This process and then the issuance processcan take up to 6 months, and during this time the Foreign National is still unable to commerce work.A conditional work permit would be a workable alternative with burden on the employer to take carethat everything will be arranged for some specific positions (highly skilled, specialists) or for somepositions (other) ones that will allow them to work once the request has been submitted.5. Conclusion and recommendations:EuroCham believes in principle that localisation of roles is an important part for the development ofVietnam from an emerging market to a developed nation. With this in mind, EuroCham would like tomake the following recommendations:Advertisements- The need for advertisements should not apply to positions that are already exempt from theneed of a work permit under the WTO commitment and one advertisement in the mediumselected by the employers should be sufficient for all other advertisements.- Employers should be allowed to select the right candidate based on their own discretion andinternal processes, and not discriminate against any nationality.Apprenticeship contract- The requirement for an apprenticeship contract to be signed with a named individual for anextension of a work permit should be removed. Thus allowing the right person to get theposition based on expertise and business needs, companies should be required to ensurethey have a training program to train Vietnamese staff in place and can verify the training hastaken place to the authoritiesConditional Work Permit for 6 months- The introduction of an official receipt which would be issued that would allow foreignemployees to commence work immediately. This “conditional” work permits for Specialists,Managers and executives would allow them to commence employment whilst obtaining thenecessary documents required overseas. These conditional work permits should be grantedfor a period up to six months. During this time the Employer is responsible to ensure theperson has the qualifications etc to perform the role and takes responsibility for their actions.

- Clearer definitions and stream line clarification for vocational based training certificate /diplomas that are not recognised by DOLISA. Clearer guidelines on the process oflegalisation, notarisation and certification of documents as many countries have differentprocess which are not complimentary to the requirements of Vietnam and its departments- Acceptance of the Employers’ verification of the qualifications and letters of experience for theemployee. This is will sufficient to obtain a work permit instead of obtaining from the homecountry.Work Permit Exemption- Currently, categories of foreigner exempted of Work Permit are still required to complete andlodge Form No.11 for Work Permit exemption to related DOLISA and provide supportingdocuments such as University degree or Work Testimonial among many others. Thesesupporting documents are the same as for a full set of application for Work Permit.- An International assignee who receives confirmation from MOIT that he should be exemptedof Work Permit should only need to complete form No.11 for Work Permit exemption at theDOLISA and the same should be applicable for other exempted categories. None or verylimited supporting documents should be required.

EuroCham HR & Training Sector Committee completed the following survey with its members.This is a representative of various industries with EuroCham:

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