Decree straightens out labour outsourcers

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“Labour outsourcing first started in 2001 but fell outside the purview of the law,” said general director of Amica Enterprise Development Solutions Company Trinh Dinh Long.

Long said the service quickly excelled in cities and provinces with strong labour markets like Hanoi, Ho Chi Minh City, Binh Duong, Dong Nai, or Danang.

Before penning provisions to the Labour Code, the Ministry of Labour, Invalids and Social Affairs (MoLISA) and the International Labour Organisation conducted surveys and studies.

One such study showed that in 2011 several localities, Binh Duong, Ho Chi Minh City and Can Tho, hosted dozens of labour outsourcing companies looking primarily for manual workers and security guards.

Binh Duong is home to 51 such businesses, Ho Chi Minh City 59, and Can Tho 32.

Under the few labour outsourcing laws Vietnam has, companies in the field are responsible for recruitment, training, and signing contracts and paying insurance for labourers.

Many however, convinced workers to sign short-term contracts (under three-months) to avoid paying insurance.

Nguyen Dang Tuan, a security guard for a private company on Hanoi’s Cau Giay street, said he only receives $170 a month out of the $262 his recruitment company, Tin Nghia, paid for his services.

“I don’t know whether Tin Nghia pays for my social insurance or not. I don’t ask and accept my meager pay as getting a job now is difficult enough,” he added.

The new decree will require labour outsourcing businesses to satisfy several requirements such as a deposit of $95,000 before operations begin, directors having at least three years’ experience working in the field, and the company having an office in the same place for at least two years.

MoLISA said the deposit was to ensure the payment of salaries if clients welch, statutory insurance contributions, and compensation fines for if the company breaches a labour contract.

The director of one Hanoi security guard company said $95,000 was excessive and suggested basing the number on each firms’ ability and size.

MoLISA said the deposit was to protect susceptible workers from their employers by ensuring they are capable of operating the service and backing up their commitments.