Vietnam Contents required in the labor outsourcing contracts from 2021

Vietnam Contents required in the labor outsourcing contracts from 2021 (Illustration)

According to Clause 1, Article 55 of the Labor Code 2019, the outsourcing enterprise and the client enterprise in Vietnam shall conclude a written labor outsourcing contract, which is made into 02 copies, each of which shall be kept by a party. The labor outsourcing contract in Vietnam must include the following main contents:

- The work location, the vacancy which will be filled by the outsourced worker, a detailed description of the work, and detailed requirements for the outsourced worker;

- The labor outsourcing duration; the starting date of the dispatch period;

- Working hours, rest periods, occupational safety and health at the workplace;

- Responsibility for compensation in case of occupational accidents and occupational diseases (This is new content according to the Labor Code 2019, which was not required in the Labor Code 2012);

- Obligations of each party to the outsourced worker.

However, Clause 2, Article 21 of Decree 29/2019/ND-CP also stipulates that the outsourcing enterprise does not enter into an agreement with the outsourcing party about the responsibilities for paying occupational accident or disease compensations for the outsourced workers in Vietnam.

Thus, under Decree 29/2019/ND-CP, the responsibility for paying occupational accident or disease compensations shall be made in an agreement rather than a mandatory content in the labor outsourcing contract, potentially leading to disputes if not clearly defined as in labor outsourcing contract specified in the Labor Code 2019.

When the promulgation of Labor Code 2019 marked a new step forward. The responsibility for paying occupational accident or disease compensation is required in the labor outsourcing contract to the entity bearing the responsibility for paying occupational accident or disease compensation when an outsourced worker encounters an occupational accident or disease to claim rights and settle disputes.

In addition, the Labor Code 2019 also issued guidelines for labor outsourcing rules that were not addressed in the Labor Code 2012. To be specific:

1. The maximum duration of labor outsourcing is 12 months.

2. The client enterprise may employ an outsourced worker in the following cases:

- Employment is necessary for the sharp increase in labor demand over a limited period;

- The outsourced worker is meant to replace another employee who is taking maternal leave, has an occupational accident or occupational disease or has to fulfill his/her citizen’s duties;

- The work requires highly skilled workers.

3. The client enterprise may not employ an outsourced worker in the following cases:

- The outsourced worker is meant to replace another employee during a strike or settlement of labor disputes;

- There is no agreement with the outsourcing enterprise on responsibility for compensation for the outsourced worker’s occupational accidents and occupational diseases;

- The outsourced worker is meant to replace another employee who is dismissed due to changes in organizational structure, technology, economic reasons, full division, partial division, consolidation or merger of the enterprise.

4. The client enterprise must not dispatch an outsourced worker to another employer; and must not employ an employee dispatched by an enterprise that does not have a labor outsourcing license.

These regulations are also scattered in various legislative documents on the elaboration of the Labor Code 2012. However, the Labor Code 2019 has consolidated and clearly stipulated them as labor outsourcing rules in Vietnam. Unlike the Labor Code 2012, the Labor Code 2019 has specified each matter to reduce the need for additional guiding documents, significantly saving costs for the nation.

Le Hai

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