Question: A foreign enterprise established under foreign law, with a registered office abroad and no commercial presence in Vietnam, enters into an employment contract with a Vietnamese employee. In this case, can Vietnamese law be applied, and how would it be enforced in the event of a dispute?
Answer:
1. Applicable law in case of dispute?
Based on the information provided, a foreign enterprise without a commercial presence in Vietnam enters into a labor contract with a Vietnamese employee working in Vietnam. In this case, both parties have the right to agree on the applicable law for the labor contract (Clause 1, Article 683 of the 2015 Civil Code)
However, if the law chosen by the parties in the labor contract affects the minimum rights of the employee under Vietnamese law, then Vietnamese law shall apply (Clause 5, Article 683 of the 2015 Civil Code).
Therefore, if the labor contract between the foreign enterprise and the Vietnamese employee contains provisions unfavorable to the employee, in the event of a dispute, the employee still has the right to request resolution under Vietnamese law, even if the contract has selected foreign law.
2. Which authority has jurisdiction to resolve labor disputes?
a. In case the parties have an agreement on the applicable law
If the labor contract includes an agreement on the applicable law, the dispute resolution authority shall be determined in accordance with the provisions of the law agreed upon by the parties.
b. In case there is no agreement on the applicable law
If the labor contract does not include an agreement on the applicable law, the law of the country most closely connected to the contract shall apply (Clause 1, Article 683 of the 2015 Civil Code).
In this case, although the contract is signed with a foreign enterprise, the employee works in Vietnam, so the dispute may be resolved under Vietnamese law.
According to Point d, Clause 1, Article 469 of the 2015 Civil Procedure Code, Vietnamese courts have jurisdiction over disputes when the work is performed within Vietnamese territory.
Therefore, if there is no agreement on the applicable law, Vietnamese law may be considered the most closely connected to the contract, and the dispute will be resolved by a Vietnamese court in accordance with the 2015 Civil Procedure Code.
