January 7, 2025

Legal Framework Governing Outsourcing and Outstaffing in Uzbekistan

1. Regulatory framework

2. Definitions and keyconcepts

3. Procedures and contractual obligations

4. Employee rights

5. Appendix

The growing demand for flexible labor practices has increased outsourcing and outstaffing services in Uzbekistan. These solutions allow businesses to meet labor demands without direct employment relationships but require adherence to specific regulatory frameworks. 

1. Regulatory framework 

For reference, the legislative acts that govern outsourcing and outstaffing services in Uzbekistan are listed below: 

Civil Code of the Republic of Uzbekistan (Chapter 38 on “Provision of services for a fee”)

Law on Employment of the Population (Article 16 on “Outstaffing services”)

Resolution No. 706 of the Cabinet of Ministers on Approval of the Regulation on the Procedure for Providing Outstaffing Services

2. Definitions and key concepts

Outsourcing refers to a business contracting a third party to perform specific tasks or services. These services, outlined in a formal agreement, are typically intangible and include IT support, customer service, or consulting.

Outstaffing is a separate circumstance, when a business temporarily assigns employees of one company (the “outstaffer”) to work under the control and supervision of another company (the “recipient organization”). It is worth noting that the relationship between the employee and the outstaffer remains intact during the specified employment period.

The key difference between the two service types lies in the scope of responsibility and regulatory focus. 

3. Contractual requirements and obligations

Unlike the explicit outline of outstaffing in Resolution No. 706, outsourcing is understood implicitly through Chapter 38 of the Civil Code. Nevertheless, the process is straightforward. Businesses draft outsourcing contracts based on the requirements stipulated in Chapter 38 of the Civil Code, which governs contracts for the provision of services for a fee.

For outstaffing services, the requirements are more specifically detailed in Resolution No. 706 of the Cabinet of Ministers. This resolution establishes a regulatory framework for outstaffing agreements, ensuring they are executed in compliance with professional qualifications and clearly defined paid services.

Obligations of the outstaffer are further defined in Resolution No. 706, including:

  • Conclude employment contracts with employees in compliance with labor laws;
  • Provide appropriately qualified employees to recipient organizations;
  • Ensure timely payment of wages and compliance with labor safety standards;
  • Arrange mandatory civil liability insurance for industrial accidents and occupational diseases;
  • Maintain confidentiality regarding the recipient organization’s commercial or service data.

In turn, the receiving organization also bears significant responsibilities, including: 

  • Manage the work and safety of assigned employees;
  • Provide necessary tools, equipment, and resources for job performance;
  • Ensure that working conditions and wages match those of equivalent employees within the organization.

The parties to an outstaffing agreement may have other obligations, such as those directly stipulated in legislative acts or the agreement, as well as obligations under a outstaffing deal, such as covering the employee’s living expenses and providing their children with education when they are sent to a receiving organization.

The fee paid by the recipient organization to the outstaffer includes wages, allowances, additional costs, and the outstaffer’s profit.

4. Employee rights

In Uzbekistan, the rights of employees engaged through outstaffing arrangements are protected under multiple legal frameworks, including the Law on Employment of the Population and the Labor Code.

Employees also remain under the formal employment of the outstaffer throughout the duration of the assignment, guaranteeing that the employment benefits, such as social security contributions, paid leave, and insurance, are preserved in accordance with labor legislation.

Both the outstaffer and the recipient organization are jointly responsible for ensuring compliance with labor safety standards. Resolution No. 706 mandates that recipient organizations provide dispatched employees with the necessary tools, equipment, and safety measures to perform their work effectively.

In addition, Chapter 3 of the Resolution outlines activities that are not allowed to be performed under the outstaffing contract, including work on objects and equipment classified as high-risk and during insolvency procedures (as well as when there is a risk of mass layoffs). Lastly, the term of sending employees should not exceed nine months within one calendar year, although the agreement may serve as the basis for an extension.

5. Appendix

Provisional scheme for outstaffing services in Uzbekistan:

Steps   Subjects   Events   Deadlines
     
             
Stage 1   Receiving organization (legal entity)   1. Determines the need for additional staff required for reception on the basis ofoutstaffing based on the number of employees.

2. Submits an offer to the outstaffer for the provision of outstaffing services.

   Out of necessity
             
Stage 2   Outstaffer, receiving organization   Draws up an outstaffing contract.   By agreement
             
Stage 3   Outstaffer   The outstaffer concludes additional agreements (supplement to the employment contract) with employees in the receiving organization to carry out work in an outstaffing manner.

As necessary, recruits additional personnel with the required qualifications for subsequent deployment to the receiving organization.

Forms a list of employees to be sent to the receiving organization in accordance with the contract, as necessary.

   In the period stipulated in the outstaffing contract
             
Stage 4   Outstaffer   Delivers employees to host organization.

As necessary, monitors compliance with the terms of the employment contract and additional agreement by the employees sent to the receiving organization.

   Creates a report on the hours worked and wages for each hired employee
             
Stage 5   Receiving organization   1. Creates a report on working hours and wages for each posted employee.

2. Pays the outstaffer for his services in accordance with the outstaffing contract.

   Every month

 

In accordance with the terms of the outstaffing agreement
     
             
Stage 6   Outstaffer   Pays wages to employees sent to receiving organization.   At least 2 times a month
             
Stage 7   Outstaffer, receiving organization   1. Draws up a record of completed works.

2. Sends an application.

3. Performs a full settlement in accordance with the terms of the outstaffing contract.

  

No later than 10 days after the expiration of the outstaffing contract