I. Definition of labor dispatch sector
According to Article 52 The Labor Code 2019:
Labor dispatch is defined as an act in which an employee enters into an employment contract with a labor dispatch agency whereby an employee is assigned to work under management of another employer while maintaining a labor relationship with an employer with whom the employment contract was signed.
Labor dispatch is:
- A conditional sector
- Only be conducted by businesses which have Labor dispatch licenses
- Only apply to some particular types of work
Provisions of labor dispatch is stipulated in Section 5 Chapter III The Labor Code 2019 and Decree 145/2020/ND-CP.
II. Does the foreign investor have the ability to conduct labor dispatch activities in Vietnam?
According to Annex IV Decree 31/2021/ND-CP, Labor dispatch is a conditional sector thus investors have to consider the market access conditions applied to foreign investors which are stipulated in international treaties that Vietnam is a member. However, the labor dispatch sector is not currently stipulated in WTO, FIAs’ commitment. Therefore, foreign investors who are planning to conduct labor dispatch activities in Vietnam shall have the approval of The Ministry of Planning and Investment, The Ministry of Sector Management.
III. Conditions of conducting labor dispatch of foreign businesses
In order to conduct labor dispatch activities in Vietnam, the business shall have the approval of The Ministry of Planning and Investment, The Ministry of Sector Management and investment project which has been issued an Investment Registration Certificate (IRC). In addition, according to Article 12 Decree 145/2020/ND-CP, foreign businesses also have to fulfill following conditions:
– The foreign business is established under The Enterprise Law;
– The foreign business is issued The Labor dispatch license;
– The foreign business recruits, enters into contracts with employees before assigning them to work under management of another employer while maintaining labor relationships with an employer with whom the employment contract was signed;
– Conducting in the granted sector which is stipulated in Annex 2 Decree 145/2020/ND-CP.
IV. License for conducting labor dispatch
*Conditions for licensing
About the representative: the business’s representative conducts labor dispatch activities shall meet following conditions:
– Being the representative according to provisions stipulated in Enterprise Law;
– Having no Criminal record;
– Having directly worked as specialists or managers in labor dispatch or labor supply for 03 years (36 months) or more within 05 consecutive years before applying for license.
About the business: foreign business has made a deposit of 2.000.000.000 VND (two billion VND)
*Dossiers of application for a license
– The business’s written application for a license;
– The curriculum vitae of the legal representative or the judicial record card in the country of nationality;
– Documents proving the period of direct work as a specialist or a manager in labor dispatch of a business’s representative;
– Certificate of deposit for labor dispatch activities.
Note: The judicial record shall be issued no more than 06 months from the date of the application submission. The judicial record, Proving documents in foreign language shall be translated into Vietnamese, authenticated and consular legalized in accordance with law
*Cases in which license are not granted
– Fail to meet the licensing conditions;
– Use a fake license to conduct labor dispatch activities;
– Have a legal representative who used to be a representative of a business whose license has been revoked for the reasons specified at Points d, đ and e, Clause 1, Article 28 of this Decree for 05 consecutive years immediately before applying for a license for labor dispatch;
– Have a legal representative who used to be a representative of a business using a fake license.
V. Procedures of licensing
Step 1: The business shall submit an application for a license to the Department of Labor, War Invalids and Social Affairs where the enterprise’s headquarter is located to apply for a license.
Step 2: After considering valid documents, the Department of Labor, War Invalids and Social Affairs shall issue a receipt clearly stating the date, month and year of receipt of the application for a permit
Step 3: Within 20 working days from the date of receipt of the secured application as prescribed, the Department of Labor, War Invalids and Social Affairs shall verify and submit it to the Chairman of the provincial People’s Committee for issuance of a license to the enterprise.
In case the dossier is not secure as prescribed, within 10 working days from the date of receiving the dossier, the Department of Labor, War Invalids and Social Affairs shall send a written request to the business to complete the dossier.
Step 4: Within 07 working days from the date of receiving the dossier submitted by the Department of Labor – Invalids and Social Affairs, the Chairman of the provincial People’s Committee shall consider and grant the license to the business; in case the license is not granted, the business shall be receipt documents stating the reason for not granting the license.
*Competent authority for licensing
The Chairman of the People’s Committee of the province where the business’s headquarter is located has the authority to grant, extend, re-issue and revoke license for businesses.
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