LABOUR OUTSOURCING

JUNE 2013

Content
1. 2. 3. 4. Applicable regulations Conditions to engage outsourced labor Enterprise providing outsourced labor Enterprise using outsourced labor

Applicable regulations
1. Labor Code No.10/2012/QH13 (18 June 2012), Articles 53-58 on labor outsourcing 2. Government Decree No.55/2013/ND-CP (22 May 2013) guiding Article 54.3 of the Labor Code on labor outsourcing, effective as of 15 July 2013

Conditions to engage outsourced labor

1. Engagement for certain purposes:

- Temporary need of labor force for a definite period - Temporary replacement of employees in maternity leave, affected by labor accidents or work-related diseases, or carrying out civic obligations or reducing working hours - Need of high technical or professional qualification employees 2. No engagement for: - Replacing employees on strike or labor dispute - Replacing employees who have been retrenched or - Assigning to work at locations with harsh living conditions 3. Only 17 jobs can be outsourced (receptionist, tax issue processor, interior designer etc) 4. Outsourcing term does not exceed 12 months. Once the term expires, the labor is unable to be supplied to the same enterprise.

Enterprise providing outsourced labor

Certain conditions 1. An escrow deposit of VND2 billion (approx. USD96,000) 2. Charter capital not less than VND2 billion, in case of joint venture total assets of VND10 billion (approx. USD480,000) 3. At least two-years office lease 4. At least three-years experienced head 5. Labor outsourcing license issued the by Ministry of Labor, War Invalids and Social Affairs.

Enterprise providing outsourced labor (cont.)

Major right and obligations Implement obligations of an employer such as paying salary and other benefits to outsourced labor and the like Not pay the salary to the outsourced labor lower than the salary of employee of enterprise using outsourced labor with the same professional qualifications and doing the same job Not lend or borrow the labor outsourcing license Not collect fees from the outsourced labor or outsource the labor without his consent; Not outsource the labor to perform jobs not on the list of 17 permitted jobs or for the term exceeding 12 months Not provide the service to related company within the same group.

Enterprise using outsourced labor

Major rights and obligations Reach agreement with the outsourced labor required for overtime or night work outside the scope of labor outsourcing contract Reach agreement with the outsourced labor and the enterprise providing outsourced labor to officially recruit the labor Not discriminate regarding labor conditions between the outsourced labor and other employees Not collect fees from the outsourced labor Not outsource the outsourced labor to other employer Not use the outsourced labor to perform jobs not on the list of 17 permitted jobs, or for the term exceeding 12 months. =END=