1. Legal Consultancy on Labor Disputes Involving Foreign Elements in 2026
Labor disputes involving foreign elements are conflicts regarding rights, obligations, and interests arising between employees and employers, where at least one party is a foreign national or the basis for establishing the labor relationship occurred abroad but is executed in Vietnam.
In 2026, with stricter management of inter-provincial and foreign labor, disputes frequently center on the validity of Labor Contracts when Work Permits expire, or compensation claims arising from the unlawful unilateral termination of labor contracts.
2. Contractual Clauses to Mitigate Labor Disputes Involving Foreign Elements
To prevent legal risks, both employers and employees must pay special attention to specific clauses within the contract. Clear initial agreements are the “key” to minimizing labor disputes involving foreign elements:
- Specific Benefits and Allowances: The contract should detail allowances such as housing allowances, schooling fees for children, periodic home leave flights, and international health insurance.
- Training Costs and Reimbursement: Specific agreements on the reimbursement of training costs or expenses incurred for obtaining Work Permits and Temporary Residence Cards (TRC) if the employee voluntarily terminates the contract prematurely.
- Language and Governing Law: Under Vietnamese regulations, labor contracts must be prepared in Vietnamese or bilingually (Vietnamese – English). In the event of a dispute occurring within the territory of Vietnam, Vietnamese labor law shall be the prioritized governing law.
3. Jurisdiction of Vietnamese Courts in Resolving Labor Disputes Involving Foreign Elements
When conflicts cannot be reconciled, identifying the correct competent authority is the most crucial step in protecting the legal rights of the parties.
Jurisdiction by Territory and Subject Matter Pursuant to Articles 37 and 469 of the Civil Procedure Code 2015, the Provincial-level People’s Courts in Vietnam hold the jurisdiction to resolve, at the first-instance level, cases of labor disputes involving foreign elements in the following scenarios:
- The employee (foreign national) is physically working in Vietnam.
- The employer (enterprise) has its headquarters or a branch located in Vietnam.
- The case involves the unilateral termination of a labor contract or unlawful dismissal of high-level foreign personnel.
Procedures for Adjudication and Resolution Vietnamese Courts will evaluate the legality of disciplinary decisions or termination notices. If it is determined that the enterprise dismissed the employee unlawfully, the Court may compel the enterprise to reinstate the employee, pay wages for the days the employee was unable to work, and provide additional compensation of at least 02 months’ salary as per the contract.
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