CIRCULAR

GUIDING THE IMPLEMENTATION OF THE COMPENSATION REGIME FOR LABOR ACCIDENT VICTIMS

Pursuant to Article 107 of the Labor Code and Article 11 of Decree No.06-CP of January 20, 1995 of the Government prescribing in details a number of Articles of the Labor Code on labor safety and labor sanitation, the Ministry of Labor, War Invalids and Social Affairs provides the following guidances for the implementation of the regime of compensations for labor accident victims:

I. SUBJECTS ELIGIBLE FOR LABOR ACCIDENT COMPENSATION

Subjects eligible for labor accident compensations are laborers (including apprentices and probationers) who suffer labor accidents while working or being involved in activities related to the performance of their assigned tasks and are certified by a competent agency to have died or lost their working acity by 81% or more due to labor accidents in the following enterprises, agencies and organizations:

- State enterprises;

- Production, business or service enterprises and establishments of other economic sectors;

- Individuals who employ laborers for their production, business or service activities or house work;

- Foreign-invested enterprises, enterprises in export processing zones, industrial parks and high-technology zones;

- Business or service units of administrative and non-business agencies, socio-political organizations, mass organizations; enterprises of the peoples army and the peoples police force;

- Administrative and non-business agencies;

- Agencies, socio-political organizations and mass organizations;

- Foreign or international agencies and organizations in Vietnam employing Vietnamese laborers.

Foreigners working for enterprises, organizations and other individuals on the Vietnamese territory shall be regulated by this Circular, except otherwise provided for by international agreements which the Socialist Republic of Vietnam has signed or acceded to.

II. RESPONSIBILITY TO COMPENSATE FOR LABOR ACCIDENT VICTIMS:

1. Employers (who directly sign labor contracts under the provisions of the Labor Code) of enterprises, agencies and organizations defined in Section I above shall compensate employees who have lost their working acity by 81% or higher, or the next of kin of persons who have died, due to labor accidents as provided for in Clause 3, Article 107 of the Labor Code and Article 11 of Decree No.06-CP of January 20, 1995 of the Government.

2. In cases where employers have bought labor accident insurance from insurance agencies for their laborers, such insurance agencies shall have to make compensations on behalf of the employers. If the compensation amounts paid by the insurance agencies to the labor accident victims are lower than the level prescribed in the Labor Code, the employers shall have to pay the deficit so that the total compensation amounts paid to the labor accident victims, or their next of kin, shall be at least equal to the level prescribed in Clause 3, Article 107 of the Labor Code.

3. If an employee suffers a labor accident outside his/her enterprise, office or organization due to the fault of another person, the accident causer shall have to compensate the labor accident victim according to the extent of his/her fault as prescribed in Chapter V, Part 3 of the Civil Code. The employer of the victim shall request the accident causer to fulfill all his/her liabilities towards the victim as prescribed by the Civil Code; if the compensation amount is lower than the level prescribed in the Labor Code, or the person who has caused the accident is in able of making full compensation, the employer shall pay the deficit so that the total compensation amount paid to the labor accident victim or the next of kin of labor accident victim shall be at least equal to the level prescribed in Clause 3, Article 107 of the Labor Code.

4. In cases where labor accidents occur due to objective causes such as natural calamities, fire or other risks or to the failure to identify the persons causing such accidents, the employer shall have to pay all medical expenses and make compensations for the labor accident victims, or their next of kin as prescribed in Clause 3, Article 107 of the Labor Code.

III. COMPENSATION AMOUNTS PAID TO LABOR ACCIDENT VICTIMS:

1. The amounts of labor accident compensation shall comply with Clause 3, Article 107 of the Labor Code and Article 11 of Decree No.06-CP of January 20, 1995 of the Government, which prescribes in detail a number of Articles of the Labor Code on labor safety and labor sanitation, more specifically:

- The compensation amount shall be at least equal to 30 months wages for the laborer who has lost his/her working acity by 81% or more or the next of kin of the person who died in a labor accident not due to the fault of the laborer. If the laborer is at fault, he/she shall be given an allowance at least equal to 12 months wages.

The wage used as basis for calculating the compensation amount paid to a labor accident victim under Article 13 of Decree No.197-CP of December 31, 1994 of the Government detailing and guiding the implementation of a number of Articles of the Labor Code on wages, shall be the wage agreed in the labor contract and calculated according to the average wage of the latest six consecutive months before the labor accident occurs, including: rank and post wages, territorial allowance, cost-of-living allowance and title allowance (if any). If the victim laborer has only worked for less than 6 months, the average wage for his/her working period before the accident occur shall serve as basis for the calculation of compensation;

- If an apprentice or a work probationer to be employed by an enterprise under Clause 2, Article 23 of the Labor Code suffers a labor accident and loses his/her working acity by 81% or higher, or has died, but not due to his/her faults, the amounts of compensation paid to him/her or his/her next of kin shall be at least equal to 30 months minimum wages; if he/she is at fault, the apprentice or probationer shall still be entitled to an allowance at least equal to 12 months minimum wages in accordance with provisions of the Government at the moment the labor accident occur.

2. The expense on compensation for labor accident victims shall be accounted for in production costs or circulation fees of enterprises or production and business establishments. For administrative or non-business agencies, such costs and fees shall be accounted into regular spendings by such agencies.

IV. THE PROCEDURES FOR MAKING LABOR ACCIDENT COMPENSATIONS

1. The procedures and documents used as basis for the employers to make compensation for labor accident victims are:

a/ For a person who died due to a labor accident, the required document shall be the report on the labor accident investigation made by the competent State agency determining that he/she died due to such labor accident.

b/ For a person who has lost his/her working acity by 81% or higher, the required documents shall include:

- The report on labor accident investigation made by the competent State agency ascertaining the labor accident;

- The paper issued by a medical evaluation board certifying the working acity loss of 81% or higher.

2. The labor accident compensation must be paid in one installment to the labor accident victim or their next of kin within 5 days after completing the above-said procedures and dossiers.

V. ORGANIZATION OF IMPLEMENTATION:

1. This Circular takes effect 15 days after its signing. The other stipulations on labor accident compensation which are contrary to this Circular are now annulled.

The employers shall have to compensate the victims of labor accidents that have occurred in the period from January 1st, 1995 to the effective date of this Circular, who have not been compensated for in accordance with the provisions of this Circular.

Subjects eligible for labor accident compensation under this Circular shall still be entitled to social insurance for labor accidents (if they have been participating in social insurance) as prescribed in Decree No.12-CP of January 26, 1995 of the Government issuing the Regulation on Social Insurance. If they have not participated in the social insurance, they shall only be paid the medical expenses and labor accident compensation in accordance with Article 107 of the Labor Code.

2. The Services of Labor, War Invalids and Social Affairs of the provinces and cities directly under the Central Government, the ministries and branches of central level shall have to disseminate and guide the implementation of this Circular among enterprises, agencies and organizations under their respective charge;

3. Problems arising in the course of implementation shall be reported by the ministries, branches and localities to the Ministry of Labor, War Invalids and Social Affairs for consideration and solution.