VI In the context of an increasingly flexible and diverse labor market, the labor leasing model has become a popular business solution, helping businesses quickly respond to fluctuating human resource needs without having to officially recruit. However, this is a conditional business model, strictly managed by Vietnamese law to protect the legitimate rights of employees. It is extremely necessary to clearly understand the legal nature of labor leasing activities, as well as the strict conditions that businesses must meet to be licensed to operate. This not only helps service providers operate legally, but also helps employers understand their responsibilities and obligations. Let’s find out more about this issue with Pham Consult.
- Concept of labor leasing
Article 52 of the 2019 Labor Code stipulates that labor leasing is the act of an employee signing a labor contract with an employer who is a labor leasing enterprise, after which the employee is transferred to work and is under the management of another employer while still maintaining the labor relationship with the employer who signed the labor contract.
Labor leasing is a conditional business line and profession, only carried out by enterprises with a Labor Leasing License and applicable to certain jobs.
- Principles of labor leasing
Labor leasing must comply with the following principles:
– The maximum term of labor leasing for employees is 12 months.
– The lessee is allowed to use leased labor in the following cases:
+ To temporarily meet the sudden increase in labor demand for a certain period of time;
+ To replace employees during maternity leave, work-related accidents, occupational diseases, or to fulfill civic obligations;
+ To have a need to use highly skilled and technical labor.
– The lessee is not allowed to use leased labor in the following cases:
+ To replace employees who are exercising the right to strike or resolve labor disputes;
+ There is no specific agreement on the responsibility for compensation for work-related accidents and occupational diseases of leased employees with the labor leasing enterprise;
+ To replace employees who are laid off due to changes in structure, technology, for economic reasons, or division, separation, merger, or consolidation.
– The lessee is not allowed to transfer leased employees to other employers; It is not allowed to use sublet workers provided by enterprises that do not have a Labor Subleasing License.
III. Conditions for labor subleasing enterprises to be allowed to operate
Labor subleasing is a conditional business line according to the 2020 Investment Law. According to Clause 1, Article 54 of the 2019 Labor Code and Article 21 of Decree No. 145/2020/ND-CP of the Government, labor leasing enterprises must meet the following conditions:
– Labor subleasing enterprises must make a deposit;
– Labor subleasing enterprises have been granted a Labor Subleasing License. In particular, the legal representative of the enterprise performing labor subleasing activities must be the enterprise manager according to the provisions of the Enterprise Law; no criminal record and have directly worked as a specialist or manager in labor leasing or labor supply for at least 03 years (36 months) within 05 consecutive years before applying for a license.
- Procedures for applying for a Labor Leasing License
- Application for a Labor Leasing License
The application for a Labor Leasing License is specified in Article 24 of Decree 145/2020/ND-CP, including the following documents:
(i) The enterprise’s application for a license according to Form No. 05/PLIII Appendix III issued with Decree 145/2020/ND-CP;
(ii) A CV of the legal representative of the enterprise according to Form No. 07/PLIII Appendix III issued with Decree 145/2020/ND-CP;
(iii) Criminal record certificate No. 1 according to the law on criminal records of the legal representative of the enterprise. In case the representative is a foreigner who is not eligible for criminal record certificate No. 1, it shall be replaced by a criminal record certificate in the country of nationality. These documents must be issued no more than 06 months before the date of application submission. Documents in foreign languages must be translated into Vietnamese, certified and consularly legalized according to the law.
(iv) Documents proving the time of direct professional or managerial work in labor leasing or labor supply of the legal representative of the enterprise, which is one of the following types of documents:
- a) Certified copy of the original labor contract or employment contract or decision on recruitment, appointment, assignment of tasks of the legal representative of the enterprise;
- b) Certified copy of the original appointment decision (for those working under the appointment regime) or document recognizing the election results (for those working under the election regime) of the legal representative of the enterprise or a copy of the business registration certificate (in case of the legal representative of the enterprise leasing or supplying labor).
The documents specified in Point a and Point b above are foreign documents and must be translated into Vietnamese, certified and consularly legalized in accordance with the law.
(v) Certificate of deposit for labor leasing activities according to Form No. 01/PLIII Appendix III issued with Decree 145/2020/ND-CP.
- Procedures for requesting a license to operate labor leasing
Step 1: The enterprise sends a set of documents to the Department of Home Affairs where the enterprise has its head office to request a license.
Step 2: After checking all the documents specified in Article 24 of Decree 145/2020/ND-CP, the Department of Home Affairs issues a receipt stating the date, month, and year of receiving the application for a license.
Step 3: Within 20 working days from the date of receiving the documents as prescribed, the Department of Home Affairs shall examine and submit to the Chairman of the Provincial People’s Committee to issue a license to the enterprise.
In case the dossier does not meet the regulations, within 10 working days from the date of receiving the dossier, the Department of Home Affairs shall issue a document requesting the enterprise to complete the dossier.
Step 4: Within 07 working days from the date of receiving the dossier submitted by the Department of Home Affairs, the Chairman of the Provincial People’s Committee shall consider and grant a license to the enterprise; in case the license is not granted, a written reply shall be sent to the enterprise stating the reasons for not granting the license.
Note: Enterprises shall not be granted a License to operate labor subleasing in the following cases:
– Failure to ensure the conditions as prescribed in Article 21 of Decree 145/2020/ND-CP;
– Having used a fake license to operate labor subleasing;
– The legal representative has been the legal representative of the enterprise whose license was revoked for the reasons specified in points d, dd and e, Clause 1, Article 28 of Decree 145/2020/ND-CP within 05 consecutive years before the request for a license to operate labor leasing;
– The legal representative has been the legal representative of the enterprise using a fake license.
