Nguyen Chi Trung, an Associate with Indochine Counsel
To provide detailed guidelines to enterprises engaged in employment service activities as stipulated under Labour Code 2012, on May 23, 2014, the Government of Viet Nam issued Decree No 52/2014/ND-CP providing conditions and procedures for issuance of an operation licence for enterprises engaged in employment-service activities, which will take effect as from July 15,2014, ("Decree 52").
It is expected that Decree 52 may facilitate enterprises to engage in employment service business, by loosening licensing conditions.
Let us take a closer look at significant contents of the decree:
Decree 52 specifies statutory requirements applicable to enterprises engaged in employment-service activities previously called "employment introduction activities" by Decree No 19/2005/ND-CP dated February 28, 2005.
This provided conditions and procedures for the establishment and operations of employment-introduction organisations as amended and supplemented by Decree No 71/2008/ND-CP dated June 5, 2008 (collectively, "Decree 19") which became no longer effective as from January 20, 2014.
Employment service activities
In general, employment-service activities under Decree 52 almost remain unchanged in comparison with the same under Decree 19, which include the following main activities:
"Providing employment-consultancy services to employees and employers;
"Introducing jobs to employees, supplying and recruiting employees at the requests of employers;
"Collecting, analysing, forecasting and providing labour market information; and
"Conducting job-search skills training and vocational training in accordance with law.
Conditions for obtaining an operation licence for employment service activities ("Operation Licence")
The conditions for obtaining the Operation Licence under Decree 52 are looser compared with the same under Decree 19. Particularly, an enterprise engaged in employment-service activities must meet all of the following three conditions (instead of four conditions as previously required by Decree 19) to be granted the Operation Licence:
"The enterprise must have a stable head office under a lease with a term of at least 36 months if the head office premises is leased from a landlord;
"The enterprise must have at least three qualified employees of college level or higher, sufficient civil ability and clear curricula vitae; and
"The enterprise must have at least VND300 million deposited at the bank where it has opened its main transaction account for settlement of possible risks and compensations when conducting employment-service activities.
There are several key differences between Decree 52 and Decree 19. Generally, in comparison with Decree 19, Decree 52 provides more favourable conditions to enterprises engaged in employment-service activities. Several key differences between Decree 52 and Decree 19 are as follows:
"The duration of the Operation Licence or each of its renewals is extended up to 60 months instead of only, at most, 36 months under Decree 19;
"The personnel requirements for obtaining the Operation Licence under Decree 52 are easier than Decree 19. In particular, Decree 19 requires the enterprise to have at least five employees, each having collegial or higher degree in economics, law or a foreign language. Decree 52 only requires the enterprise to have at least three employees, each having collegial or higher degree; and
"The facilities required for obtaining the Operation Licence under Decree 19, including (i) a room for employment consultancy activities, (ii) a room for jobs recommendation and labour supply, and (iii) a room for labour-market, information-related activities all fully equipped with computers, telephones, faxes, etc. are no longer required under Decree 52.
For the avoidance of detrimental effects on enterprises licensed or to be licensed under Decree 19 to conduct employment-introduction activities before the effective date of Decree 52, Decree 52 provides that:
"Enterprises licensed to conduct employment-introduction activities before Decree 52 takes effect shall be still entitled to operate until the expiry of their employment-introduction licenses.
"Enterprises that have already submitted proper application dossiers for obtaining employment-introduction licences in accordance with Decree 19 before Decree 52 takes effect shall be granted the Operation Licences.
"Enterprises whose employment introduction licences expire during the period from January 10, 2014, to the effective date of Decree 52 shall be entitled to conduct employment-service activities until the effective date of Decree 52.