DECREE

ON POLICIES TOWARDS LABORERS REDUNDANT DUE TO THE RESTRUCTURING OF STATE ENTERPRISES

THE GOVERNMENT

Pursuant to the December 25, 2001 Law on Organization of the Government;
Pursuant to the June 23, 1994 Labor Code;
At the proposal of the Minister of Labor, War Invalids and Social Affairs,

DECREES:

Chapter I

SCOPE AND SUBJECTS OF APPLICATION

Article 1.- This Decree’s application scope covers State enterprises which undertake the restructuring measures approved by the competent State agencies, including:

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2. State enterprises converted into one-member limited liability companies.

3. State enterprises converted into joint-stock companies; joint-stock companies converted from State enterprises with operation duration of up to 12 months counting from the date they are granted business registration certificates under the Enterprises Law.

4. State enterprises undertaking merger or amalgamation.

5. State enterprises undertaking transfer, sale, business contracting, or lease.

6. State enterprises being dissolved or going bankrupt.

Article 2.- Subjects of application of this Decree are laborers performing labor contracts with indefinite terms or terms ranging from 1 to 3 years, including:

1. Redundant laborers in the enterprises defined in Clauses 1, 2, 3, 4 and 5, Article 1 of this Decree, who had been recruited before April 21, 1998 (the time of implementation of the Prime Minister’s Directive No.20/1998/CT-TTg on boosting the restructuring and renovation of State enterprises), including:

a/ Working laborers, for whom, when being restructured, the enterprises cannot find jobs though every measure has been taken to create jobs.

b/ Laborers who are on the enterprises payrolls but have no work to do and, by the time of restructuring, the enterprises still cannot arrange jobs for them.

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Chapter II

POLICIES FOR REDUNDANT LABORERS

Article 3.- For redundant laborers performing labor contracts with indefinite terms:

1. If they are aged between full 55 years and under 60 years, for men, and between full 50 years and under 55 years, for women, and have paid the social insurance premiums for full 20 years or more, they shall:

a/ Be entitled to retire without having their pension percentage cut due to the pre-mature retirement.

b/ Be entitled to the two following allowances:

- An allowance equal to 3 months rank or position salaries and salary allowances they are enjoying, for each year (12 months) of pre-mature retirement;

- An allowance equal to 5 months rank or position salaries and salary allowances they are enjoying, for the first 20 working years for which they have paid the social insurance premiums. From the 21st year on, for each working year with social insurance premium payment, they shall enjoy an allowance equal to half of their current monthly rank or position salaries and salary allowances.

2. If they reach the retiring age as prescribed by the Labor Code but still have to pay the social insurance premiums for 1 more year at most, their social insurance premiums for the remaining months shall be paid in lump sum by the State at the level equal to 15% of their monthly salaries so that they can enjoy the monthly pension regime.

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a/ The job-loss allowance, which shall be calculated according to the actual number of years they worked in the State sector and for each of these years they shall enjoy an allowance equal to their one month’s current rank or position salaries and salary allowances, but their job-loss allowances must be equal to at least two months salaries and salary allowances they are enjoying.

b/ The two following additional allowances:

- An allowance equal to one month’s rank or position salaries and salary allowances they are enjoying, for each of the years they actually worked in the State sector.

- A lump-sum allowance of VND 5 million.

c/ Six months rank or position salaries and salary allowances for seeking new jobs.

In cases where the laborers aspire to learn new jobs, in addition to the above-mentioned job-seeking allowance, they shall be trained for at most 6 months at the job-teaching establishments prescribed by the State. The State shall allocate funds for these job-teaching establishments to train redundant laborers.

d/ Laborers, who will reach the retiring ages in 5 years at most as prescribed by the Labor Code and have paid the social insurance premiums for full 15 years or more but not yet received the lump-sum social insurance allowance shall, beside the regimes prescribed at Points a and b of this Clause, be entitled to further pay the social insurance premiums by themselves at the level equal to 15% of their pre-retirement monthly wages to the social insurance agencies at their residential places till they reach the retiring ages in order to enjoy the retirement and death allowance regimes. In cases where they are not eligible for further paying the social insurance premiums as mentioned above, their social insurance premium-payment durations shall be reserved and they shall be granted the social insurance books or enjoy the lump-sum allowance according to current regulations.

Article 4.- Redundant laborers performing labor contracts with terms ranging between 1 and 3 years shall terminate their labor contracts and enjoy the following regimes:

1. The job-loss allowance, which shall be calculated according to the actual number of years they worked in the State sector, with one month’s rank or position salaries and salary allowances they are enjoying for each year.

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3. Laborers, who will reach their retiring ages in 5 years at most as prescribed by the Labor Code and have paid the social insurance premiums for full 15 years or more but not yet received the lump-sum social insurance allowance shall, beside the regimes prescribed at Clauses 1 and 2 of this Article, be entitled to further pay the social insurance premiums by themselves at the level equal to 15% of their pre-retirement monthly salaries to the social insurance agencies at their residential places till they reach the retiring ages in order to enjoy the retirement and death allowance regimes. In cases where they are not eligible for further paying the social insurance premiums as mentioned above, their social insurance premium-payment durations shall be reserved and they shall be granted the social insurance books or enjoy the lump-sum allowance according to current regulations.

Article 5.- Laborers who have received the allowances prescribed in Article 3 of this Decree, if being recruited once again by the enterprises which have asked them to leave their jobs or by other State enterprises, shall have to refund the allowance amounts prescribed at Point b, Clause 3, Article 3 of this Decree. The labor-recruiting enterprises shall have to retrieve the above-mentioned money amounts from the laborers and remit the whole sums into the support fund for redundant laborers of the restructured State enterprises, which is set up according to Article 7 of this Decree.

Article 6.- In addition to the policies prescribed in Articles 3 and 4 of this Decree, redundant laborers shall be given conditions to borrow capital from the National Fund for Job Settlement to employ themselves and be recommended to new jobs according to the provisions of law.

Chapter III

FUNDING FOR THE SETTLEMENT OF REDUNDANT LABOR

Article 7.- Support fund for laborers redundant due to the restructuring of State enterprises

1. To set up the "support fund for laborers redundant due to the restructuring of State enterprises" (hereinafter called the redundant labor- support fund) to support laborers who lose their jobs or pre-maturely retire due to the restructuring of State enterprises under the provisions of this Decree.

2. The redundant labor-support fund shall have to provide funding for enterprises; social insurance agencies; establishments teaching jobs to redundant laborers and organizations set up to settle redundant labor in the dissolved and bankrupt enterprises.

3. The redundant labor-support fund shall be managed and administered by the Finance Minister.

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a/ The State budget;

b/ The aids from organizations and individuals;

c/ Other sources.

Article 8.- Responsibilities to make payments to laborers under the prescribed regimes

1. Enterprises shall be responsible for settling the job-loss allowance regime according to the provisions at Point a, Clause 3 of Article 3; and Clause 1, Article 4 of this Decree.

Enterprises actually meeting with financial difficulties, which, after using up their job-loss allowance reserve fund (if any), still lack sources for payment of the job-loss allowances to redundant laborers, shall get support from the redundant labor-support fund.

2. Laborers shall further pay the social insurance premiums by themselves as prescribed at Point d, Clause 3 of Article 3 and Clause 3, Article 4 of this Decree.

3. The social insurance fund shall be responsible for settling the social insurance regime according to the provisions of the Labor Code.

4. The redundant labor-support fund shall be responsible for making payments under the regimes prescribed at Point b, Clause 1 and Points b and c, Clause 3, Article 3; Clause 2 of Article 4, and allocations for social insurance premium payment prescribed in Clause 2, Article 3 of this Decree.

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Chapter IV

ORGANIZATION OF IMPLEMENTATION

Article 9.- Responsibilities of enterprises

1. To work out the labor-rearrangement plans, determine the number of laborers required for production and business, the number of redundant laborers and allowance money amount for each of them.

2. To coordinate with trade union organizations at enterprises in propagating and disseminating the Party’s and State’s undertakings, policies and regimes, implementing the regulation on democracy in enterprises; publicizing the labor-rearrangement plans and lists of redundant laborers.

3. To settle policies and regimes for laborers according to the provisions of this Decree; and settle funds for allowance payment to laborers under the current regulations.

4. To issue the Regulation on labor recruitment and settle the regimes for redundant laborers already recruited by enterprises other than subjects of application of this Decree, with the enterprises funding sources.

Article 10.- Responsibilities of the State management agencies

1. The Ministry of Labor, War Invalids and Social Affairs:

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- To join the agencies involved in labor rearrangement in working out plans for renovation and raising of operation efficiency of enterprises;

- To stipulate the job-teaching establishments which receive and train redundant laborers;

- To periodically sum up and report the situation of implementation of this Decree to the Prime Minister.

2. The Finance Ministry:

- To issue the regulation on management and use of the redundant labor-support fund; the use of this fund must be strictly controlled in order to avoid appropriation; To specifically and clearly define contents of the dossiers and criteria for enjoyment of allowances in an open and democratic manner.

- To elaborate plans on capital sources and submit to the Prime Minister measures to ensure capital sources for the redundant labor-support fund;

- To monitor and inspect the payment of allowances and settlement of funds for allowance payment to redundant laborers.

- To periodically sum up and report the management and use of the redundant labor-support fund to the Prime Minister.

3. Vietnam Social Insurance:

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- To settle social insurance policies and regimes for laborers according to the provisions of this Decree and the guidance of the Ministry of Labor, War Invalids and Social Affairs.

4. The ministries, the ministerial-level agencies, the agencies attached to the Government, the People’s Committees of the provinces and centrally-run cities and the Managing Boards of Corporations 91:

- To direct enterprises under their respective management to work out the labor-rearrangement plans and implement policies and regimes towards redundant laborers;

- To approve the plans for handling redundant labor according to one-time principle, which shall apply to each of the enterprises prescribed in Article 1 of this Decree.

- To set up organizations to settle policies for redundant laborers at the dissolved and bankrupt enterprises;

- To periodically report to the Government, through the Ministry of Labor, War Invalids and Social Affairs, on the settlement of policies for redundant laborers.

Article 11.- Vietnam Labor Confederation is requested to:

1. Join the State agencies in guiding the implementation of policies towards redundant laborers.

2. Direct the trade unions at all levels to coordinate with the heads of the units in propagating and explaining to laborers the Party’s and State’s undertakings and policies so as to implement all regimes towards redundant laborers according to law provisions.

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Article 12.- This Decree takes effect 15 days after its signing till the end of December 31, 2005.

Article 13.- The ministers, the heads of the ministerial-level agencies, the heads of the agencies attached to the Government and the presidents of the People’s Committees of the provinces and centrally-run cities shall have to implement this Decree.

ON BEHALF OF THE GOVERNMENT
PRIME MINISTER




Phan Van Khai