RESOLUTION OF LABOUR DISPUTES INVOLVING FOREIGN ELEMENTS ACCORDING TO VIETNAMESE LAWS

by Admin

18/01/2024

Documentation & Knowledge

RESOLUTION OF LABOUR DISPUTES INVOLVING FOREIGN ELEMENTS ACCORDING TO VIETNAMESE LAWS

During the employment process, conflicts and disagreements may arise between employers and employees, leading to disputes. In particular, in the current era of integration, labour disputes will become more complicated with the participation of foreign entities.

Within this article, Dai Ha Thanh Law Firm would like to provide information on regulations on resolving labour disputes involving foreign elements according to Vietnamese labour law.

I. Overview about labour disputes involving foreign elements

1. Labour relations involving foreign elements

Labour relations means social relations arising during the hiring, employment and wage payment  between employees, employers, organisations representing the parties and competent State agencies (Clause 5 Article 3 Labour Code 2019).

Civil relation involving foreign elements means any of the following civil relations:

a) There is at least one of the participating parties is a foreign natural person or juridical person;

b) The participating parties are Vietnamese natural persons or juridical persons but the establishment, amendment, implementation or termination of such relations arose in a foreign country;

c) The participating parties are Vietnamese natural persons or juridical persons but the objects of such civil relation are in a foreign country (Clause 2 Article 663 The Civil Code 2015)

Labour relations are one of the civil relations. Therefore, labour relations with foreign elements include:

Group 1: Foreign employees working in Vietnam for Vietnamese and foreign organisations and individuals.

Group 2: Vietnamese employees working for foreign organisations and individuals or international organisations in Vietnam.

Group 3: Vietnamese employees working abroad under contract.

2. Labour disputes involving foreign elements

Labour disputes mean disputes over rights, obligations or interests arising between the parties during the process of establishing, implementing or terminating labour relations, disputes between employees’ representative organisations, or disputes arising from relations directly related to labour relations (Clause 1 Article 179 Labour Code 2019)

Therefore, labour disputes involving foreign elements mean a conflict in rights, obligations and interests that arises between parties in a labour relations in which at least one party is a foreigner.

Labour disputes include:

Firstly, individual labour disputes between an employee and an employer, between an employee and an enterprise or organisation exports labour to foreign countries pursuant to contracts, or between outsourced employees and the sub-licensing employers (Point a Clause 1 Article 179 Labour Code 2019)

Secondly, collective labour disputes relevant to rights or interests between one or more employees’ representative organisations and employers; or one or more employers’ organisations (Point b Clause 1 Article 179 Labour Code 2019). This disputes that arise in the following cases:

(i) Right-based collective labour disputes mean disputes between one or more employees’ representative organisations and an employer or one or more employers’ organisations that arise in differences in the understanding and implementation of the regulations pursuant to labour law, collective labour agreements, internal regulations or other lawful regulations and agreements or when employers discriminate against employees or members of the committee of a employees’ representative organisations due to the establishment, joining or implementation of the employees’ representative organisation, intervene in or manipulate a employees’ representative organisation, or fail to comply with the obligation to negotiate in good faith (Clause 2 Article 179 Labour Code 2019).

(ii) Interest-based collective labour disputes include disputes that arise during collective bargaining processes or when either party rejects collective bargaining or does not implement bargaining within the limitation period stipulated by the law (Clause 3 Article 179 Labour Code 2019)

II. Resolution of labour disputes involving foreign elements

1. Methods of resolving labour disputes

 

Methods

Negotiation

Mediation

Arbitration

Court

Definition

Negotiation is a dispute resolution method in which parties meet directly to resolve conflicts and disagreements without the participation of a third party. This is the first, basic and most popular method when resolving labour disputes.

Mediation is a method of resolving disputes that involves a third party. The third party plays a neutral role, helping the parties in resolving the dispute. Mediation is also a procedure in resolving labour disputes before being resolved at the Labor Arbitration Council and Court.

Arbitration is a method of resolving disputes with the participation of a third party. The third party will make a decision on the case for the disputing parties. When there is a request to resolve a dispute, the Labor Arbitration Council decides to establish a Labor Arbitration Panel consisting of 03 Arbitrators, in which representatives of each disputing party choose 01 arbitrator, these 02 Arbitrators agree. 01 Another labour arbitrator is the head of the Arbitration Committee.

Resolving labour disputes in court is a method of resolution conducted by the court, as a judicial agency with State power, in an orderly manner. The proceedings are strict and the judgement is enforced by state coercion.

Advantages

1. Save time and costs;

2. Ensure the disputing parties' right to self-determination.

3. Keep information confidential.


 

1. Save time and costs;

2. The will of the parties is respected because the third party has no right to impose their will.

1. Save time;

2.Confidentiality of information for parties due to the principle of non-public trials.

3. Each disputing party is free to choose 01 Arbitrator, not on behalf of State power, very suitable to resolve disputes with foreign elements.

1. Guaranteed implementation by State coercive measures

2. More cost-effective than arbitration.

Disadvantages

1. Due to differences in nationality, culture or customs, it is difficult for parties to negotiate and agree with each other to achieve common goals.

2. Negotiations also do not have a mechanism to ensure enforcement, so there will be huge risks if one of the parties does not voluntarily comply.

1. Due to respect for the will of the parties, conciliation is unlikely to be successful if one party advances its interests.

1. The cost is more expensive than other methods.

2. When choosing the method of the Labor Arbitration Council, the parties cannot simultaneously choose the Court to resolve the matter.

3. The decision of the Labor Arbitration Council is final and cannot be appealed or requested for a retrial.

4. Execution of judgement also depends on the willingness of the parties.

1. Takes the most time out of all four methods and costs a lot to follow the case.

2. Information confidentiality cannot be guaranteed for the parties due to the principle of public trial.

Thus, for labour disputes involving foreign elements, the most optimal method of resolution is Arbitration. Because if the results of the negotiation and mediation depend on the will of the parties, the Court acts on the behalf of State authority to handle disputes. The Arbitration method is flexible according to the will and requirements of the parties, has the right to make a final decision on the case, requires the parties to comply with the judgement, and does not act on behalf of any State authority, which is consistent with the foreign element of the dispute.

2. Order and procedures for resolving labour disputes

a. Resolving individual labour disputes

AUTHORITY

(Article 187 Labour Code 2019)

1. ​The labour mediator.

2. ​The Labour Arbitration Council.

3. ​The People’s Court.

ORDERS AND PROCEDURES

Step 1: Mediation at the labour mediator 

Order of mediation

(Article 188 Labour Code 2019 )

The disputing parties can submit a request to a labour mediator or to a specialised labour agency under the People's Committee.

- Processing time: Within 05 working days from the date of receiving a request to resolve the dispute, the labour mediator must complete the mediation process. 

- Results:

i. Case 1: Successful mediation

  • the parties reach an agreement;
  • the parties fail to reach an agreement, the labour mediator shall suggest a mediation option for the parties to consider. In cases that the parties accept the mediation option, the mediation is successful.

ii. Case 2: Unsuccessful mediation

  • The option suggested by the mediator is not accepted;
  • Either party, upon being duly summoned for the second time, has failed to appear without suitable reasons

- Note: The record of successful mediation must be signed by the disputing parties and the labour mediator. 

The record of unsuccessful mediation must be signed by the parties that are present and the labour mediator.

Copies of the record of successful or unsuccessful mediation must be sent to the disputing parties within 01 working day from the date of recording in minute.

Labour disputes for which mediation is not mandatory

(Clause 1 Article 188 Labour Code 2019)

(1) Disputes over discipline in the form of dismissal or disputes over unilateral termination of an employment contract.

(2) Disputes over compensation for damages or allowances upon terminating an employment contract.

(3) Disputes between a domestic servant and employer.

(4) Disputes over social insurance, health insurance, unemployment insurance, or occupational accident and disease insurance.

(5) Disputes over compensation for damages between an employee and the enterprise or organisation exporting labour to work overseas under contract.

(6) Disputes between outsourced employees and the sub-licensing employers.

Step 2: Resolve at the Labor Arbitration Council or Court

Basis for resolution

(Clause 7 Article 188 Labour Code 2019)

​In cases that mediation is not mandatory or the labour mediator fails to conduct the mediation within the limitation period or in cases that mediation is unsuccessful, the disputing parties may choose to request the Labour Arbitration Council or the Court for resolution.

The Labour Arbitration Council

(Article 189 Labour Code 2019)

Depending on consensus, the disputing parties may request the Labour Arbitration Council to resolve disputes.

- Limitation period to establish the Arbitration Panel:​Within 07 working days from the date of receiving the request for dispute resolution, a Labour Arbitration Panel shall be established for dispute resolution.

- Processing time: Within 30 days from the date of establishing the Labour Arbitration Panel, the Panel shall issue a decision on the dispute and send it to the disputing parties.

- Notes: When requesting the Labour Arbitration Council to resolve a dispute, the disputing parties are not permitted to request for dispute resolution by the Court at the same time. 

Except ​cases that the Labour Arbitration Panel is not established within the limitation period or the Labour Arbitration Panel fails to issue a decision on dispute resolution within the limitation period or either party fails to execute the decision issued by the Labour Arbitration Panel, the parties have the right to request the Court for resolution.

Court

Dispute resolution in court must comply with the regulations on order and procedures specified in the Civil Procedure Code 2015.

STATUTORY LIMITATIONS

(Article 190 Labour Code 2019)

​The limitation period to request from the date that the disputing party detects the action deemed to infringe their lawful rights and interests is:

  • Labour mediator: 06 months
  • The Labour Arbitration Council: 09 months
  • The Court: 01 year

b. Resolving collective labour disputes

Firstly, regarding right-based collective labour disputes.

AUTHORITY

(Article 191 Labour Code 2019)

1. The labour mediator.

2. The Labour Arbitration Council.

3. The People’s Court.

ORDER AND PROCEDURES

Step 1: Mediation at the labour mediator 

Order of mediation

(Clause 1 Article 192 Labour Code 2019)

The disputing parties may submit a request to a labour mediator or to a specialised labour agency under the People's Committee.

- Processing time: Within 05 working days from the date of receiving a request to resolve the dispute, the labour mediator must complete the mediation process. 

- Results:

i. Case 1: Successful mediation

  • the parties reach an agreement
  • the parties fail to reach an agreement, the labour mediator shall suggest a mediation option for the parties to consider. In cases where this option is accepted by the parties then mediate successfully.

ii. Case 2: Unsuccessful mediation

  • The option suggested by the mediator is not accepted
  • Either party, upon being duly summoned for the second time, has failed to appear without just reasons

- Note: For disputes arise due to the differences in the understanding and implementation of labour law or when employers discriminate, intervene an employee’ representative organisation, or fail to comply with the obligation to negotiate in good faith (point b, c Clause 2 Article 179 Labour Code 2019), the labour mediator shall record a minute and forwards dossier to the competent authority for consideration and handling pursuant to the law.

The record of successful mediation must be signed by the disputing parties and the labour mediator. The record of unsuccessful mediation must be signed by the parties that are present and the labour mediator.

Copies of the record of successful or unsuccessful mediation must be sent to the disputing parties within 01 working day from the date of recording in minute.

Step 2: Resolve at the Labor Arbitration Council or Court

Basis for resolution

(Clause 2 Article 192 Labour Code 2019)

​In cases that mediation is not mandatory or the labour mediator fails to conduct the mediation within the limitation period or in cases that mediation is unsuccessful, the disputing parties may choose to request the Labour Arbitration Council or the Court for resolution.

The Labour Arbitration Council.

(Article 193 Labour Code 2019)

Upon consensus, the disputing parties have the right to request dispute resolution by the Labour Arbitration Council

- Limitation period to establish the Arbitration Panel: Within 07 working days from the date of receiving the request for dispute resolution, a Labour Arbitration Panel shall be established for the purpose of dispute resolution.

- Processing time: Within 30 days from the date of establishment, the Labour Arbitration Panel must, based on the provisions of labour law, relevant collective bargaining agreements, registered internal work regulations, and other lawful regulations and agreements, issue a decision on the dispute resolution and send it to the disputing parties.

- Note: In cases where the parties choose to have their disputes resolved by the Labour Arbitration Council, the parties are not allowed to simultaneously request resolution by the Court. 

Except in cases where the Labour Arbitration Panel is not established within the limitation period or where the Labour Arbitration Panel fails to deliver a decision to resolve the dispute within the limitation period or where either party fails to execute the decision issued by the Labour Arbitration Panel, the disputing parties may request resolution by the Court.

Court

Dispute resolution in Court must comply with the regulations on order and procedures specified in the Civil Procedure Code 2015.

STATUTORY LIMITATIONS

(Article 194 Labour Code 2019)

​The limitation period to request from the date that the disputing party detects the action deemed to infringe their lawful rights is:

  • Labour mediator: 06 months
  • The Labour Arbitration Council: 09 months
  • The court: 01 year

Secondly, regarding interest-based collective labour disputes

AUTHORITY

(Article 195 Labour Code 2019)

1. The labour mediator.

2. The Labour Arbitration Council.

ORDER AND PROCEDURES

Step 1: Mediation at the labour mediator 

Order of mediation

(Clause 1 Article 196 Labour Code 2019)

The disputing parties can submit a request to a labour mediator or to a specialised labour agency under the People's Committee.

- Processing time: Within 05 working days from the date of receiving a request to resolve the dispute from the parties, the labour mediator must complete the mediation process. 

- Results:

i. Case 1: Successful mediation

  • The parties reach an agreement
  • The parties fail to reach an agreement, the labour mediator shall suggest a mediation option for the parties to consider. In cases where this option is accepted by the parties then mediate successfully.

ii. Case 2: Unsuccessful mediation

  • The option suggested by the mediator is not accepted
  • Either party, upon being duly summoned for the second time, has failed to appear without just reasons

- Note: In cases that mediation is successful, a record of successful mediation must contain all contents agreed by the parties, signed by the parties and the labour mediator. The record of successful mediation shall be considered to have the same validity as a collective bargaining agreement of the enterprise.

In cases that mediation is unsuccessful, the record of unsuccessful mediation must be signed by the disputing party that is present and the labour mediator.

Copies of the record of successful or unsuccessful mediation must be sent to the disputing parties within 01 working day from the date that the record is produced.

Step 2: Resolve at the Labor Arbitration Council

Basis for resolution

(Clause 3 Article 196 Labour Code 2019)

​In cases that mediation is unsuccessful or the labour mediator fails to conduct the mediation within the limitation period or either party fails to execute the agreement stated in the record of successful mediation, the disputing parties may request the Labour Arbitration Council for resolution. 

The Labour Arbitration Council.

(Article 197 Labour Code 2019)

Upon consensus, the disputing parties have the right to request dispute resolution by the Labour Arbitration Council

- Limitation period to establish the Arbitration Panel: Within 07 working days from the date of receiving the request for dispute resolution, a Labour Arbitration Panel must be established for dispute resolution.

- Processing time: Within 30 days from the date of establishment, pursuant to labour law, collective labour agreement, internal regulation which is registered and other lawful agreements, the Labour Arbitration Panel must issue a decision on dispute resolution and send it to the disputing parties.

- Note: If the parties choose to have their dispute resolved by the Labour Arbitration Council in accordance with this Article, the employees’ representative organisation shall not conduct a strike during the arbitration process.

Where the Labour Arbitration Panel is not established within the limitation period or where the Arbitration Panel fails to deliver a decision to resolve the dispute within the limitation period or the employer, as a disputing party, fails to execute the decision issued by the Labour Arbitration Panel, the employees’ representative organisation as a disputing party may initiate the procedures for strike action.

Above is the entire general research of Dai Ha Thanh Law Firm on resolving labour disputes with foreign elements. If you have any questions or issues that need advice, please contact us to receive professional legal advice services.