The concepts of employees, employment contracts, and a worker without an employment relationship under Vietnamese labour law

The Labour Code 2019 has significantly expanded its scope of application by expanding the definition of employees (người lao động), employment contracts (hợp đồng lao động) and introducing a new concept of workers without an employment relationship (người làm việc không có quan hệ lao động). The changes could have significant impacts on many individuals including gig workers.

Employees

Under the Labour Code 2019, an employee means a person working for an employer pursuant to an agreement, who is paid wages, and who is subject to management, instruction, and supervision by the employer. On the other hand, the Labour Code 2012 defines an employee to mean a person working under an “employment contract”. Accordingly, under the Labour Code 2012, an individual working for a company under a contract which is not named “employment contract” could argue that he/she is not an employee of the company. However, such an argument may not work under the Labour Code 2019 if it can be established that there is an agreement between the company and the individual and such individual is managed, instructed and supervised by the company.

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Written by Nguyen Quang Vu On In

Regulations Governing Debt Sale And Purchase Business Activity

1. Currently, the debt sale and purchase activity of entities not being credit institutions is no longer a conditional business activity. Specifically, the Law on Investment of the National Assembly dated 17 June 2020 (Investment Law 2020) has removed the business line of “debt sale and purchase” from the list of industries and trades in which business investment is conditional. Under the explanation of the drafting committee of the Investment Law 2020, the subject of a debt sale and purchase transaction can be any business entity, the debt sale and purchase service is only a supporting service which helps to promote the debt sale and purchase transactions, and the current system of the civil and commercial law relating to the sale and purchase activities have sufficient regulations to govern the debt sale and purchase transactions as well as the transactions supporting the debt sale and purchase

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Written by Lawyers VNLaw On In

No clear exemption from obtaining Investment Registration Certificate in case of acquisition of a Vietnamese company under Decree 31/2021

A change in Decree 31/2021 implementing the Investment Law 2020 has raised confusion as to the need to obtain an Investment Registration Certificate (IRC) or investment policy approval (IPA) for the existing investment project(s) after a foreign investor acquires control of an existing Vietnamese company (the Target Company).

Previously, Article 46.4 of Decree 118/2015 implements the Investment Law 2014 specifically exempts the Target Company from obtaining a new IRC or IPA or amending existing IRC or IPA for the investment project(s) of said Target Company which has already been under implementation before being acquired by a foreign investor.

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Written by Nguyen Quang Vu On In ,

New Decree On Security Interest In Vietnam

On 19 March 2021, the Government has issued Decree 21 guiding the Civil Code on obligation performance security (Decree 21/2021). Decree 21/2021 replaces Decree 163 of the Government dated 29 December 2006 on security transactions (Decree 163/2006) from 15 May 2021.

Parties’ autonomy

Decree 21/2021 appears to allow the parties to a security transaction to agree on any issue relating to a security transaction as long as such agreement complies with the fundamental principles of the Civil Code 2015, does not violate the conditions for a transaction to take effect, and does not violate the limitation on the exercise of civil right under the Civil Code 2015 and other relevant law.

It is not clear if the parties can agree not to follow the provisions of Decree 21/2021 as long as such agreements comply with these mentioned conditions. For example, Article 9.1 of Decree 21/2021 regulates that the description of the security assets is agreed by the secured party and the securing party, but it is also followed by the requirement that such description must be in accordance with several other provisions of Decree 21/2021. It is not clear if the parties can apply Article 4 to describe the security assets in a manner different from the provisions of Decree 21/2021, or, even if the parties have the right to agree on the description of the security assets, such description must follow Article 9.1 of Decree 21/2021.

Concept of obligor and obligee

Decree 21/2021 defines that the obligor (“người có nghĩa vụ được bảo đảm” in Vietnamese) is a person whose obligation is secured by security measure. It is also clearly stated that the obligor may or may not concurrently be the securing party (“bên bảo đảm” in Vietnamese).

Interestingly, Decree 21/2021 removes the express description in Decree 163/2006 that the obligee is the secured party in a secured obligation. It is not clear if this change provides for the possibility that the secured party needs not to be the obligee in a secured transaction (see more discussion here).

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Written by Nguyen Quang Vu On In