VietNamNet Bridge - Several foreign business chambers and associations in Vietnam have just sent a joint petition to the Prime Minister seeking reversal of new rules on foreign labor in Vietnam that will take effect next week.

The foreign business community said that provisions in Decree No.46/2011/ND-CP on recruitment and management of foreign employees in Vietnam that becomes effective on August 1 would adversely affect their business activity, and that they had not been consulted with during the process of the decree being prepared.

The petition was sent to the Prime Minister, relevant agencies and diplomats on July 22, and was signed by several foreign business groups. They include the Canadian Chamber of Commerce, the Nordic Chamber of Commerce, the Swiss Business Association, the French Chamber of Commerce, and the German Business Association.

According to a statement issued by the German Business Association, the new decree was issued on June 17, 2011 to replace Decree 34, but the new legislation imposes more stringent requirements and red tape on foreign enterprises when it comes to recruiting foreign employees, especially those in senior managerial posts.

Decree 46 also violates the current Labor Code of Vietnam, and several international commitments, such as the WTO Agreements and the Bilateral Trade Agreements Vietnam had signed with international organizations, according to the petition.

According to the petition, the new regulation imposes irrational conditions for recruitment and work permit extension of foreigners working in Vietnam, including foreign managers, executives, and specialists.

For example, Article 1.3 of the new decree requires employers to publicly announce their recruitment needs to Vietnamese on the positions 30 days prior to recruiting foreigners for such positions. The publication is required to be made in at least one national and one regional newspaper.

Moreover, according to Article 1.9, companies must present evidence of such recruitment announcements when applying for work permits for foreign employees.

Such rules apply to all positions, including top executives and technical experts, prolonging recruitment processes of the companies, said the petition.

It is also said to violate Vietnam’s guarantee for rights of U.S. companies to select top managing personnel as committed under the U.S.-Vietnam Bilateral Trade Agreement (BTA).

The decree also goes against Vietnam’s Law of Enterprises that allows foreign-invested companies to have their appointment and employment of general directors or executives decided by the parent companies.

Besides, in order to extend work permits for foreign employees, companies have to submit copies of apprenticeship contracts with Vietnamese employees expected to replace the foreigners, according to Article 1.13 of the new decree.

Source: SGT