Labor outsourcing – What are 5 acts of the labor outsourcer being prohibited by the law of Vietnam?

The labor outsourcing relation has been very popular in Viet Nam nowadays. Labor outsourcing is that an employee enters the labor contract with an outsourcing company, after which such employee is assigned to work and under the management of another employer who is a labor outsourcer. Accordingly, such a labor outsourcer does not sign a labor contract with such an employee. Therefore, the Vietnamese law has regulations for prohibiting some acts against the labor outsourcer to protect the rights and interests of employees.

Through this article, BLawyers Vietnam would like to list 5 prohibited acts of the labor outsourcer as follows:

labor outsourcing

1. Hiring the outsourced employee for purposes and time limits improperly by the law

Not under any circumstances, the labor outsourcer can use labor outsourcing. The labor outsourcer may only hire the outsourced employee for the following reasons:

(i) To temporarily meet the sudden increase in labor demand over a certain period;

(ii) Replacing employees who are taking maternal leave, have an occupational accident or occupational disease, have to fulfill his/her citizen’s duties;

(iii) Having demand for recruiting highly skilled employees.

Accordingly, the outsourced employee is only hired for a maximum of 12 months. However, the outsourcing company is sanctioned instead of the labor outsourcer in case of exceeding this term.

2. Hiring the outsourced employees to do works that are not on the list by the law

Currently, the labor outsourcer may only hire the outsourced employees to do certain works according to the list in Appendix II of Decree No. 145/2020/ND-CP. Accordingly, the list includes 20 types of work allowed for labor outsourcing. Most types of work are temporary or require high professional and technical qualifications.

If the labor outsourcer violates the above regulation, shall be fined up to VND50,000,000 for individuals and VND100,000,000 for the organization. Therefore, the labor outsourcer should state the name of work in the labor outsourcing contract accurately under the statutory list and assign the employee to do jobs under such contract.

3. Hiring the outsourced employees to replace the employees who cannot be replaced under the law

The labor outsourcer is not allowed to hire the outsourced employees to replace its employees in the following cases:

(i) Employees being on strike or settling labor disputes;

(ii) Employees are dismissed due to changes in organizational structure, technology, economic reasons, full division, partial division, consolidation, or merger of the enterprise.

In this case, the labor outsourcer must sign a labor contract with new employees instead of using labor outsourcing. If violating, the labor outsourcer shall be fined up to VND50,000,000 for individuals and VND100,000,000 for the organization.

4. Transferring the outsourced employees to another employer

Transferring the outsourced employees to another employer is considered as an act of second labor outsourcing. Meanwhile, the labor outsourcer does not directly sign a labor contract with employees. So, they have no right to transfer the outsourced employees to any other parties. In this case, the law prohibits the labor outsourcer to transfer employees to other parties. This act not only violates the labor outsourcing contract but is also illegal.

5. Hiring the outsourced employees from an outsourcing company without the Labor Outsourcing Service License

An outsourcing company that operates without a Labor Outsourcing Service License shall be seriously sanctioned. However, if the labor outsourcer knows such regard but still agrees to use labor outsourcing, it is also considered a legal violation. Accordingly, the labor outsourcer shall be fined up to VND50,000,000 for individuals and VND100,000,000 for the organization per each time of the violation.

Therefore, the labor outsourcer should request the outsourcing company to provide sufficient documents proving its business conditions to enter a labor outsourcing contract, especially the Labor Outsourcing Service License is the prerequisite.

Should you have any questions about the above contents, please revert to BLawyers Vietnam at consult@blawyersvn.com. We are more than happy to hear from you!

Date: 19 January 2022

Writer: Thu Tran

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