Circular No. 11/1998/TT-LDTBXH guiding policies for employees when state-owned enterprises are converted into joint-stock companies pursuant to Decree No. 44/1998/NĐ-CP dated June 29, 1998 of the Government.

Article 1. These guidelines apply to employees working at state-owned enterprises and parts of such enterprises that are separated out for shareholding according to the provisions of Decree No. 44/1998/NĐ-CP dated June 29, 1998 of the Government on converting state-owned enterprises into joint-stock companies.

Article 2. Employees working at the enterprise are those listed on the payroll and social insurance rolls of the enterprise at the time of shareholding conversion, including: employees working under indefinite-term labor contracts; employees working under fixed-term labor contracts; employees working under temporary labor contracts for specific tasks with a duration of less than one year (including those temporarily suspended from performing their labor contracts and waiting for work assignments according to the decision of the enterprise's Director).

Article 3. Poor employees entitled to preferential treatment as stipulated in Clause 2, Article 14 of Decree No. 44/1998/NĐ-CP of the Government are those whose average income per person in their household is lower than the national minimum wage announced by the Government at the time of shareholding conversion (currently 144,000 VND/month). The enterprise's Director shall coordinate with the Party Committee, Trade Union, and Shareholding Reform Board at the enterprise to determine the number of poor employees within the enterprise.

Average income per person in the household is calculated based on the following sources of income: salary, bonuses, allowances included in the salary for salaried workers; primary income from labor of family members working in other economic sectors (excluding any other source of income), divided by the number of people in the household (spouse, children, and persons directly responsible for support).

Article 4. Time worked for the State refers to the period during which employees have worked for state-owned enterprises and units under the public sector. Calculation of time worked is regulated in Clause 3, Article 10 of Decree No. 198/CP dated December 31, 1994 of the Government detailing and guiding certain provisions of the Labor Code regarding labor contracts.

Article 5. In addition to the policies stipulated in these guidelines, employees also enjoy benefits from welfare funds, awards, and other financial incentives as provided in Clause 5, Article 13, Clauses 1 and 2, Article 14 of Decree No. 44/1998/NĐ-CP dated June 29, 1998 of the Government and guidance from the Ministry of Finance.

I. POLICIES FOR EMPLOYEES IN THE ENTERPRISE PRIOR TO SHAREHOLDING CONVERSION.

When formulating the shareholding conversion plan, the Shareholding Reform Board at the enterprise shall cooperate with the enterprise's Director to establish a plan concerning labor and policy resolution for employees in the enterprise, to be submitted to the competent authority for approval. The plan shall be established according to the following contents:

1. Establish a list of current employees at the time of the shareholding conversion decision, specifically as follows:

a. A list of the total number of employees at the time of shareholding conversion.

b. A projected list of employees who meet age and health conditions requiring vocational training and will continue working at the joint-stock company later.

c. A list of employees eligible for retirement under the pension system.

d. A list of employees currently on leave under three social insurance schemes (illness; maternity; work-related accidents, occupational diseases).

đ. A list of employees terminating their labor contracts at the time of shareholding conversion (including those voluntarily terminating their labor contracts according to Article 6 of Decree No. 44/1998/NĐ-CP dated June 29, 1998 of the Government) to resolve their entitlements according to Point 2.b, Section I, Part B of this Circular.

e. Number of employees transferring to work at the joint-stock company, including:

Employees whose labor contracts still have remaining terms.

Employees on leave under three social insurance schemes whose labor contracts still have remaining terms.

Employees currently on temporary suspension of labor contract performance.

2. Resolving rights and interests for employees:

a. For employees (according to Point 1.c, Section I, Part B) eligible for social insurance benefits (pension, maternity, work-related accidents, occupational diseases; illness; death benefits), the enterprise's Director and the social insurance agency where the enterprise pays social insurance (hereinafter referred to as the social insurance agency) shall resolve their rights and interests according to current regulations.

b. For cases of termination of employment according to Point 1.đ, Section I, Part B, the enterprise's Director shall complete all procedures for the social insurance agency to resolve social insurance benefits for employees according to current regulations.

The enterprise's Director shall resolve severance pay according to Article 42 of the Labor Code and Decree No. 198/CP dated December 31, 1994 of the Government detailing and guiding certain provisions of the Labor Code regarding labor contracts.

c. For employees transferring to work at the joint-stock company according to Point 1.e, Section I, Part B, the enterprise's Director shall be responsible for compiling a list and completing procedures for the social insurance agency to continue implementing social insurance benefits and issuing social insurance books (if not yet issued) according to regulations, and transferring the list and files of employees managed by the enterprise to the Board of Directors or Director of the joint-stock company.

d. The enterprise shall be responsible for settling debts related to social insurance to the social insurance agency according to the law.

đ. The enterprise's Director and employees shall settle debts before transferring to the joint-stock company.

II. POLICIES FOR EMPLOYEES WHEN THE ENTERPRISE HAS BEEN CONVERTED INTO A JOINT-STOCK COMPANY.

II. POLICY TOWARDS EMPLOYEES WHEN A BUSINESS HAS BEEN CONVERTED INTO A JOINT STOCK COMPANY.

1. When a business makes a decision to convert into a joint-stock company, the Board of Directors or General Director of the joint-stock company shall be responsible for:

a. Receiving and taking over the number of workers specified in point 1.e section I part B and the list of proposed vocational training as stipulated in point 1.b section I part B of this Circular.

b. Continuing to implement the commitments in labor contracts and collective labor agreements that were signed previously until their expiration or negotiating to change or supplement the contents of labor contracts and collective labor agreements or signing new labor contracts and collective labor agreements.

c. Continuing to implement social insurance benefits as prescribed in the Social Insurance Regulations issued together with Decree No. 12/CP dated January 26, 1995 of the Government and Circular No. 06/LDTBXH-TT dated April 4, 1995 of the Ministry of Labor, War Invalids and Social Affairs.

On the basis of the joint-stock company and workers continuing to pay social insurance according to the law, the company will continue to be authorized by the social insurance agency to implement three types of social insurance (illness; maternity; work injury, occupational disease) for the subjects specified in point 1.d section I part B who still have valid labor contracts.

d. For newly recruited workers by the joint-stock company, the provisions of the current labor laws shall apply.

2. In cases where unemployment occurs within twelve months from the date when the state-owned enterprise converts into a joint-stock company as provided for in Clause 3 Article 14 of Decree No. 44/1998/NĐ-CP dated June 29, 1998 of the Government, unemployment assistance and termination benefits shall be handled as follows: a. Workers shall be paid unemployment assistance due to changes in production technology according to Clause 1 Article 17 of the Labor Code and Articles 23, 24, 25, and 26 of Decree No. 72/CP dated October 31, 1995 of the Government for the time worked at the joint-stock company and shall be paid by the joint-stock company.

b. As for the period during which the worker had worked previously in the state sector but had not received termination benefits or unemployment assistance, that period shall be counted towards receiving termination benefits according to the current regulations. The source of payment, procedures for settlement and finalization of the termination benefit shall follow the guidance of the Ministry of Finance.

3. Regarding vocational training:

a. Based on the list of proposed vocational training as stipulated in point 1.b section I part B of this Circular and the production and business conditions, the joint-stock company shall decide to send workers for training or retraining at vocational schools.

b. During the vocational training period, the joint-stock company shall continue to pay wages to workers at the level agreed upon by both parties, but it shall not be less than seventy percent of the wage stipulated in the signed labor contract. If seventy percent of the wage stipulated in the contract is lower than the general minimum wage announced by the Government, then the wage shall be paid at the general minimum wage (currently 144,000 VND/month).

c. The joint-stock company shall continue to pay social insurance for workers during the vocational training period according to the current regulations.

d. Procedures for apprenticeship contracts shall be carried out according to the provisions of Chapter IV of Decree No. 90/CP dated December 15, 1995 of the Government detailing and guiding certain articles of the Labor Code regarding apprenticeship.

đ. After the vocational training period, the joint-stock company shall be responsible for arranging employment for workers.

e. Vocational training costs, procedures for issuance, settlement, and finalization shall follow the guidance of the Ministry of Finance.

1. The privatization board at the business shall be responsible for notifying the Department of Labor, War Invalids and Social Affairs, the Trade Union Federation of the province or centrally administered city where the business headquarters is located; the industry trade union; and the social insurance agency where the business pays social insurance about the conversion of the state-owned enterprise into a joint-stock company to coordinate in examining and resolving workers' rights.

2. The business director shall instruct functional departments to complete all necessary procedures and documents and resolve workers' rights.

3. For the three positions of Director, Deputy Director, and Chief Accountant of the business, if they do not continue to hold these positions in the joint-stock company, the competent authority that appointed these positions shall be responsible for resolving employment and all rights for them according to the State's regulations.

4. The joint-stock company shall be responsible for accepting the number of workers, files, labor contracts, and collective labor agreements transferred by the state-owned enterprise, fully implementing the rights and obligations committed in labor contracts and collective labor agreements and the provisions of the law.

5. The social insurance agency where the business pays social insurance shall be responsible for implementing social insurance policies for workers before and after the privatization of the business according to the State's regulations.

6. The Department of Labor, War Invalids and Social Affairs shall cooperate with the provincial or centrally administered city Trade Union Federation where the business headquarters is located and the industry trade union to monitor and inspect the resolution of workers' rights.

This Circular takes effect fifteen days from the date of signature.

Abolish Circular No. 17/LDTBXH-TT dated September 7, 1996 of the Ministry of Labor, War Invalids and Social Affairs guiding policies for workers when converting state-owned enterprises into joint-stock companies according to Decree No. 28/CP dated May 7, 1996 of the Government.

During implementation, if there are difficulties, please report to the Ministry of Labor, War Invalids and Social Affairs for research and resolution./.