ORGANIZATION OF EMPLOYMENT SERVICES IN LABOR CODE 2025
Topic 3:
ORGANIZATION OF EMPLOYMENT SERVICES IN LABOR CODE
Senior Lecturer, Dr. Nguyễn Thị Bích
SUMMARY OF THE SITUATION
[The situation was published on the website: https://NLĐ.com.vn/cong-doan/bat-nhao-dich-vu-viec-lam-lat-tay-chieu-tro-bop-co-201904052039164.htm, accessed on January 15, 2025.]
T.P Employment Introduction Co., Ltd. (located in Ward 13, District 6, Ho Chi Minh City) (hereinafter referred to as “T.P Company”) entered into a contract with a company owned by Ms. Nguyễn Thị (the employer), a business operating entertainment services in Ho Chi Minh City. Under the terms of the contract, Ms. Nguyễn Thị’s company agreed to engage T.P Company to recruit workers for service roles at its entertainment facility, with a recruitment service fee of 1,150,000 VND.
This fee was paid by Ms. Nguyễn Thị’s company to T.P Company upon the introduction of a worker. T.P Company subsequently recruited and introduced Ms. Mai Thị (the worker) to work as a service staff member at the entertainment facility operated by Ms. Nguyễn Thị’s company. No contract existed between Ms. Mai Thị and T.P Company. Nevertheless, T.P Company demanded that Ms. Mai Thị pay the aforementioned service fee of 1 personally150,000 VND. Thus, T.P Company collected service fees from both the worker (Ms. Mai Thị) and the employer (Ms. Nguyễn Thị’s company).
After being hired, no labor contract (LC) was executed between Ms. Nguyễn Thị’s company and Ms. Mai Thị. Ms. Nguyễn Thị orally described the job duties as service work at the entertainment area, with the work location specified as Ho Chi Minh City. In reality, however, Ms. Mai Thị was assigned to perform mechanical work at a location in Biên Hòa City, Đồng Nai Province, rather than Ho Chi Minh City.
After working for a period, Ms. Mai Thị requested that Ms. Nguyễn Thị’s company assign her to the service role as originally introduced by T.P Company. Instead, Ms. Nguyễn Thị’s company insisted that Ms. Mai Thị continue performing the assigned mechanical work and informed her that, if she wished to terminate her employment, she would be required to pay 1,150,000 VND to cover the recruitment fee that Ms. Nguyễn Thị’s company had paid to T.P Company.
COMMENTARY
I. Introduction
In the current context of labor market competition, the system of employment service organizations—including Employment Service Centers and enterprises engaged in employment services—plays a pivotal role in the formation and development of the labor market. These entities serve as a vital link between employers and workers, contributing to the reduction of unemployment rates, enabling workers to secure suitable jobs and stable incomes to support themselves and their families, and fostering a healthy societal development.
For employers, utilizing employment service organizations offers a means to save time and costs in recruiting labor tailored to their needs. Among these, enterprises providing employment services are increasingly demonstrating their significance by undertaking tasks such as: providing career counseling and guidance on national occupational skill standards to assist workers in selecting professions, training plans, and skill development aligned with their abilities and aspirations; offering job placement advice to help workers choose positions matching their capabilities and preferences; advising on recruitment interview skills; providing guidance on self-employment,
domestic and international job searches; counseling employers on recruitment, utilization, and management of labor; advising on workforce management, job creation, and human resource development; offering insights on labor and employment policies for both workers and employers; introducing job opportunities to workers; supplying and recruiting labor per employer requests; collecting and disseminating labor market information; analyzing and forecasting labor market trends; training workers in interview techniques, job search strategies, and other workplace skills; providing vocational education as prescribed by law; and implementing employment-related programs and projects [Article 28 of Decree 23/2021/NĐ-CP, detailing Paragraph 3, Article 37, and Article 39 of the 2013 Law on Employment regarding Employment Service Centers and enterprises engaged in employment services].
Nevertheless, it cannot be denied that, in practice, certain enterprises providing employment services fail to strictly comply with legal regulations governing job placement for workers, thereby adversely affecting the lawful rights and interests of those workers. In this topic, the author will analyze and comment on a case involving a labor relationship established through the activities of an employment service organization in practice. By examining this case, readers will gain an understanding of the current legal framework governing employment service organizations under the 2019 Labor Code and the 2013 Law on Employment, along with their implementing regulations, while also assessing the legality of the situation described above in accordance with the law.
II. Legal Issues
- Assessment of the Legal Relationships Among the Parties in the Case
First, the legal relationship between T.P Employment Introduction Co., Ltd. and Ms. Nguyễn Thị’s company (the employer):
When evaluating this legal relationship under current regulations, Article 28 of Decree 23/2021/NĐ-CP provides that enterprises engaged in employment services are authorized to provide counseling, supply, and recruit labor based on the employer’s requirements. These activities include:
(i) Counseling employers on recruitment, utilization, and management of labor, as well as on workforce management, job creation, and human resource development (Point c, Paragraph 1, Article 28 of Decree 23/2021/NĐ-CP);
(ii) Advising on labor and employment policies for workers and employers, and recruiting labor through competitive selection to identify individuals who meet the employer’s conditions and requirements (Point d, Paragraph 1, Article 28 of Decree 23/2021/NĐ-CP);
(iii) Supplying and recruiting labor per the employer’s request, including recruiting through competitive selection to choose qualified candidates, supplying labor as needed, introducing workers to enterprises licensed to send Vietnamese workers abroad under contracts, or to organizations, individuals investing overseas, or public entities tasked with sending Vietnamese workers abroad under contracts as stipulated in the Law on Vietnamese Workers Working Abroad Under Contracts (Paragraph 3, Article 28 of Decree 23/2021/NĐ-CP).
In this case, T.P Employment Introduction Co., Ltd. (located in Ward 13, District 6, Ho Chi Minh City, and assumed to be duly licensed under current regulations) was entitled to provide counseling and supply labor per the request of Ms. Nguyễn Thị’s company, an employer seeking workers. Pursuant to the employer’s request, T.P Company was obligated to supply a number of workers for service roles at the entertainment facility as specified. Specifically, T.P Company introduced Ms. Mai Thị (the worker) to work at Ms. Nguyễn Thị’s company.
Thus, the relationship between T.P Company and Ms. Nguyễn Thị was established based on a contract for employment services, mutually agreed upon regarding the requirements for labor supply and recruitment, which aligns with current legal provisions.
Second, the legal relationship between T.P Employment Introduction Co., Ltd. and Ms. Mai Thị:
Under Paragraphs 1 and 2, Article 28 of Decree 23/2021/NĐ-CP, enterprises engaged in employment services are authorized to provide job placement counseling to workers to help them select positions suited to their abilities and aspirations, advise on recruitment interview skills and job search techniques, and introduce job opportunities to workers.
Accordingly, T.P Employment Introduction Co., Ltd. introduced Ms. Mai Thị to a service position at the entertainment facility, consistent with the requirements of Ms. Nguyễn Thị’s company. Since service work at an entertainment facility is not among the prohibited job categories, T.P Company’s introduction of Ms. Mai Thị as a worker for Ms. Nguyễn Thị’s company was lawful.
Third, the legal relationship between Ms. Nguyễn Thị’s company and Ms. Mai Thị:
A labor relationship is a social relationship arising from the hiring and utilization of labor between a worker and an employer. In this case, through the facilitation of T.P Employment Introduction Co., Ltd., Ms. Mai Thị began working for Ms. Nguyễn Thị’s company. Ms. Mai Thị performed specific tasks, received wages, and was subject to the management and direction of Ms. Nguyễn Thị’s company. Pursuant to Article 13 of the 2019 Labor Code: “If the parties agree under a different name but the content demonstrates paid work, wages, and the management, direction, and supervision by one party, it shall be deemed a labor contract (LC).”
Thus, although no written LC was executed between Ms. Nguyễn Thị’s company and Ms. Mai Thị in this case, the substance and nature of their relationship—reflecting paid work, wages, and management, supervision, and direction—establishes that a labor relationship (LR) was formed and is considered an LC.
Under Paragraph 2, Article 13 of the 2019 Labor Code: “Before employing a worker, the employer must enter into an LC with the worker,” and Paragraph 1, Article 14 of the 2019 Labor Code: “An LC must be concluded in writing and executed in two copies, with the worker retaining one copy and the employer retaining one copy, except as provided in Paragraph 2 of this Article.”
Accordingly, prior to employing Ms. Mai Thị, Ms. Nguyễn Thị’s company was required to enter into an LC with her. The LC must be in writing or concluded via electronic means in the form of a data message as prescribed by laws on electronic transactions. The failure of Ms. Nguyễn Thị’s company to execute a written LC with Ms. Mai Thị constitutes a violation of the legal requirements for concluding an LC.
This conduct may subject Ms. Nguyễn Thị’s company to administrative penalties under Point a, Paragraph 1, Article 9 of Decree 12/2022/NĐ-CP:
“A fine shall be imposed on an employer for any of the following acts: failing to conclude an LC in writing with a worker employed for a job with a term of one month or more; failing to conclude an LC in writing with an authorized representative of a group of workers aged 18 or older for seasonal or specific jobs with a term of less than 12 months as stipulated in Paragraph 2, Article 18 of the Labor Code; concluding an incorrect type of LC with a worker; or concluding an LC that lacks the essential contents required by law…”
Moreover, Ms. Nguyễn Thị’s company also violated the law by failing to adhere to the agreed terms regarding “working hours,” “job duties,” and “work location” as initially introduced by T.P Company to Ms. Mai Thị. This breach significantly impacted Ms. Mai Thị’s lawful rights and interests.
- Determination of the Obligation to Pay Employment Service Fees
Pursuant to Paragraph 4, Article 29 of the 2013 Law on Employment, enterprises engaged in employment services may collect fees in accordance with regulations on fees and charges. Specifically, Circular No. 72/2016/TT-BTC, effective from January 1, 2017, transitioned employment services to a pricing model.
However, the pricing of these services is not subject to mutual agreement between the parties; rather, it must adhere to a pricing schedule for employment services established by the employment service enterprise and publicly posted at its headquarters, as mandated by Paragraph 5, Article 31 of Decree 23/2021/NĐ-CP. If an employment service enterprise fails to establish or publicly post the pricing schedule for labor supply services at its headquarters, it may face an administrative fine ranging from 1,000,000 VND to 3,000,000 VND, as stipulated in Point c, Paragraph 2, Article 7 of Decree 12/2022/NĐ-CP.
In the case at hand, the parties agreed that Ms. Nguyễn Thị’s company was obligated to pay a service fee of 1,150,000 VND for the supply and recruitment of labor. Consequently, Ms. Nguyễn Thị’s company bears the legal obligation to remit this amount.
Regarding the worker, under Paragraph 2, Article 11 of the 2019 Labor Code, “Employee shall not be required to pay costs associated with labor recruitment.” Additionally, pursuant to Point b, Paragraph 1, Article 8 of Decree 12/2022/NĐ-CP, “A fine ranging from 1,000,000 VND to 3,000,000 VND shall be imposed on an employer who collects fees from a employee participating in recruitment,” and the employer is required to refund any such collected amount to the worker [Paragraph 4, Article 8 of Decree 12/2022/NĐ-CP]. Therefore, under all circumstances—including if Ms. Mai Thị terminates her labor relationship with Ms. Nguyễn Thị’s company—she has no obligation to pay Ms. Nguyễn Thị’s company the recruitment service fee of 1,150,000 VND.
- Legal Consequences When an Employer Fails to Comply with Agreed Working Conditions
In its relationship with Ms. Nguyễn Thị’s company, T.P Company fulfilled its obligation to supply labor in accordance with the employer’s requirements (i.e., recruiting a worker for a service role at the entertainment facility). Upon hiring Ms. Mai Thị, Ms. Nguyễn Thị’s company agreed with her that the job would involve service work at the entertainment facility in Ho Chi Minh City. However, during the performance of the labor contract (LC), Ms. Nguyễn Thị’s company failed to honor these terms. Specifically, it did not assign Ms. Mai Thị the agreed-upon service role or work location; instead, she was required to perform mechanical work in Biên Hòa City, Đồng Nai Province.
Under Point a, Paragraph 2, Article 35 of the 2019 Labor Code:
“2. A worker may unilaterally terminate the LC without prior notice in the following cases:
a) The worker is not assigned the agreed-upon job or work location, or the agreed working conditions are not ensured, except as provided in Article 29 of this Code.”
When Ms. Mai Thị was not assigned the agreed service role at the entertainment facility in Ho Chi Minh City, nor provided with the agreed working conditions (e.g., working hours), she had the right to demand that Ms. Nguyễn Thị’s company assign her the correct job, work location, and working conditions as initially agreed. If Ms. Nguyễn Thị’s company failed to comply, Ms. Mai Thị was entitled to unilaterally terminate the LC without the obligation to provide prior notice. Furthermore, she bore no responsibility to reimburse the 1,150,000 VND recruitment service fee.
III. Conclusion
To safeguard the rights and interests of workers participating in labor relationships as “sellers of labor,” the law must impose strict sanctions to address violations by employment service organizations and employers recruiting through such entities when they fail to ensure the working conditions as initially represented.
Enhanced inspection and oversight of employers receiving labor from employment service enterprises are also necessary. Concurrently, workers must familiarize themselves with legal provisions governing participation in job counseling and recruitment through employment service organizations to protect their lawful rights and interests, thereby fostering harmonious and stable labor relationships. With the insights provided above, the right to employment for workers can be ensured and effectively realized in practice, contributing positively to the nation’s economic development.
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