Circular No. 17/LDTBXH-TT guiding policies for employees when state-owned enterprises are converted into joint-stock companies pursuant to Government Decree No. 28/CP dated May 7, 1996.

CIRCULAR

Guidelines on policies for employees when state-owned enterprises are converted into joint-stock companies pursuant to Decree No. 28/CP dated May 7, 1996 of the Government

Implementing Decree No. 28/CP dated May 7, 1996 of the Government on converting certain state-owned enterprises into joint-stock companies;

After exchanging opinions with the central steering committee for shareholding reform and relevant ministries and sectors, the Ministry of Labor, Invalids and Social Affairs provides guidelines on policies for employees working at state-owned enterprises decided to be reformed into joint-stock companies according to Decree No. 28/CP dated May 7, 1996 of the Government, specifically as follows:

I. LABOR AND POLICIES FOR EMPLOYEES IN THE ENTERPRISE PRIOR TO SHAREHOLDING REFORM

When implementing the plan for shareholding reform, the reform board at the enterprise shall coordinate with the enterprise director to develop a labor plan and resolve employee policies in the enterprise, to be submitted to the competent authority for approval. The plan shall be developed according to the following contents:

1. Compile a list of current employees in the enterprise.

The enterprise director shall compile a list of current employees in the enterprise at the time of the decision to implement shareholding reform (including employees working under fixed-term labor contracts from one to three years; seasonal labor contracts or for a specific job with a term less than one year).

2. Classify the number of employees listed above into the following groups:

a- Employees subject to social insurance policy, including:

- Employees eligible for retirement benefits,

- Employees currently on leave due to sickness, maternity, work-related accidents, or occupational diseases.

b- Employees whose labor contracts will terminate at the time of shareholding reform;

c- Employees who will continue working at the joint-stock company, including:

- Employees still within the term of their labor contracts,

- Employees currently on leave due to sickness, maternity, or work-related accidents but still within the term of their labor contracts,

- Employees temporarily suspended from performing their labor contracts.

3. Resolving rights and interests for employees:

a- For employees entitled to social insurance benefits (as per point 2.a, Section I), the enterprise director and the social insurance agency where the enterprise pays social insurance shall resolve the rights and interests of employees according to the Social Insurance Regulations issued together with Decree No. 12/CP dated January 26, 1995 of the Government and Circular No. 6/LDTBXH-TT dated April 4, 1995 of the Ministry of Labor, Invalids and Social Affairs.

b- For cases of termination of employment as per point 2.b, Section I, the enterprise director shall complete all necessary procedures for the social insurance agency where the enterprise pays social insurance to resolve social insurance benefits and issue social insurance books according to 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, Invalids and Social Affairs.

- The enterprise 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 some provisions of the Labor Code regarding labor contracts.

- In cases where a fixed-term labor contract from one to three years expires at the time of shareholding reform and the employee wishes to continue working while the enterprise has a need, a new labor contract shall be signed according to Chapter IV of the Labor Code and Decree No. 198/CP dated December 31, 1994 of the Government detailing and guiding some provisions of the Labor Code regarding labor contracts.

c- For employees who will continue working at the joint-stock company as per point 2.c, Section I, the enterprise director shall be responsible for completing procedures for the social insurance agency to issue social insurance books according to regulations and transferring the list and files of employees managed by the enterprise to the Board of Directors or General Director of the joint-stock company.

d- Employees falling under the provisions of point 1, Section I of this Circular shall enjoy benefits from welfare funds and financial matters according to Clause 5, Article 10 and Clause 1, Article 11 of Decree No. 28/CP dated May 7, 1996 of the Government and guidance from the Ministry of Finance.

đ- The enterprise shall be responsible for settling debts related to social insurance (including the portion that employees must contribute) to the social insurance agency where the enterprise pays social insurance according to the law.

e- The enterprise director and employees shall settle debts before transferring to the joint-stock company (excluding debts arising from loans taken to purchase shares as stipulated in point b, Clause 1, Article 11 of Decree No. 28/CP dated May 7, 1996 of the Government).

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

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

a- Accepting the transfer of employees as stipulated in point 2.c, Section I;

b- On the basis of continuing to pay social insurance contributions according to the law, the company shall continue to be authorized by the social insurance agency to implement the three social insurance benefits for employees specified in point 2.a, Section I who are still within the term of their labor contracts;

c- Continuing to fulfill commitments in labor contracts and collective labor agreements previously signed until their expiration or negotiating to amend, supplement the content of labor contracts and collective labor agreements or signing new labor contracts and collective labor agreements;

d- Continuing to implement social insurance benefits according to 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, Invalids and Social Affairs;

đ- For newly recruited employees, the company shall follow general legal provisions.

2. In cases where unemployment occurs twelve months after the state-owned enterprise converts into a joint-stock company as stipulated in Clause 2, Article 11 of Decree No. 28/CP dated May 7, 1996 of the Government, it shall be resolved as follows:

Workers are entitled to receive unemployment benefits due to technological restructuring as stipulated in 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 period during which workers have worked in the state sector but have not yet received unemployment benefits or severance pay, that period shall be counted for the purpose of receiving 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 on labor contracts.

In cases where workers have worked at enterprises falling under the scope defined in Clause 3, Article 9 of Decree No. 28/CP of the Government, the joint-stock company shall notify the old enterprise (the enterprise from which a part was separated for joint-stock conversion) to transfer the severance payment to the joint-stock company to pay to the workers; if workers have worked at enterprises falling under the scope defined in Clause 1, Article 9 of Decree No. 28/CP, the joint-stock company shall pay the workers; if workers have worked at enterprises falling under the scope defined in Clause 2, Article 9 of Decree No. 28/CP, the State budget shall cover the payment (for enterprises established by Ministries, the central budget shall cover the payment, for enterprises established by provinces or centrally-administered cities, the local budget shall cover the payment).

III. IMPLEMENTATION

1. The Joint-Stock Conversion Board at the enterprise has the responsibility to notify the Department of Labor, Invalids and Social Affairs, the Trade Union of the province or centrally-administered city where the enterprise's headquarters is located, the industry trade union, and the social insurance agency where the enterprise pays social insurance about the conversion of the enterprise into a joint-stock company to coordinate in examining and resolving the rights of workers.

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 enterprise when transferring to the joint-stock company, if they do not continue to hold these positions in the joint-stock company, the competent authority appointing these three positions shall be responsible for arranging employment and benefits for them according to the regulations of the State.

4. The joint-stock company has the responsibility to accept workers, files, labor contracts, collective labor agreements handed over by state-owned enterprises, fully implement the rights and obligations already agreed upon in labor contracts, collective labor agreements, and other legal provisions.

5. The social insurance agency where the enterprise pays social insurance has the responsibility to implement social insurance policies for workers before and after the joint-stock conversion of the enterprise according to the regulations of the State.

6. The Department of Labor, Invalids and Social Affairs shall cooperate with the Trade Union of the province or centrally-administered city where the enterprise's headquarters is located, and the industry trade union to monitor and inspect the resolution of worker rights.

This Circular takes effect from the date of signature.

Repeal Circular No. 09/LDTBXH - TT dated July 22, 1992 of the Ministry of Labor, Invalids and Social Affairs guiding labor and policy towards workers in the pilot conversion of some state-owned enterprises into joint-stock companies pursuant to Decision No. 202/CT dated June 8, 1992 of the Chairman of the Council of Ministers.

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