When enterprises have to lay off many employees due to economic difficulties or change in technological structure, can they use workers from labor subleasing service?

Legal grounds:

• Labor Code 2019;
• Decree No. 12/2022/ND-CP.

We get the following questions:

I would like to ask if the business has economic difficulties, or due to changes in structure, organization, changes in technology, it has to let many employees quit, can the business use another workers from labor subleasing service to replace those who have been laid off?

Pursuant to Article 42 of the Labor Code 2019, when facing economic difficulties or due to structural or technological changes affecting many employees, enterprises must develop and implement a labor plan.

Pursuant to Article 44 of the 2019 Labor Code, the employment plan includes contents related to the interests of existing employees of the enterprise, without additional contents of alternative labor sources.

According to the above regulations, enterprises in Vietnam must prioritize training and continue to employ existing employees. It is illegal if enterprises lay off many employees, but use workers from labor subleasing service to replace existing employees.

Enterprises may be administratively sanctioned under the provisions of Point d, Clause 2, Article 13 of Decree No. 12/2022/ND-CP as follows:

Article 13. Violations against regulations on labor outsourcing

2. A fine ranging from VND 40,000,000 to VND 50,000,000 shall be imposed on the outsourcer committing one of the following acts:

d) Using outsourced labor to replace employees who have been laid off due to changes in structure or technology; for economic reasons or division; cup; unify; merger;

Note: The above fine is applied to individual. If the enterprise violates, the fine is equal to 02 times the above-mentioned level.