Setting Up Shop in Vietnam

By Orzechowski, Robert; Berret, Beth | Workforce, May 1998 | Go to article overview

Setting Up Shop in Vietnam

Orzechowski, Robert, Berret, Beth, Workforce

Two scholars discuss the Labour Code in one of tomorrow's hottest markets.

The Pacific Rim has long been viewed as an area with significant opportunities for economic development. With the lifting of the U.S. embargo of Vietnam in 1994 and, more recently, the normalization of relations and Vietnam's acceptance into ASEAN [Association of South East Asian Nations], U.S.-based businesses can now explore more freely the same opportunities in Vietnam that most other developed nations have enjoyed for the past 10 years. The result: Vietnam is now viewed by many American companies as a hot market.

As U.S. companies begin to conduct business in Vietnam, they will employ Vietnamese citizens. If your company is considering this option, it's important for you to understand the basic provisions of the 1994 Labour Code of the Socialist Republic of Vietnam.

The Labour Code includes many of the provisions of the United States' Fair Labor Standards Act, Americans With Disabilities Act, Occupational Safety and Health Administration and Equal Employment Opportunity laws. The Labour Code institutionalizes the doi moi (renovation) policy established in 1986 by the Vietnamese Communist party to address the economic problems of inflation, shortage of goods and lack of foreign investments. The code also protects the rights of workers and employers. A manifest purpose of the Labour Code "is to make Vietnam a wealthy and strong country, and its society fair and civilized." Short descriptions of several pertinent sections of the code follow.

Discrimination. The code prohibits discrimination on the basis of gender, race and religion. The code specifically establishes preferential treatment for women and other workers traditionally considered protected groups. For example, employers must provide special facilities, paid rest periods, leave and child-care assistance for female employees. Incentives are provided for employing or otherwise preferentially treating such protected groups.

Recruiting. Vietnamese workers can be recruited through various sources. Employment agencies are either government owned (as the U.S. Bureau of Employment Security) or private enterprises. Employers use help-wanted advertising and search for university students through schools' placement offices.

Employers generally are allowed to select employees on the basis of merit and good business sense. As in the United States, there are laws prohibiting discrimination based on protected status. When employers can't locate suitable talent and must therefore hire foreign labor (expatriates or thirdcountry nationals), employers are expected to establish training programs for Vietnamese employees who would eventually assume such positions. This practice mainly applies to technical, specialized or managerial positions. Foreign workers must obtain a work permit issued by the Ministry of Labour and are entitled to all rights and benefits and subject to all provisions of the Labour Code. Final selection decisions are made by the plant or company manager, with the HR manager having significant input into the decision.

Employment contracts. Employers must plan to enter into contractual relationships with employees individually or as a collective labor group via agreement. Individual contracts may be signed as indefinite contracts, definite contracts (one to three years) or labor contracts (less than one year). The written contract is a combination of what might equate in the States to the job description and a policy manual designed to promote the safety and security of the Vietnamese worker.

In addition to the nature of work, duration of contract, salary, benefits and issues of safety, the contract specifies a probationary period. During this trial period, not to exceed 60 days in specialized/technical fields (30 days otherwise), employees are paid at least 70 percent of their normal job rate. (To advance from the training rate, employees usually have to pass written and performance tests. …

The rest of this article is only available to active members of Questia

Sign up now for a free, 1-day trial and receive full access to:

  • Questia's entire collection
  • Automatic bibliography creation
  • More helpful research tools like notes, citations, and highlights
  • Ad-free environment

Already a member? Log in now.

Notes for this article

Add a new note
If you are trying to select text to create highlights or citations, remember that you must now click or tap on the first word, and then click or tap on the last word.
One moment ...
Default project is now your active project.
Project items

Items saved from this article

This article has been saved
Highlights (0)
Some of your highlights are legacy items.

Highlights saved before July 30, 2012 will not be displayed on their respective source pages.

You can easily re-create the highlights by opening the book page or article, selecting the text, and clicking “Highlight.”

Citations (0)
Some of your citations are legacy items.

Any citation created before July 30, 2012 will labeled as a “Cited page.” New citations will be saved as cited passages, pages or articles.

We also added the ability to view new citations from your projects or the book or article where you created them.

Notes (0)
Bookmarks (0)

You have no saved items from this article

Project items include:
  • Saved book/article
  • Highlights
  • Quotes/citations
  • Notes
  • Bookmarks
Cite this article

Cited article

Citations are available only to our active members.
Sign up now to cite pages or passages in MLA, APA and Chicago citation styles.

(Einhorn, 1992, p. 25)

(Einhorn 25)


1. Lois J. Einhorn, Abraham Lincoln, the Orator: Penetrating the Lincoln Legend (Westport, CT: Greenwood Press, 1992), 25,

Cited article

Setting Up Shop in Vietnam


Text size Smaller Larger Reset View mode
Search within

Search within this article

Look up

Look up a word

  • Dictionary
  • Thesaurus
Please submit a word or phrase above.
Print this page

Print this page

Why can't I print more than one page at a time?

Full screen

matching results for page

Cited passage

Citations are available only to our active members.
Sign up now to cite pages or passages in MLA, APA and Chicago citation styles.

"Portraying himself as an honest, ordinary person helped Lincoln identify with his audiences." (Einhorn, 1992, p. 25).

"Portraying himself as an honest, ordinary person helped Lincoln identify with his audiences." (Einhorn 25)

"Portraying himself as an honest, ordinary person helped Lincoln identify with his audiences."1

1. Lois J. Einhorn, Abraham Lincoln, the Orator: Penetrating the Lincoln Legend (Westport, CT: Greenwood Press, 1992), 25,

Cited passage

Welcome to the new Questia Reader

The Questia Reader has been updated to provide you with an even better online reading experience.  It is now 100% Responsive, which means you can read our books and articles on any sized device you wish.  All of your favorite tools like notes, highlights, and citations are still here, but the way you select text has been updated to be easier to use, especially on touchscreen devices.  Here's how:

1. Click or tap the first word you want to select.
2. Click or tap the last word you want to select.

OK, got it!

Thanks for trying Questia!

Please continue trying out our research tools, but please note, full functionality is available only to our active members.

Your work will be lost once you leave this Web page.

For full access in an ad-free environment, sign up now for a FREE, 1-day trial.

Already a member? Log in now.