Labor outsourcing is an arrangement in which a worker enters into an employment contract with an outsourcing enterprise, which subsequently dispatches the worker to work for another employer while maintaining labor relations with the outsourcing enterprise with which the employment contract is concluded. Below are 7 basic things that outsourcing enterprises in Vietnam must know from 2021.
Article table of contents
1. What are outsourcing enterprises?
According to Article 12 of the Decree No. 145/2020/NĐ-CP, an outsourcing enterprise means an enterprise that is established in accordance with the Law on Enterprises of Vietnam and is licensed to provide labor dispatch services; hires and enters into employment contracts with employees then dispatch them to work for other employers while still maintaining their labor relation with the enterprise with which their employment contracts are concluded.
2. Licensing conditions for labor dispatch
According to Article 21 of the Decree No. 145/2020/NĐ-CP of Vietnam’s Government, conditions for issuance of labor dispatch licenses are as follows:
- The legal representative of the dispatching agency shall:
+ be an enterprise executive as prescribed by the Law on Enterprises;
+ not have any criminal conviction;
+ have at least 03 years (36 months) of working in labor dispatch or labor supply in the last 05 years before the application for licensing is submitted.
- The enterprise has paid a deposit of 2.000.000.000 VND (2 billion Vietnam dongs).
3. Application for licensing of labor dispatch
According to Article 24 of the Decree No. 145/2020/NĐ-CP of Vietnam’s Government, application for licensing of labor dispatch include:
- The application form No. 05/PLIII in Appendix III hereof;
- The résumé of the dispatching agency’s legal representative according to Form No. 07/PLIII in Appendix III hereof.
- The judicial record form No. 1 of the legal representative. If the legal representative is a foreigner, use the judicial record of his/her home country (issued within 06 months before the application is submitted);
- Documents proving the legal representative’s period of working in labor dispatch or labor supply. To be specific:
+ An authenticated copy of the employment contract or decision on employment and designation of the enterprise’s legal representative;
+ An authenticated copy of the decision on designation or election of the legal representative as the case may be or copy of the Certificate of Enterprise Registration.
- The certificate of deposit payment (Form No. 01/PLIII in Appendix III hereof).
Note: The above-mentioned documents must be translated into Vietnam, authenticated and consularly legalized as prescribed by law if they are written in foreign languages.
>>> View more: Downloads all forms related to the labor field from 2021.
4. Licensing procedures for labor dispatch
According to Article 25 of the Decree No. 145/2020/NĐ-CP of Vietnam’s Government, licensing procedures for labor dispatch are specified as follows:
- The applicant shall submit 01 application to the Department of Labor, War Invalids and Social Affairs of the province where it is headquartered.
- After making sure the application contains adequate documents, the Department of Labor, War Invalids and Social Affairs shall issue a receipt note specifying the date of receipt.
- Within 20 working days from the receipt of the satisfactory application, the Department of Labor, War Invalids and Social Affairs shall examine the application and propose issuance of the license to the President of the People’s Committee of the province.
In case the application is not satisfactory, within 10 working days from the receipt of the application, the Department of Labor, War Invalids and Social Affairs shall send a written request for supplementation of the application to the applicant.
- Within 07 working days from the receipt of the proposal from the Department of Labor, War Invalids and Social Affairs, the President of the People’s Committee of the province shall consider issuing the license; in case the application is rejected, provide a written response and explanation.
Note: A license shall be valid for up to 60 months; a license may be renewed multiple times, each renewal must not exceed 60 months;
5. Cases where labor dispatch permits are not granted
According to Clause 5 Article 25 of the Decree No. 145/2020/NĐ-CP of Vietnam’s Government, the application will be rejected in the following cases:
- The conditions on legal representative and deposit are not fully satisfied;
- A fake license is used for labor dispatch operation;
- The legal representative used to be the legal representative of an enterprise whose license was revoked because of the following reasons: the enterprise allows another organization or individual to use its license; it dispatches employees to do the works that are not on the list of works permitted for labor dispatch in Appendix II hereof; it forges documents in the application for issuance, renewal or reissuance of the license; falsifies the license; uses a fake license over the last 05 years before the application is submitted;
- The legal representative used to be the legal representative of an enterprise that used a fake license.
6. Responsibilities of dispatching agencies
According to Article 31 of the Decree No. 145/2020/NĐ-CP of Vietnam’s Government, responsibilities of dispatching agencies are as follows:
- Publicly post the original license at the headquarters and authenticated copies of the license at its branches and representative offices (if any). In case of relocation to another province, send an authenticated copy of the license to the Department of Labor, War Invalids and Social Affairs of the new location for monitoring.
- Submit labor dispatch reports (Form No. 09/PLIII in Appendix III hereof) every 06 months (by June 20 and December 20) to the President of the People’s Committee and Department of Labor, War Invalids and Social Affairs of the province where the dispatching agency is headquartered (and Department of Labor, War Invalids and Social Affairs of the new location in case of relocation to another province).
- Promptly report the labor dispatch-related incidents to local authorities or at the request of labor authorities.
7. Cases of revocation of the license
According to Article 28 of the Decree No. 145/2020/NĐ-CP of Vietnam’s Government, a dispatching agency will have its license revoked in the following cases:
- It wishes to terminate the labor dispatch operation;
- It is dissolved or declared bankrupt by the court;
- Any of the conditions on legal representative and deposit is not satisfied;
- It allows another organization or individual to use its license;
- It dispatches employees to do the works that are not on the list of works permitted for labor dispatch in Appendix II hereof;
- It forges documents in the application for issuance, renewal or reissuance of the license; falsifies the license; uses a fake license.
Le Vy
- Key word:
- Decree No. 145/2020/NĐ-CP
- Labor outsourcing
