UNIT 12 CONTRACTS: POWER OF ATTORNEY, EMPLOYMENT & PROPERTY

UNIT 12CONTRACTS: POWER OF ATTORNEY, EMPLOYMENT & PROPERTY

12.1 Power of Attorney

Words & Expressions:
    Be sure you know all these words and expressions. Click to learn how each word or expression is pronounced:

agent [n]	: người được uỷ nhiệm
attorney [n]	: người được uỷ quyền
power of attorney	: quyền uỷ nhiệm
grant (s.b s.t) [v]	: cho phép, ban cho, cấp cho
grantor [n]	: người uỷ nhiệm
impose (s.t on/upon s.b) [v]	: áp đặt
lease [v, n]	: cho thuê, hợp đồng cho thuê

     If you work for a foreign company, or have a close business association with a foreign company, such as representation in Vietnam, you may be required to act on their behalf in certain commercial matters. This can be done by completing a power of attorney, which is a form of a contract between the person or organisation giving the authority, the grantoror the principal, and the person or organisation accepting the authority, the attorney-in-fact or the agent. (Do note that there is a considerable difference between an attorney-in-fact and an attorney-at-law; any competent adult can be appointed as an attorney-in-fact, whereas an attorney-at-law is a legally qualified person.)

     Although a power of attorney is usually a relatively simple document, it does give another person authority to act on behalf of the grantor, and to sign documents, in exactly the same way as if the grantor was doing him or herself. It is used in situations where someone will not be available or is unable to undertake their own affairs and wants someone else to do it for them. A power of attorney can be defined as:

A legal instrument which grants another person the authority to act as your legal representative, and to make binding legal and financial decisions on your behalf.

     Granting someone power of attorney takes nothing away from the grantor’s right to deal with his or her own affairs. It simply gives similar rights to another person. It is important to remember, however, that an attorney-in-fact can legally bind the grantor by his or her actions

     A power of attorney is useful in a number of situations, but in this unit we will look at the two most common types used in business: general power of attorney and specific power of attorney.

12.1.1 General Power of Attorney 

     A general power of attorney is very broad, and provides extensive authority to the person or organization appoint as agent. These powers can include:

• Handling banking transactions
• Buying and selling property
• Leasing property
• Settling claims
• Entering into contracts
• Dealing with taxation matters
• Handling matters relating to government benefits
• Maintaining and operating business interests
• Employing professional assistance

12.1.2 Specific Power of Attorney 

     A specific power of attorney imposes limits upon the agent, and may restrict the scope of that person's powers to a single type of conduct or a single transaction. The grantor has the right to give the attorney-in-fact as much or as little power as he or she thinks necessary. For example, the person could be granted the power to handle financial transactions in a specific bank account, or to sign specified documents. Also, any of the broader powers granted by a general power of attorney could be individually authorised.

12.1.3 Terminating Power of Attorney 

     Both types of power of attorney can be limited in duration, by specifying a date after which the power of attorney will no longer be valid. Alternatively, the power can normally be withdrawn immediately by the grantor upon giving written notice.

12.1.4 Example Power of Attorney 

    Here is an example of a specific power of attorney for banking transactions. Carefully read the document, and then answer the questions below.

a) Is there an expiry date or is the power granted indefinitely?

b) Who must check the IDs or passports of the people involved?

c) Which words or phrases in the document have these meanings?

1. a person who has or owns the thing mentioned
2. as a result of this statement, and in such a way that makes it legal
3. to be responsible for something
4. argument or disagreement about something
5. the act of stating officially that something is true or correct

LETTER OF ATTORNEY

Place and Date (e.g. Ha Noi, 11 October 2006)
To: (Name and address of bank)
I am (Full name of grantor)
ID/Passport number:         Place of issue:         Date of issue:
Address:
Being the holder/co-holder of account number:
maintained with (name and branch of bank), hereinafter known as ‘the Bank’.

I hereby authorise (Full name of person granted power of attorney)
ID/Passport number:         Place of issue:         Date of issue:
Address:
on my behalf to: (describe which transactions the person is authorised to carry out)

I hereby declare that the above account is lawful and that there is no dispute in connection with the management and use of the account. I undertake to accept legal responsibility for any false declarations.

I understand that notice of cancellation of this letter of attorney, if any, which is given by me will only be accepted as valid by the Bank in the following circumstances, whichever occurs first:
i) all branches of the Bank have been notified of cancellation of the letter of attorney; or
ii) at the latest 24 hours from the time the Bank receives notification in writing of cancellation of the letter of attorney

Grantor                                      Authorised person
(signed)                                            (signed)

Date:                                                 Date:

Certification of the BankAt ....... (place) ........ on this day ....... (date) ........, the Bank hereby certifies that the grantor and the authorised person have presented a valid ID and/or passport and signed this letter of attorney before the following officers of the Bank:
1) ................................................................................... ; and
2) ...................................................................................

Bank Officers for (Name of bank)

Answer Key 


a. indefinitely
b. The bank officers
c.
1. holder
2. hereby
3. undertake
4. dispute
5. certification

Review of section 12.1

     When dealing with power of attorney, which of these statements is True, and which isFalse? Mark T or F in the box.

1.  An attorney-at-law can be appointed as an attorney-in-fact.
2.  Granting power of attorney removes legal rights from the grantor.
3.  Any competent adult can be granted power of attorney.
4.  Rights granted by power of attorney cannot be limited.
5.  Actions taken by an attorney-in-fact under power of attorney are not legally valid.

Answer Key 

1.   An attorney-at-law can be appointed as an attorney-in-fact
2.   Granting power of attorney removes legal rights from the grantor
3.   Any competent adult can be granted power of attorney
4.   Rights granted by power of attorney cannot be limited
5.   Actions taken by an attorney-in-fact under power of attorney are not legally valid

12.2 Contracts of Employment

Words & Expressions:

     Be sure you know all these words and expressions. Click to learn how each word or expression is pronounced:

aggregate [adj]	: gộp chung, toàn thể
bribery [n]	: việc hối lộ, ăn hối lộ
cease [v]	: dừng, ngừng lại
(to) commit an offence	: vi phạm, phạm tội
convict [v]	: kết án, tuyên bố có tội
consecutive [adj]	: liên tục, liên tiếp
detrimental [adj]	: có hại, gây hại
disciplinary [adj]	: (thuộc) kỷ luật
disclosure [n]	: sự vạch trần, sự phơi bày
eligible (for) [adj]	: đủ tư cách, thích hợp
jail term	: hạn tù
merger [n]	: sự liên doanh, liên kết
maternity leave	: thời gian nghỉ để sinh con
mistreat [v]	: ngược đãi
provided that...	: với điều kiện là, miễn là
reprimand [n]	: lời khiển trách
sentence [v]	: kết án, tuyên án
spouse [n]	: chồng, vợ
theft [n]	: hành vi trộm cắp
to be entitled to (s.t)	: được quyền làm điều gì
to be set aside for	: được để dành, dự trữ

      If you accept a position with a foreign organisation, you may be asked to sign an employment contract that has been written in English. It is important, therefore, to know what you are signing, and which terms and conditions should be included in the contract in order to comply with Vietnamese employment laws. The laws state the minimum obligations of an employer, but your terms and conditions may well be better, and you should keep copies of anything that relates to these terms and conditions. This could include:

• The original advertisement for the job
• Correspondence between you and the employer
• Staff handbook

     Under Vietnamese law, there are different conditions for junior workers (those under 18 years of age), and for people who work under special circumstances (e.g. dangerous work), but for the purposes of this unit we will only examine some of the general conditions that apply to adult workers. Full details of the employment laws should be obtained from a government source.

12.2.1 Payment of wages 

     Employers have the right to select the method of payment of wages, which can be based on time (hours, days, weeks or months), or on products produced, or a project, provided that the employee is notified of the method and frequency of payment.

12.2.2 Social Insurance 

     Under the Labor Code, all employees are eligible for social insurance. Currently social insurance is applicable in Vietnam under a compulsory scheme and a voluntary scheme. The compulsory scheme applies to all enterprises with 10 or more employees. Employers are required to make social insurance contributions equal to 15 per cent of the total payroll amount, of which 11 per cent is applied for pension benefits and survivor’s benefits, and 3 per cent must be set aside for sick leave, maternity leave benefits and 1 per cent for allowances for work related injuries and occupational diseases.

     Each employee must contribute five per cent of total wages to the social insurance fund to cover retirement and death allowances.

     Claims may be made by employees against the social insurance funds in the manner prescribed by the law.

12.2.3 Health insurance 

     Each month employers must pay an amount of 3 per cent of the total wages of employees to the Health insurance Fund, of which 1 per cent is paid by the employee and 2 per cent is contributed by the employer.

12.2.4 Hours of attendance 

     Hour of work should not exceed 8 hours per day or 48 hours per week. Employers have the right to determine the working hours on a daily or a weekly basis provided that the employees are notified in advance.

     In each week, employees are be entitled to a break of at least 1 day (24 consecutive hours).

12.2.5 Overtime 

     Overtime must not exceed 50% of the normal daily working hours of an employee, and if working hours are calculated on a weekly basis, the total number of working hours plus overtime worked
in a day must not exceed 12 hours.

12.2.6 Overtime payment 

     Overtime payment should be calculated at the following rates:

• 150 per cent of an employee’s standard wage, if the employee works overtime on an ordinary business day
• 200 per cent for overtime on weekends
• 300 per cent for overtime worked on public holiday

     There are also regulations relating to payment for shift work. Further information about this should be obtained from a government source.

12.2.7 Annual leave/holidays 

     Employees who have been employed for at least 12 months are entitled to paid annual leave; the standard annual leave period is 12 working days for employees working under normal conditions. In addition, employees are entitled to officially recognised public holidays. When a public holiday coincides with a Saturday or Sunday, employees are entitled to take off the following working day.

     Employees are entitled to 1 day for the marriage of a child, or the death of a parent or spouse’s parents, and 3 days’ holiday upon the marriage of the employee or the death of the employee’s spouse or child. With the permission of the employer, an employee is also entitled to take unpaid leave of absence.

12.2.8 Disciplinary procedures 

    If an employee breaches staff regulations, the employer can take the following courses of action:

a) An employee who commits a minor breach of the rules for the first time can be given an oral or written reprimand.

b) An employee who has received a written reprimand but then commits a second breach within three months of the date of the first reprimand can be assigned or transferred to another position with a lower wage for a maximum period of six months. The six month transfer period may also apply to other breaches of the regulations.

c) An employee may be dismissed under the following circumstances:
• for committing an act of theft, bribery, disclosure of business or technological secrets, or other conduct detrimental to the assets or well being of the enterprise
• for committing another offence during the period when the employee has been assigned or transferred to another job for disciplinary reasons (see b above)
• for being absent from the workplace for 5 days in one month, or 20 days in 1 year, without proper reason

12.2.9 Reorganisation or technological change 

     The law provides that an employer may assign the employee to another job, or dismiss an employee, if the enterprise undergoes organisational restructuring or technological change. The following are considered to be cases of organisational restructuring or technological change:

• Partial or complete change of a machinery, equipment or technological process to achieve increased productivity
• Change of product lines or product structure leading to a reduction in the number of required employees
• Organisational restructuring by merger or dissolution of a number of organisational divisions within an business entity

     The employer must either re-train the employee and assign the employee to another job within the enterprise or, if a new job cannot be found, the employer is required to pay an allowance equivalent to the aggregate amount of one month’s salary for each year of employment, but not less than two months salary.

12.2.10 Terminating contracts 

     The Labor Code provides that a contract is terminated under the following circumstances:

a) upon expiry of the contract
b) upon completion of the tasks set out in the contract
c) by agreement between the parties
d) if the employee is convicted or sentenced to serve a jail term, or is prohibited from performing his/her job in accordance with a court judgement or decision

12.2.11 Termination of contract by an employee 

     An employee employed under an indefinite term contract may terminate the contract at any time by giving 45 days’ notice to the employer. Employees employed under a definite term contract may terminate the contract for the following reasons:

a) The employee is not assigned to a job or workplace, or is not provided with the conditions agreed in the contract
b) The employee is not paid in full and on time the wages due under the contract
c) The employer mistreats the employee
d) For personal or family reasons, the employee is unable to continue performing the contract
e) The employee is elected to public office or is appointed to a position in a State body
f) In the case of a female employee, if the employee becomes pregnant and requires leave of absence as advised by a doctor

12.2.12 Termination of contract by an employer 

     In addition to the circumstances described in sections 12.2.8, 12.2.9 and 12.2.10, an employer may also terminate a contract under these circumstances:

a) The employee repeatedly fails to perform his or her work in accordance with the terms of the contract.

b) If the employee is ill or suffers injury and remains unable to work after having received treatment for a period of 1 year for an indefinite term contract, or 6 months in the case of a definite term contract, and half the contract term in the case of a specific or seasonal job

c) The employer is forced to reduce its production and employment while trying to recover from natural disaster, a fire or a force majeure event

d) The employer ceases operations

The employer must give notice to the employee. The periods of notice are:

• 45 days in the case of an indefinite term contract
• 30 days for a definite term labor contract
• 3 days for a contract for a specific or seasonal job

Review of section 12.2

    Read section 12.2 again carefully and then answer the questions below:

a) Companies of what size must pay social insurance contributions?

b) What are the maximum number of hours an employee is permitted to work in any given day?

c) What is the overtime rate for working on public holidays?

d) An employee can be dismissed for being absent without reason for how many days in any given year?

e) What is the minimum allowance an employer must pay to a worker dismissed as the result of technological change?

f) In sections 12.2.10, 12.2.11 & 12.2.12, which words or phrases have these meanings?

1. stopped or prevented from doing something, especially by law
2. lasting for a period of time that has no fixed end
3. given work or responsibility
4. a position or appointment in the government
5. happening or needed during a particular time of the year

Answer Key 


a. 10 or more employees
b. 12 hours
c. 300%
d. 20 days
e. 2 months’ salary
f. 
1. prohibited
2. indefinite
3. assigned
4. public office
5. seasonal

12.3 House rental contracts

Words & Expressions:

     Be sure you know all these words and expressions. Click to learn how each word or expression is pronounced:

commune[n]	: xã (đơn vị hành chính)
convertible [adj]	: có thể đổi được
fire combat [n]	: việc phòng cháy chữa cháy
lessee [n]	: người thuê nhà, đất
lessor [n]	: người cho thuê nhà, đất
lodge [v]	: cho ở  trọ
pre-condition [n] (prerequisite condition)	: điều kiện tiên quyết
repeal [v]	: huỷ bỏ, bãi bỏ
sanitation [n]	: các hệ thống vệ sinh
(to) serve term	: thụ án tù
temporary residence	: việc tạm trú
utilisation right	: quyền sử dụng

     Foreigners are not permitted to buy property in Vietnam, except under very special circumstances, so foreigners staying for a length of time normally rent a house. There are specific regulations that cover the rental of property to foreigners, and these same regulations also cover houses that are rented out for office use.

     We will now examine some of the important articles in the regulations which need to be covered by a contract. Full details of the regulations can be found in The Government Regulation on Leasing Houses in Vietnam to Foreigners and Vietnamese Residing Abroad.

12.3.1 Who is allowed to lease a house to foreigners? 

     Article 1 of the Government regulations states the following:

The economic organizations, political and social organizations and individuals described thereunder (hereafter referred to as renting party) who meet the conditions prescribed in Article 3 of this Regulation are authorized to lease houses to foreigners and Vietnamese residing abroad (hereafter referred to asforeigners) for lodging, for use as headquarters of representative offices, company branches or establishments for business activities as prescribed by law:

1. Housing businesses set up and operating according to law, including enterprises having foreign investment.

2. Other enterprises and organizations set up and operating according to law which have houses under their ownership and have their legal land use right.

3. Vietnamese citizens who have full civil action capacity and have houses under their ownership and have their legal land use right.

12.3.2 Who is not allowed to lease a house to foreigners? 

     Article 2 of the Government regulations states the following:

The following entities and persons are not allowed to lease houses to foreigners:
a) State agencies, Party offices, Vietnamese political and social organizations and individuals are not allowed to lease their offices or houses under State ownership which they are being allowed to manage or use.

b) Persons who are under investigation for criminal liability, those who are serving their terms, or those whose sentences have not been repealed.

12.3.3 What are the pre-conditions for renting a property to a foreigner? 

     Article 3 of the Government regulations states the following:

A house to be leased to a foreigner must meet these conditions:
1. It has a clear address (number of house, street, ward, etc.) .......................
2. It forms a separate flat (not sharing any room or passage with another flat).
3. Safe in structure and construction.
4. Meeting the conditions for security and order, environmental sanitation, fire combat and prevention.
5. Not be involved in a dispute about ownership or utilisation rights.

12.3.4 What are the pre-conditions for a foreigner who is renting a property? 

     Article 5 of the Government regulations states the following:

A foreigner renting a house for lodging must have a legal permit of temporary residence in Vietnam for six months and more. If he/she rents a house as headquarters of a representative office, or company branch or as an establishment for business activities, he/she must have a permit to establish the representative office, the company branch or for investment co-operation in Vietnam issued by the authorized agency of Vietnam.

12.3.5 What are the responsibilities of the lessor ? 

     According to the Government regulations, the party renting the house (the lessor) to a foreigner (the lessee) has certain rights and must assume certain responsibilities, which include the following (not all responsibilities are included: for full details, refer to The Government Regulation on Leasing Houses in Vietnam to Foreigners and Vietnamese Residing Abroad):

• To pay different kinds of tax (license, turnover, profit, land and house taxes, etc.) as prescribed by law.
• To strictly observe the signed house-renting contract.
• To be entitled to terminate the house-renting contract under the conditions stipulated in the contract or prescribed by law, but the lessee must be given at least 30 days in advance before termination. The settlement of any dispute or any compensation therein shall be effected as stipulated by Vietnamese law.

12.3.6 What are the responsibilities of the lessee? 

     The tenant of the property, the lessee, also has certain rights and must assume certain responsibilities, which include the following:

• To strictly observe the terms under the signed contract.
• To register for temporary residence for himself/herself when coming to live or work at the house, and register for temporary residence for his/her guests staying overnight with the security service agency at the local ward or commune.
• Not to assign the house-renting contract or to re-rent the house to another party.
• To be entitled to terminate the house-renting contract under the conditions stipulated in the contract or prescribed by law. The settlement of any dispute or any compensation therein shall be effected as stipulated by Vietnamese law.

12.3.7 Form of the contract and rental figure 

     Usually a rental contract is printed in both Vietnamese and English. The regulations state:

The house renting contract signed between the renter and tenant must be done in the prescribed form and certified by the agency issuing permits for house renting to foreigners.

The rent rate and the value of the rent written in the contract shall be calculated in Vietnam Dong and shall be converted into US dollars or another convertible currency at the exchange rate announced by the Vietnam State Bank at the time of the signing of the contract.

12.3.8 Penalties for not complying with the regulations 

     It is worth noting that it can be very expensive if a house is rented to a foreigner without the appropriate approval, or if the rental contract is not in the form specified by the regulations.

     Article 17 deals with unauthorised leasing and states:

Enterprises, organizations or individuals that undertake the business of house renting to foreigners without permits shall be fined 50 million Vietnam Dong and shall be forced to end their activities. In case of serious consequences, they shall be prosecuted before law.

     Article 18 deals with with contract violations and states:

Enterprises, organizations and individuals having permits to rent houses to foreigners but do not have duly made house-renting contracts, or who do not fill the procedure for registration ......................, or whose permits and house-renting contracts have expired .................. shall be fined 20 million Vietnam Dong and shall be forced to fill all the procedures as prescribed.