Circular No. 18/2007/TT-BLDTBXH guiding the implementation of certain provisions of the Government's Decree No. 110/2007/NĐ-CP dated June 26, 2007 on policies for redundant workers due to the restructuring of state-owned enterprises.

CIRCULAR

Guidelines for Implementing Certain Provisions of Decree No. 110/2007/NĐ-CP dated June 26, 2007 of the Government on Policies for Redundant Workers Resulting from the Restructuring of State-Owned Enterprises

_________________________

To implement Decree No. 110/2007/NĐ-CP dated June 26, 2007 of the Government on Policies for Redundant Workers Resulting from the Restructuring of State-Owned Enterprises (hereinafter referred to as Decree No. 110/2007/NĐ-CP), following the opinions of relevant ministries and agencies and the Vietnam General Confederation of Labor, the Ministry of Labor, Invalids and Social Affairs provides guidance as follows:

I. GENERAL PROVISIONS

1. The scope of regulation includes state-owned enterprises (including those under political organizations and political-social organizations); state-owned farms and forestry enterprises undergoing restructuring in accordance with Article 1 of Decree No. 110/2007/NĐ-CP, specifically as follows:

a) State-owned enterprises implementing ownership conversion, including: - Independent state-owned enterprises; parent companies of economic groups (hereinafter referred to as groups), state-owned corporations (including state-owned commercial banks); parent companies in combined parent-child company structures; independent accounting units belonging to state-owned corporations decided by the State to invest in and establish; dependent accounting units of independent state-owned enterprises, groups, state-owned corporations, parent companies, and independent accounting units of state-owned corporations undergoing shareholding reform; (State-owned corporations decided by the State to invest in and establish, state-owned corporations under groups hereinafter referred to as state-owned corporations) - Independent state-owned enterprises; independent accounting units belonging to state-owned corporations; independent accounting units belonging to groups being transferred to worker collectives; - Independent state-owned enterprises; independent accounting units belonging to state-owned corporations; independent accounting units belonging to groups; dependent accounting units of state-owned corporations; dependent accounting units of independent accounting units of state-owned corporations; dependent accounting units of independent accounting units of state-owned corporations being sold;

b) Independent state-owned enterprises; parent companies of groups; parent companies in combined parent-child company structures; independent accounting units belonging to state-owned corporations; independent accounting units belonging to groups; dependent accounting units of state-owned corporations (to be

c) Independent state-owned enterprises; independent accounting units belonging to state-owned corporations; independent accounting units belonging to groups undergoing bankruptcy or dissolution;

d) Independent state-owned farms; state-owned farms under state-owned enterprises undergoing restructuring in accordance with Decree No. 170/2004/NĐ-CP dated September 22, 2004 of the Government on the Restructuring, Reform, and Development of State-Owned Farms;

đ) Independent state-owned forestry enterprises; state-owned forestry enterprises under state-owned enterprises undergoing restructuring in accordance with Decree No. 200/2004/NĐ-CP dated December 3, 2004 of the Government on the Restructuring, Reform, and Development of State-Owned Forestry Enterprises; (Independent state-owned enterprises; dependent accounting units of state-owned enterprises; independent accounting units, dependent accounting units of independent accounting units belonging to state-owned corporations under state-owned corporations; state-owned corporations, independent accounting units belonging to groups hereinafter referred to collectively as enterprises; State-owned farms, state-owned forestry enterprises hereinafter referred to collectively as units).

2. State-owned farms and forestry enterprises under state-owned enterprises specified in points d and đ of Clause 1, Section I of this Circular, when undergoing restructuring, shall prepare separate plans included within the restructuring plan of the state-owned enterprise.

3. The decision-making time for implementing restructuring and conversion of enterprises and units is the time when the competent authority issues the decision to implement the restructuring and conversion form (shareholding reform, transfer, sale, dissolution, bankruptcy, conversion into a limited liability company...). The decision-making time for implementing restructuring and conversion of enterprises and units mentioned above must be carried out within the period from August 1, 2007 to June 30, 2010.

4. The time for finalizing the list of workers to resolve redundant labor at the enterprises and units specified in Clause 1, Section I of this Circular is specifically defined as follows:

a) For enterprises and units undergoing shareholding reform, the time for finalizing the list of workers is the time when the competent authority announces the enterprise's value;

b) For enterprises and units being transferred to worker collectives, the time for finalizing the list of workers is the time when the competent authority issues the decision to transfer the enterprise or unit to the worker collective;

c) For enterprises and units being sold where the buyer assumes the obligations towards the workers, the time for finalizing the list of workers is the time recorded in the enterprise or unit purchase contract;

d) For enterprises and units being sold where the buyer does not assume the obligations towards the workers, the time for finalizing the list of workers is the time when the competent authority issues the decision approving the enterprise sale plan;

đ) For enterprises and units being converted into limited liability companies, the time for finalizing the list of workers is the time when the competent authority issues the decision to convert the enterprise or unit into a limited liability company;

e) For enterprises and units undergoing dissolution, the time for finalizing the list of workers is the time when the competent authority decides to dissolve the enterprise or unit;

g) For enterprises undergoing bankruptcy (if the owner representative has taken all measures but cannot restore the ability to operate and has committed in writing not to apply further measures to restore the operation of the enterprise), the time for finalizing the list of workers is the time when the decision to initiate bankruptcy proceedings becomes effective.

5. The approval time for the restructuring and conversion plan of enterprises and units is the time when the competent authority issues the decision to approve the restructuring and conversion plan of the enterprise or unit (converting a state-owned enterprise into a joint-stock company, deciding to dissolve, initiating bankruptcy proceedings, converting a state-owned enterprise into a limited liability company...).

6. The competent authority to approve the plan for resolving surplus labour is the authority that decides on establishment, restructuring, merger, consolidation; decides on conversion and diversification of ownership and management for companies and units as stipulated under current regulations or the agency designated.

7. Surplus workers who enter into indefinite-term labour contracts as provided for in Clause 1, Article 2 of Decree No. 110/2007/NĐ-CP include those hired to work at companies and units before August 30, 1990 (the date of issuance of the Labour Contract Ordinance) but have not yet signed written labour contracts by the time the decision to reorganize and convert the company or unit is made.

8. Workers listed in the regular roster of companies and units as provided for in Point b, Clause 1, Article 2 of Decree No. 110/2007/NĐ-CP are workers hired to work under indefinite-term labour contracts but whose contracts have not been terminated by the time the decision to reorganize and convert the company or unit is made.

9. The period during which workers are entitled to unemployment benefits as stipulated in Clause 4, Article 3 and Article 4 of Decree No. 110/2007/NĐ-CP is the total actual working time in the state sector (excluding periods when workers received unemployment benefits, resigned, or enjoyed military discharge benefits), calculated from the date the worker was hired by the company or unit as specified in Clause 1, Section I of this Circular until the date of the retirement decision. In cases where workers have actually worked at other state agencies or enterprises but transferred to the company or unit specified in Clause 1, Section I of this Circular before January 1, 1995 (the effective date of the Labour Code) and continued working until the reorganization and conversion decision, such time shall be added to the aforementioned period for calculating unemployment benefits.

10. Actual working time in the state sector is calculated based on full years (12 months) during each phase of salary coefficient adjustment and minimum wage level, with remaining months in the previous phase carried forward to the next phase. For the final phase, if there are remaining months, they will be calculated according to the following principles: + Less than one month is not counted; + From one month to less than seven months is counted as six months of actual work; + From seven months to less than twelve months is counted as one year of actual work.

11. Actual working time in the state sector includes:

a) Time workers actually worked at state-owned companies; administrative state agencies, public service units, units under armed forces receiving salaries from the state budget;

b) Time spent on training, internship...leave, etc.), time off enjoying social insurance benefits (illness leave; maternity leave...; work injury leave, occupational disease leave), receiving salaries from state-owned companies, state budget (time spent on production, work injury, occupational disease);

c) Time working under piece-rate or volume-based remuneration systems where the company or unit pays salaries and contributes to social insurance for workers as prescribed by law.

II. POLICIES FOR SURPLUS WORKERS

1. Policies for surplus workers currently implementing indefinite-term labour contracts as stipulated in Article 3 of Decree No. 110/2007/NĐ-CP are specifically as follows:

a) Male workers aged 55 or older and female workers aged 50 or older with at least 20 years of social insurance contributions are entitled to pension benefits as provided for in Clause 1, Article 50 of the Social Insurance Law (without deduction of pension percentage due to early retirement).

b) Surplus workers meeting the conditions for retirement as specified in point a, Clause 1 of this section, aged between 55 and under 60 for males, and between 50 and under 55 for females, are additionally entitled to the following allowances:

b.1) An allowance of three months' average salary and salary supplements (if any) of the last five years before retirement for each year (full 12 months, excluding fractional months) retired early.

b.2) An allowance of five months' average salary and salary supplements (if any) of the last five years before retirement for the first twenty years of work with social insurance contributions.

b.3) Starting from the twenty-first year, for each year of work with social insurance contributions, an allowance of half a month's average salary and salary supplements (if any) of the last five years before retirement is granted. If the number of years of work has fractional months, more than six months is counted as one year, and six months or less is not counted.

The period for calculating additional allowances as stipulated in sub-item b.2 and sub-item b.3 of point b, Clause 1 of this section is based on the period of social insurance contributions (including working time in the state sector considered as having contributed to social insurance) as prescribed by law and calculated up to the date recorded in the retirement decision (retirement date).

The supplements included are: position supplements, regional supplements (if any).

Example 1: Mr. Nguyen Van A, a mechanical electric repairman at a mine, at the time of retirement (September 1, 2007), was 57 years and 4 months old; his social insurance contribution period was 32 years and 7 months; the salary progression of Mr. A over the last five years is as follows:

- From September 1, 2002 to December 31, 2002 (4 months), minimum wage: 210,000 VND/month, salary coefficient: 2.49 (Grade 5, Group III, Table A.1 issued together with Decree No. 26/CP dated May 23, 1993 of the Government);

- From January 1, 2003 to September 30, 2004 (21 months), minimum wage: 290,000 VND/month, salary coefficient: 2.49;

- From October 1, 2004 to September 30, 2005 (12 months), minimum wage: 290,000 VND/month, salary coefficient: 3.45 (Grade 5, Group III, Industry Group VI, Table A.1 issued together with Decree No. 205/2004/NĐ-CP dated December 14, 2004 of the Government);

- From October 1, 2005 to November 30, 2005 (2 months), minimum wage: 350,000 VND/month, salary coefficient: 3.45;

- From December 1, 2005 to September 30, 2006 (10 months), the minimum wage was 350,000 VND/month, salary coefficient: 4.07 (level 6, group III, industry VI, table A.1 issued together with Decree No. 205/2004/NĐ-CP dated December 14, 2004 of the Government);

- From October 1, 2006 to September 1, 2007 (11 months), the minimum wage was 450,000 VND/month, salary coefficient: 4.07.

 The average monthly salary for the last five years before retirement to serve as the basis for calculating the allowance is: [(2.49 x 210,000 VND x 4 months) + (2.49 x 290,000 VND x 21 months) + (3.45 x 290,000 VND x 12 months) + (3.45 x 350,000 VND x 2 months) + (4.07 x 350,000 VND x 10 months) + (4.07 x 450,000 VND x 11 months)] / 60 months = 1,101,000 VND/month. 

Mr. A is entitled to the following benefits:

- The pension regime stipulated in Clause 1 Article 50 of the Social Insurance Law, with the monthly pension level specified in Clause 1 Article 52 of the Social Insurance Law.

- Allowance for retiring early, specifically as follows:

+ Number of months entitled to receive the allowance:

+ The amount Mr. A will receive is: 1,101,000 VND x 17.5 months = 19,267,500 VND 

Example 2: Ms. Tran Thi B, a worker in herbal oil processing, at the time of retirement was 54 years and 5 months old; had 27 years and 3 months of social insurance contributions; the average monthly salary for the last five years before retirement to serve as the basis for calculating the allowance is: 1,160,650 VND/month. Ms. B is entitled to the following benefits:

- The pension regime stipulated in Clause 1 Article 50 of the Social Insurance Law, with the monthly pension level specified in Clause 1 Article 52 of the Social Insurance Law.

- Allowance for retiring early, specifically as follows:

+ Number of months entitled to receive the allowance:

+ The amount Ms. B will receive is: 1,160,650 VND x 8.5 months = 9,865,525 VND

c) For male workers aged 60 and female workers aged 55 but still lacking up to six months of social insurance contributions to meet the conditions for receiving a pension, the State will contribute once for the remaining months instead of the employee and employer by the social insurance contribution rate applicable before retirement (from August 1, 2007 to December 31, 2009, the contribution rate is 16%, from January 1, 2010 to June 30, 2010, the contribution rate is 18%) into the pension and death benefit fund to settle the pension benefits according to current regulations.

Example 3: Mr. Hoang Van C, a worker in bee product processing, at the time of retirement (September 1, 2007) was 60 years old; had 19 years and 7 months of social insurance contributions; the salary coefficient at the time of retirement was: 3.00 (level 5, group I, table A.2 food processing wages issued together with Decree No. 205/2004/NĐ-CP dated December 14, 2004 of the Government); the minimum wage was 450,000 VND/month. Mr. C will have the State contribute social insurance once for the remaining five months with a 16% contribution rate based on the monthly salary used for social insurance contributions and proceed to settle the retirement benefits according to current regulations.

- Monthly salary used for social insurance contributions at the time of retirement:

450,000 VND x 3.00 = 1,350,000 VND 

+ One-time social insurance contribution for the remaining months: (1,350,000 VND x 16%) x 5 months = 1,080,000 VND

+ Mr. C is entitled to the pension regime stipulated in Clause 1 Article 50 of the Social Insurance Law, with the monthly pension level specified in Clause 1 Article 52 of the Social Insurance Law.

d) Workers who are surplus and not within the scope defined in points a, b, and c of Clause 1 of this section shall terminate their labor contracts and enjoy the following benefits:

d.1) An allowance equivalent to one month's salary and any allowances (if any), divided according to the stages of adjustment of the salary coefficient and the minimum wage for each full year (12 months) actually worked in the public sector, but not less than two months' salary and any allowances (if any).

d.2) Additional support of one month's salary and any allowances (if any), divided according to the stages of adjustment of the salary coefficient and the minimum wage for each full year (12 months) actually worked in the public sector.

d.3) Enjoy six months' salary and any allowances (if any) currently received to seek employment. If there is a need for vocational training, they can receive free training for up to six months. The training institution will be announced by the Department of Labor, Invalids, and Social Affairs.

In addition to the benefits stipulated in items d.1, d.2, and d.3 of point d of Clause 1 of this section, workers are also entitled to social insurance benefits according to current regulations.

Example 4: Mr. Than Van D, a station staff member, at the time of retirement (September 1, 2007) was 52 years old; had 28 years and 3 months of actual work in the public sector; the average salary coefficient of the six consecutive months immediately preceding September 30, 2004 was: 2.30 (level 4, group II, table B.13 railway workers and officials issued together with Decree No. 26/CP dated May 23, 1993 of the Government), the average salary coefficient of the six consecutive months immediately preceding the date of retirement and the salary coefficient at the time of retirement was: 2.99 (level 4, group II, table B.10 railway workers and officials issued together with Decree No. 205/2004/NĐ-CP dated December 14, 2004 of the Government). Mr. D is entitled to the following allowances:

+ Two months' salary (one month's salary for the actual work period in the public sector and an additional one month's salary allowance) for each year of actual work in the public sector, during the period from June 1, 1979 to September 1, 2007, including:

- From June 1, 1979 to December 31, 2002 is 23 years and 7 months, rounded up to 23 years:

23 years x 210,000 VND x 2.30 x 2 months = 22,218,000 VND (1)

- From January 1, 2003 to September 30, 2004 is 1 year and 9 months, including 7 months carried forward from the previous period, totaling 2 years and 4 months, rounded up to 2 years:

2 years x 290,000 VND x 2.30 x 2 months = 2,668,000 VND (2)

- From October 1, 2004 to September 30, 2005 is one year, including four months carried over from the previous period totaling one year and four months, rounded up to one year:

1 year x 290,000 VND x 2.99 x 2 months = 1,734,200 VND (3)

- From October 1, 2005 to September 30, 2006 is one year, including four months carried over from the previous period totaling one year and four months, rounded up to one year:

1 year x 350,000 VND x 2.99 x 2 months = 2,093,000 VND (4)

- From October 1, 2006 to September 1, 2007 is eleven months, including four months carried over from the previous period totaling one year and three months, rounded up to one and a half years:

1.5 years x 450,000 VND x 2.99 x 2 months = 4,036,500 VND (5)

- The total amount received is (1+2+3+4+5): = 32,749,700 VND (I)

+ Six months of salary for seeking employment:

450,000 VND x 2.99 x 6 months = 8,073,000 VND (II)

The total amount Mr. D receives is (I+II): = 40,822,700 VND

Example 5: Mr. Pham Van E, a construction worker, was recruited into the state sector on October 1, 1976; at the time of retirement (September 1, 2007), he was 54 years old; his actual working time in the state sector was 30 years and 11 months; the average salary coefficient of the six consecutive months immediately preceding September 30, 2004, was 3.73 (level 7, group III wage scale, A.6 construction issued together with Decree No. 26/CP dated May 23, 1993 of the Government); the average salary coefficient of the six consecutive months immediately preceding the date of retirement and the salary coefficient at the time of retirement was 4.9 (level 7, group III wage scale, A.1 construction; building materials, ceramics, glassware issued together with Decree No. 205/2004/NĐ-CP dated December 14, 2004 of the Government). Mr. E has received severance pay for 19 years of actual work. Therefore, Mr. E is entitled to the following benefits:

Actual working time eligible for severance pay:

30 years 11 months - 19 years = 11 years 11 months

+ Two months' salary (one month's salary for actual working time in the state sector and an additional one month's salary) for each year of actual working time in the state sector, during the period from October 1, 1995 to June 1, 2007, including:

- From October 1, 1995 to December 31, 2002 is seven years and three months, rounded up to seven years:

7 years x 210,000 VND x 3.73 x 2 months = 10,966,200 VND (1)

- From January 1, 2003 to September 30, 2004 is one year and nine months, including three months carried over from the previous period totaling two years:

2 years x 290,000 VND x 3.73 x 2 months = 4,326,800 VND (2)

- From October 1, 2004 to September 30, 2005 is one year:

1 year x 290,000 VND x 4.9 x 2 months = 2,842,000 VND (3)

- From October 1, 2005 to September 30, 2006 is one year:

1 year x 350,000 VND x 4.9 x 2 months = 3,430,000 VND (4)

- From October 1, 2006 to September 1, 2007 is eleven months, rounded up to one year:

1 year x 450,000 VND x 4.9 x 2 months = 4,410,000 VND (5)

- The total amount received is: (1+2+3+4+5): = 25,975,000 VND (I)

+ Six months of salary for seeking employment:

450,000 VND x 4.9 x 6 months = 13,230,000 VND

(II) The total amount Mr. E receives is (I+II): = 39,205,000 VND

2. Policy for surplus workers implementing fixed-term labor contracts from twelve to thirty-six months as stipulated in Article 4 of Decree No. 110/2007/NĐ-CP is specified as follows:

a) Severance pay of one month's salary and allowances (if any) divided according to the stages of adjustment of the salary coefficient and the minimum wage for each full year (twelve months) of actual work in the state sector.

b) Severance pay of seventy percent of the salary and allowances (if any) recorded in the labor contract for the remaining months not yet completed under the labor contract, but not exceeding twelve months in total.

Example 6: Mr. Bui Van G, a ventilation equipment operator, entered into a fixed-term labor contract for thirty-six months, and at the time of retirement had only worked twenty-six months (November 1, 2007), leaving ten months unfulfilled under the labor contract; the salary recorded in the labor contract is 1,890,000 VND/month (4.20 x 450,000 VND/month). Mr. G's work history is as follows:

- On April 1, 1978, he was recruited into Company X and worked until June 15, 1996;

- On September 1, 1996, he was recruited into Company Y (current company) and continuously signed three fixed-term labor contracts for thirty-six months (from September 1, 1996 to August 31, 1999, the salary recorded in the contract was 3.07 times the minimum wage set by the Government; from September 1, 1999 to August 31, 2002, the salary recorded in the contract was 3.07 times the minimum wage set by the Government; from September 1, 2002 to August 31, 2005, the salary recorded in the contract was 3.07 times the minimum wage set by the Government; on October 5, 2004, Mr. G and Company Y amended the labor contract, thereby increasing the salary from October 1, 2004 to 4.20 times the minimum wage set by the Government);

- On September 1, 2005, he continued to sign a fixed-term labor contract for thirty-six months with Company Y; the salary recorded in the labor contract was 4.20 times the minimum wage set by the Government; Mr. G is entitled to the following benefits:

+ Severance pay of one month's salary for the period from September 1, 1996 to September 1, 2007, including:

- From September 1, 1996 to December 31, 2002 is six years and four months, rounded up to six years:

6 years x 210,000 VND x 3.07 = 3,868,200 VND (1)

- From January 1, 2003 to September 30, 2004 is one year and nine months, including four months carried over from the previous period totaling two years and one month, rounded up to two years:

2 years x 290,000 VND x 3.07 = 1,780,600 VND (2)

- From October 1, 2004 to September 30, 2005 is one year, including one month carried over from the previous period totaling one year and one month, rounded up to one year:

1 year x 290,000 VND x 4.20 = 1,218,000 VND (3)

- From October 1, 2005 to September 30, 2006 is one year, including one month carried over from the previous period totaling one year and one month, rounded up to one year:

1 year x 350,000 VND x 4.20 = 1,470,000 VND (4)

- From October 1, 2006 to November 1, 2007 is one year and one month, including one month carried over from the previous period totaling one year and two months, rounded up to one and a half years:

1.5 years x 450,000 VND x 4.20 = 2,835,000 VND (5)

The amount received is (1+2+3+4+5): = 11,171,800 VND (I)

+ Unemployment allowance at 70% of salary and allowances (if any) recorded in the labor contract for the remaining months not yet completed under the labor contract concluded is:

1. 890,000 VND x 70% x 10 months = 13,230,000 VND (II)

The total amount Mr. G received is (I+II): = 24,401,800 VND

3. Workers who have received unemployment benefits as stipulated in Clause 4, Article 3 of Decree No. 110/2007/ND-CP, if re-employed by the company or unit that previously terminated their employment or other companies or agencies under the state sector or granted land or forest by a farm or forestry enterprise, must return the unemployment benefit according to Article 5 of Decree No. 110/2007/ND-CP, specifically as follows:

a) Workers who are surplus and re-employed by the company or unit that previously terminated their employment (which has been converted to operate under the Enterprise Law 2005) shall submit the original decision on retirement with benefits for surplus workers due to restructuring of state-owned enterprises to the company or unit and the entire amount of unemployment benefits received according to Clause 4, Article 3 of Decree No. 110/2007/ND-CP.

When workers return the aforementioned benefit, the actual working time already settled for surplus workers according to Decree No. 110/2007/ND-CP will be added to the actual working time at the company or unit (converted to operate under the Enterprise Law 2005) to calculate the severance pay and unemployment benefits in the future.

b) Surplus workers re-employed by another company or unit under the state sector including state-owned enterprises, joint-stock companies with 100% state capital, joint-stock companies with two or more members with 100% state capital, state-run farms, state-run forestry enterprises, agencies receiving salaries from the state budget (or granted land or forest by state-run farms or forestry enterprises) shall submit a copy of the decision on retirement with benefits for surplus workers due to restructuring of state-owned enterprises and the additional support amount according to Point b, Clause 4, Article 3 of Decree No. 110/2007/ND-CP to the company, unit, or agency.

When workers return the aforementioned benefit, the actual working time already settled for surplus workers according to Decree No. 110/2007/ND-CP will not be added to the actual working time at another company or unit under the state sector to calculate the severance pay and unemployment benefits in the future.

c) Companies, units, and agencies responsible for collecting the unemployment benefits that workers must return upon re-employment shall follow the guidance of the Ministry of Finance.

III. SOURCE OF FUNDS FOR PAYMENT

The source of funds for paying the benefits for surplus workers, funds for paying social insurance agencies, and funds allocated to vocational training institutions shall be implemented according to Article 7 of Decree No. 110/2007/ND-CP and the guidance of the Ministry of Finance.

IV. IMPLEMENTATION

1. Responsibilities of the company and unit: The company and unit implementing workforce restructuring and settling benefits for surplus workers as stipulated in Article 9 of Decree No. 110/2007/ND-CP shall proceed as follows:

a) Organize propaganda on the policies of the Party and State regarding continued restructuring, reform, development, and improving the efficiency of state-owned enterprises and policies for surplus workers due to restructuring of state-owned enterprises so that workers understand these policies.

b) Develop a plan to resolve surplus labor.

After the competent authority approves the restructuring and conversion plan of the company or unit, the company or unit shall develop a plan to resolve surplus labor as follows:

Step 1. Compile a complete list of all employees of the company or unit at the time of the decision to restructure and convert the company or unit (Model 1, Model 1b for farms and forestry enterprises issued together with this Circular), including:

- Employees currently working and receiving salary and social insurance contributions or not contributing to social insurance (including seasonal or specific job employees with a term less than one year).

- Employees who have retired but are still listed in the company's or unit's records, receiving salary or not, contributing to social insurance or not.

Step 2. Compile a list of employees needed (Model 2 issued together with this Circular) and a list of employees not needed (Model 3 issued together with this Circular) as follows:

- For companies and units undergoing shareholding transformation from August 1, 2007 to June 30, 2010, the number of employees needed is based on the approved shareholding transformation plan; the remaining employees are those not needed.

- For companies and units implementing transfer to worker collectives, the number of employees needed is the current number of employees minus those voluntarily terminating their labor contracts and confirmed by the Trade Union Committee of the company or unit or the Temporary Trade Union Committee or, if there is no Temporary Trade Union Committee, by the representative elected by the Workers' Congress; the remaining employees are those not needed.

- For companies and units undergoing sale, the number of employees needed is specified in the sale agreement between both parties; the remaining employees are those not needed.

- For companies and units converting to limited liability companies, the number of employees needed is determined based on the production and business plan, production technology, machinery and equipment, and labor standards aimed at profitable development, approved by the competent authority; the remaining employees are those not needed; 

- For companies and units implementing dissolution or bankruptcy, all employees listed in the company's recruitment roster prior to April 26, 2002 shall be subject to policies as stipulated in Decree No. 110/2007/NĐ-CP. Employees recruited on or after April 26, 2002 shall have their benefits determined according to the Labor Code.

The number of employees without employment needs identified at Step 2 above shall be categorized into two types: Employees recruited before April 21, 1998 are considered surplus labor and shall be subject to benefits as stipulated in Decree No. 110/2007/NĐ-CP; employees recruited from April 21, 1998 onwards shall be subject to benefits according to the Labor Code.

Step 3. The company or unit shall cooperate with the Trade Union Executive Committee to organize a Workers' and Staff Congress or a Workers' and Staff Representative Congress to provide opinions on the employee list (from Form No. 1 to Form No. 3 issued together with this Circular).

Step 4. Based on the opinions of the Workers' and Staff Congress or the Workers' and Staff Representative Congress, the company or unit shall finalize the list of employees (as prescribed in Clause 4, Section I of this Circular) for resolving surplus labor.

Step 5. Complete the plan for resolving surplus labor to submit to the competent authority specified in Clause 6, Section I of this Circular for approval. The submission file shall consist of six copies, each including:

- A request for approval of the plan for resolving surplus labor (Form No. 4 issued together with this Circular);

- A plan for reorganizing labor (Form No. 5, Form 5b for forestry and farm enterprises issued together with this Circular);

- A list of classified employees (from Form No. 1 to Form No. 3 issued together with this Circular).

For companies and units undergoing dissolution or bankruptcy that do not need to approve plans for restructuring or converting the company or unit but only need to approve plans for resolving surplus labor (Form No. 1, Form No. 3 issued together with this Circular).

c) Resolve termination benefits for surplus employees and prepare a budget for payment expenses.

Within fifteen working days from the date the competent authority approves the plan for resolving surplus labor, the company or unit shall implement policies for employees as follows:

c. 1) Issue decisions terminating employment for each surplus employee according to the policy groups stipulated in Decree No. 110/2007/NĐ-CP and unify the time point according to Form No. 6 issued together with this Circular; The decision shall be made in at least three copies: one copy sent to the employee, one copy retained by the company or unit, and one copy sent to the social insurance agency.

c. 2) Prepare a budget for paying benefits to surplus employees according to the policy groups (Form No. 7, Form No. 8, Form No. 9, Form No. 10 issued together with this Circular).

c. 3) Prepare a proposal for approving the plan to use funds to support surplus employees according to the regulations of the Ministry of Finance.

c. 4) For employees without employment needs who do not fall under the provisions of Decree No. 110/2007/NĐ-CP (Form No. 11 attached to this Circular), the company or unit shall prepare a separate list to resolve benefits according to the Labor Code (Articles 31, 17, 42 of the Labor Code).

d) Resolve benefits for employees.

- Responsibilities of the company or unit.

+ Based on the Termination Decision, fully and timely pay all stipulated allowances to surplus employees;

+ Provide free vocational training certificates to employees (Form No. 12 issued together with this Circular);

+ Fully complete the necessary procedures for social insurance benefits according to the law, along with a list of employees retiring according to Form No. 7, Form No. 8 issued together with this Circular, and transfer it to the social insurance agency;

+ Clearly record the reasons for termination and the benefits resolved in the employee records and return all documents to the employee according to the law;

+ Within seven working days from the date of receiving surplus employee support funds from various sources as stipulated in Article 7 of Decree No. 110/2007/NĐ-CP, the company or unit shall directly pay the approved allowances to the employees in one lump sum at the company or unit.

In cases where employees cannot personally collect the allowances, they may authorize another person to collect them according to the Civil Code.

If an employee dies after the effective date of the termination decision (the implementation date) and has not collected the benefits, the company or unit shall transfer the amount to the administrator of the deceased's estate according to the Civil Code.

- Responsibilities of employees when enjoying policies:

+ Sign to receive all allowance payments;

+ Sign to receive all termination documents;

+ Settle any outstanding debts owed to the company or unit (if any).

đ) At the latest within thirty working days from the completion of resolving benefits for surplus employees, the company or unit shall report the results to the competent authorities. The report shall include: evaluation of strengths and weaknesses, results of payments (according to the regulations of the Ministry of Finance), and shall be prepared in six copies and submitted to: the authority approving the plan for resolving surplus labor, the Ministry of Finance, the Ministry of Labor, Invalids and Social Affairs, the Vietnam Social Security, the Department of Labor, Invalids and Social Affairs of the province or centrally-administered city where the company or unit's headquarters is located, and retained by the company or unit.

2. Responsibilities of employees when learning a trade and vocational training institutions:

a) Surplus employees who wish to learn a trade and have been provided with a free vocational training certificate shall submit their application to the vocational training institution notified by the Department of Labor, Invalids and Social Affairs. The deadline for submitting the application is within twelve months from the date of the termination decision.

b) Vocational training institutions shall be responsible for accepting applications from surplus employees wishing to learn a trade, which shall include:

- Original free vocational training certificate;

- Copy of the termination decision granting benefits to surplus employees due to state enterprise reorganization.

After receiving the file, the vocational training institution confirms "agreement to accept training," signs and stamps on the back of the original decision to take leave, and returns it to the worker.

The vocational training institution is granted a maximum funding amount of six (6) months to provide free vocational training for surplus workers who wish to learn a trade. The tuition fee for training, procedures, and financial disbursement and settlement shall be carried out in accordance with the guidelines of the Ministry of Finance.

3. The Department of Labor, Invalids, and Social Affairs of the province or centrally administered city shall be responsible for:

a) Urging and inspecting the implementation of policies for surplus workers within their jurisdiction at the request of the provincial or centrally administered city People's Committee;

b) Designating vocational training institutions and compiling a list of such institutions (including the name of the vocational training institution, specific address, contact phone number, etc.). Each province or centrally administered city may designate a maximum of ten vocational training institutions and announce them through mass media.

4. The Vietnam Social Security shall be responsible for directing, guiding, and inspecting the implementation of social insurance policies for surplus workers according to this Circular and current regulations.

5. Responsibilities of Ministries; agencies equivalent to ministries; provincial People's Committees; political organizations; political-social organizations; boards of directors of state-owned economic groups, and state-owned corporations are as follows:

a) Organizing propaganda on the Party and State’s policies regarding continued restructuring, reform, development, and improving the efficiency of state-owned enterprises, particularly policies concerning surplus workers;

b) Approving plans to resolve surplus labor due to the reorganization of companies and units (including calculation forms for subsidies for surplus workers as set forth in Forms 7, 8, 9, and 10 issued together with this Circular) in accordance with approved company and unit reorganization and conversion plans; reviewing proposed support funding plans from companies and units (in accordance with the guidelines of the Ministry of Finance);

Within fifteen working days from the date of receipt of the plan to resolve surplus labor from the company or unit, the competent authority shall approve and send the decision along with six copies of the file to the company or unit. In cases where approval cannot be made, the competent authority shall guide the company or unit to modify and supplement the plan.

c) Directing specialized agencies to guide subordinate units under their management to develop plans and inspect the implementation of policies for surplus workers in accordance with this Circular;

d) Organizing mid-term and final evaluations to assess the results of resolving surplus labor;

đ) Reporting periodically every six months to the Ministry of Labor, Invalids, and Social Affairs, and simultaneously sending reports to the Ministry of Finance on the situation of labor restructuring and resolution of surplus labor: Evaluating strengths and weaknesses, implementation results (according to Form 13 issued together with this Circular), proposing solutions to unresolved issues during the implementation process, with the latest reporting deadline being July 15th each year and an annual report on January 15th of the following year for consolidation and reporting to the Government.

V. IMPLEMENTATION PROVISIONS

1. This Circular shall take effect fifteen days after its publication in the Official Gazette.

2. State-owned companies; national forestry and farm enterprises whose plans to resolve surplus labor were approved by the competent authority between January 1, 2007, and before August 1, 2007, shall implement in accordance with Circular No. 19/2004/TT-BLDTBXH dated November 22, 2004, issued by the Ministry of Labor, Invalids, and Social Affairs, guiding the implementation of certain provisions of Decree No. 41/2002/NĐ-CP dated April 11, 2002, of the Government on policies for surplus labor due to the reorganization of state-owned enterprises, which has been amended and supplemented by Decree No. 155/2004/NĐ-CP dated August 10, 2004, of the Government; and Circular No. 18/2005/TT-BLDTBXH dated May 11, 2005, issued by the Ministry of Labor, Invalids, and Social Affairs, amending and supplementing certain provisions of Circular No. 19/2004/TT-BLDTBXH dated November 22, 2004, of the Ministry of Labor, Invalids, and Social Affairs.

For surplus workers implementing retirement benefits, the age requirement shall be implemented in accordance with the aforementioned Circulars, but the worker must have contributed to social insurance for at least twenty years.

3. For workers with a decision from the employer regarding retirement benefits for surplus labor due to the reorganization of state-owned enterprises before January 1, 2007, and whose companies or units have completed the necessary procedures at the social insurance agency from January 1, 2007, shall continue to implement social insurance policies for surplus workers as stipulated in Circulars No. 19/2004/TT-BLDTBXH dated November 22, 2004, and No. 18/2005/TT-BLDTBXH dated May 11, 2005, of the Ministry of Labor, Invalids, and Social Affairs.

Workers who retired under Decree No. 41/2002/NĐ-CP dated April 11, 2002, of the Government before January 1, 2007, who have contributed to social insurance for at least fifteen years, are still short of up to five years to reach the retirement age, and are currently self-paying monthly contributions to the social insurance organization at their place of residence, shall pay a monthly contribution rate of 16% from January 1, 2007, to December 31, 2009, and 18% from January 1, 2010, to December 31, 2011, based on their pre-retirement monthly salary until they reach sixty years old for men and fifty-five years old for women to receive retirement benefits.

4. Workers who have received assistance payments as stipulated in Clause 3, Article 3 of Decree No. 41/2002/NĐ-CP dated April 11, 2002 of the Government, amended and supplemented by Decree No. 155/2004/NĐ-CP dated August 10, 2004 of the Government, if re-employed by the company or unit where they previously worked or employed by another state-owned company or unit, or assigned land or forest by a farm or forestry station, must return the amount of assistance received according to the regulations. The procedures shall be carried out in accordance with the guidelines of the Ministry of Finance. Any difficulties encountered during implementation should be reported to the Ministry of Labor, Invalids, and Social Affairs for study and resolution.

Any difficulties encountered during implementation should be reported to the Ministry of Labor, Invalids, and Social Affairs for study and resolution./.