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Legal Update

New Decree Guiding The Labor Code on Employment

11 February 2014
Mayer Brown JSM Legal Update

The new Labour Code of Vietnam came into force on 1 May 2013. To provide guidelines on the provisions of the Labour Code on the employment and recruitment processes, the government issued Decree No. 03/2014/ND-CP (Decree 03) on 16 January 2014. Decree 03 applies to both local and foreign-invested enterprises (FIE), and will come into force as from 15 March 2014, replacing Decree No. 39/2013/ND-CP on the same subject.

Can FIEs recruit employees directly?

Under the new Labour Code and Decree 03, an FIE may recruit its employees directly or through a labour supply company or labour outsourcing company. In practice, most FIEs choose to recruit their employees directly.

What is the recruitment process?

The process for direct recruitment is as follows:

  1. The employer publicly announces the intended recruitment five working days in advance of receiving the application dossiers of the candidates. Normally, an announcement made on the employer’s website or at the place of work is sufficient. (Details concerning the public announcement are set forth under Decree 03.
  2. Candidates lodge their application dossiers. (The documents for such application dossiers are set forth under Decree 03.)
  3. The employer notifies the candidates of when the recruitment will take place.
  4. The employer makes the recruitment results public within five working days following the date of recruitment.
  5. The employer and the successful candidate enter into an employment contract.

Any recruitment expenses must be borne by the employer, and will be regarded as business or production expenses.

What are the reporting requirements?

An employer is required to report on its use of employees within 30 days from the date on which operations commence. During its operations the employer must prepare six-month and annual reports for the labour authority where its office is located.

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