Circular No. 19/2004/TT-BLDTBXH on guiding the implementation of certain provisions of Decree No. 41/2002/NĐ-CP dated April 11, 2002, on policies for surplus labor due to restructuring state-owned enterprises, amended and supplemented by Decree No. 155/2004/NĐ-CP dated August 10, 2004, of the Government.

CIRCULAR

Regarding guiding the implementation of certain provisions of Decree No. 41/2002/NĐ-CP dated April 11, 2002 on policies for redundant labor due to restructuring state-owned enterprises, which has been amended and supplemented by Decree No. 155/2004/NĐ-CP dated August 10, 2004 of the Government

Implementing Decree No. 41/2002/NĐ-CP dated April 11, 2002 of the Government on policies for redundant labor due to restructuring state-owned enterprises, which has been amended and supplemented by Decree No. 155/2004/NĐ-CP dated August 10, 2004 of the Government (hereinafter referred to as Decree No. 41/2002/NĐ-CP as amended and supplemented), after receiving opinions from relevant ministries, sectors, and the Vietnam General Confederation of Labor, the Ministry of Labor - Invalids and Social Affairs guides as follows:

I. SCOPE AND APPLICABLE SUBJECTS

1. The scope of application includes state-owned companies as defined in Article 1 of Decree No. 41/2002/NĐ-CP as amended and supplemented, including:

a. State-owned companies implementing restructuring according to Article 17 of the Labor Code, comprising:

- State-owned companies, independent accounting subsidiaries under state-owned corporations decided by the State to invest and establish (state-owned corporations decided by the State to invest and establish hereinafter referred to as state-owned corporations) approved by the Prime Minister in the overall plan for restructuring and modernizing state-owned enterprises of ministries, sectors, provinces, centrally-administered cities, and state-owned corporations;

- Units under state-owned corporations implementing restructuring approved by competent state authorities;

- Joint-stock companies converted through shareholding from state-owned companies, dependent accounting units of state-owned companies, independent accounting subsidiaries of state-owned companies, and dependent accounting units of independent accounting subsidiaries of state-owned companies under state-owned corporations, with restructuring plans approved by the Board of Directors of the company and confirmed by competent state authorities within twelve months from the date of issuance of the business registration certificate according to the Law on Enterprises (hereinafter referred to as joint-stock companies within twelve months);

b. State-owned companies implementing restructuring through ownership transfer, comprising:

- State-owned companies, dependent accounting units of state-owned companies, independent accounting subsidiaries of state-owned companies, and dependent accounting units of independent accounting subsidiaries of state-owned companies under state-owned corporations converted into joint-stock companies;

- State-owned companies, independent accounting subsidiaries of state-owned companies under state-owned corporations transferred to collectives of workers;

- State-owned companies, independent accounting subsidiaries of state-owned companies under state-owned corporations sold off;

c. State-owned companies implementing restructuring through organizational restructuring, comprising:

- State-owned companies, independent accounting subsidiaries of state-owned companies under state-owned corporations merged, consolidated, divided, or split;

- State-owned companies, independent accounting subsidiaries of state-owned companies under state-owned corporations converted into state-owned limited liability companies with one member or state-owned limited liability companies with two or more members;

- State-owned companies, independent accounting subsidiaries of state-owned companies under state-owned corporations implementing business contracting or leasing;

d. State-owned companies, independent accounting subsidiaries of state-owned companies under state-owned corporations declared bankrupt or dissolved;

đ. State-owned companies; independent accounting subsidiaries of state-owned companies under state-owned corporations converted into public service units;

e. Subsidiary companies held entirely by state-owned companies operating under the parent-subsidiary model under state-owned corporations implementing restructuring according to the provisions of paragraphs a, b, d, and đ mentioned in point 1 above;

f. State-owned farms and forestry farms restructured according to Resolution No. 28/NQ-TW dated June 16, 2003 of the Politburo on continuing to restructure, modernize, and develop state-owned farms and forestry farms;

g. State-owned companies implementing other forms decided by the Prime Minister;

h. State-owned companies under political organizations and political-social organizations established by the People's Committee Chairmen of provinces and centrally-administered cities, or by the Ministers managing economic and technical industries of the main business sectors, converted into state-owned limited liability companies with one member or state-owned limited liability companies with two or more members, or converted into joint-stock companies operating under the Law on Enterprises.

(State-owned companies, dependent accounting units of state-owned companies, independent accounting subsidiaries of state-owned companies, and dependent accounting units of independent accounting subsidiaries of state-owned companies under state-owned corporations hereinafter collectively referred to as companies).

(Companies, public service units under state-owned corporations, state-owned farms, and state-owned forestry farms hereinafter collectively referred to as units).

2. Units implementing restructuring measures as specified in point 1 above shall have their restructuring plans for labor approved or confirmed by competent state authorities during the period from April 26, 2002 (the effective date of Decree No. 41/2002/NĐ-CP) to December 31, 2005.

For units that are dissolved or declared bankrupt, the effective date of the decision to dissolve or declare bankruptcy by the competent state authority shall be taken into account but must fall within the period from April 26, 2002 to December 31, 2005.

For public service units under state-owned corporations; state-owned farms and forestry farms, the application period starts from the effective date of Decree No. 155/2004/NĐ-CP dated August 10, 2004 of the Government (September 6, 2004) to December 31, 2005.

3. Competent state authorities approving restructuring plans for units are those authorities deciding establishment, organization, merger, consolidation; transferring and diversifying ownership and management, implemented according to current regulations. For units that are dissolved or declared bankrupt, there is no need to approve restructuring plans but rather rely on the dissolution or bankruptcy declaration decisions of competent authorities.

Specifically, for joint-stock companies converted from companies with an operating period not exceeding twelve months from the date of issuance of the business registration certificate under the Enterprise Law, the Board of Directors of the joint-stock company shall decide on the restructuring plan according to the Company's Charter and obtain confirmation from the competent state agency issuing the decision to convert the company into a joint-stock company. In cases where the company is converted into a joint-stock company pursuant to a decision of the Prime Minister, the confirming authority shall be the Ministry or sector for companies under central management; the People's Committee of the province or centrally-administered city for companies under local management; and the Board of Directors of Total Corporation 91 for companies under the management of Total Corporation.

4. Redundant workers who have entered into indefinite-term labor contracts as stipulated in Clause 1, Article 2 of Decree No. 41/2002/ND-CP, which has been amended and supplemented, include those redundant workers recruited to work at units before August 30, 1990 (the effective date of the Labor Contract Ordinance), but who had not yet signed written labor contracts until the time of reorganization.

5. Workers whose names are included in the regular list of units as specified in Point b, Clause 1, Article 2 of Decree No. 41/2002/ND-CP, which has been amended and supplemented, are workers recruited to work under indefinite-term or definite-term labor contracts of at least twelve months but not more than thirty-six months, such that at the time of reorganization, the worker and the employer had not terminated the labor contract in accordance with labor laws.

6. The recruitment date for workers as provided in Clause 1, Article 2 of Decree No. 41/2002/ND-CP, which has been amended and supplemented, is specifically defined as follows:

- For workers continuously working in agencies and units, the recruitment date is calculated from the day they began working in the public sector.

- In cases where workers have periods without working in agencies or units, the recruitment date is calculated as the last recruitment date when they worked continuously in an agency or unit.

Example: Ms. Nguyen Thi A has the following work history:

- Stage 1: On June 20, 1976, she was recruited to work (for the first time) in a state-owned company and worked continuously until June 20, 1992.

- Stage 2: On July 1, 1992, she was recruited to work in a foreign-invested enterprise and worked continuously until September 15, 1995.

- Stage 3: On October 25, 1995, she was recruited to work in a state-owned company and worked continuously until the company implemented restructuring and issued a decision to terminate her employment.

Therefore, Ms. Nguyen Thi A's recruitment date into the public sector is calculated as the last recruitment date, which is October 25, 1995.

7. For workers or officials, civil servants, and employees at public service units under Total Corporations subject to the provisions of Decree No. 41/2002/ND-CP, which has been amended and supplemented, when implementing restructuring measures, if their recruitment date into the public sector is prior to April 21, 1998, officials, civil servants, and employees in public service units under Total Corporations shall enjoy benefits equivalent to workers currently renewing indefinite-term labor contracts.

In cases where surplus leaders appointed by authorized agencies are subject to Resolution No. 09/2003/NQ-CP dated July 28, 2003 of the Government amending and supplementing Resolution No. 16/2000/NQ-CP dated October 18, 2000 of the Government regarding reduction of staff in administrative agencies and public service units.

8. For workers implementing land and forest transfer from state-owned agricultural and forestry enterprises, if they terminate their labor contracts, they will be resolved according to the provisions of Article 42 of the Labor Code and related guiding documents established according to Model No. 10b attached to this Circular.

Wages shall be implemented according to the provisions of Decree No. 114/2002/ND-CP dated December 31, 2002 of the Government detailing and guiding the implementation of certain articles of the Labor Code concerning wages.

The period of work for calculating severance pay shall be implemented according to the provisions of Decree No. 44/2003/ND-CP dated May 9, 2003 of the Government detailing and guiding the implementation of certain articles of the Labor Code concerning labor contracts.

II. POLICY FOR REDUNDANT WORKERS

1. Policy for redundant workers currently performing indefinite-term labor contracts as stipulated in Article 3 of Decree No. 41/2002/ND-CP, which has been amended and supplemented, is now specified as follows:

a. Male workers aged 55 to under 60 years old and female workers aged 50 to under 55 years old, with at least twenty years of social insurance contributions, are eligible for retirement without having to deduct a percentage of their pension due to early retirement according to the Social Insurance Regulations, in addition to receiving the following additional allowances:

a1. An allowance of three months' salary grade, position, and wage supplements (if applicable) for each year (full twelve months) of early retirement. For partial years, the allowance is calculated as follows:

+ If less than six months, one month's salary grade, position, and wage supplements (if applicable) is granted;

+ If more than six months but less than twelve months, two months' salary grade, position, and wage supplements (if applicable) is granted.

a2. An allowance of five months' salary grade, position, and wage supplements (if applicable) for the first twenty years of work with social insurance contributions.

a3. From the twenty-first year onwards, for each year of work with social insurance contributions, half a month's salary grade, position, and wage supplements (if applicable) is granted. For partial years, if more than six months, it counts as one year; if six months or less, it does not count.

The period for calculating additional allowances as stipulated in a2 and a3 of this paragraph is based on the time of social insurance contributions (including time worked in the public sector considered as social insurance contributions) according to the law and calculated up to the date of the retirement decision.

Wages and allowances stipulated in Decree No. 41/2002/NĐ-CP, as amended and supplemented, refer to rank and position wages and allowance as prescribed in Decree No. 26/CP dated May 23, 1993 of the Government on the temporary wage system for enterprises, and Decree No. 25/CP dated May 23, 1993 of the Government on the temporary wage system for civil servants, administrative staff, and armed forces personnel.

In cases where employees have not yet been reclassified according to their wages, such reclassification shall be carried out in accordance with the provisions of the aforementioned decrees.

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

For joint-stock companies within twelve months, wages and allowances (if any) shall be calculated at the time the company receives its business registration certificate under the Enterprise Law.

The minimum wage serving as the basis for calculating benefits for the subjects specified in paragraph 1 of this section is the minimum wage set by the Government (currently 290,000 VND/month).

Example 1: Mr. Nguyen Van A, an automobile repair worker, at the time of his retirement decision, was 56 years and 4 months old; he had 25 years and 8 months of social insurance contributions; his current salary coefficient is 2.84 (rank 6, group II wage level, belonging to scale A.1 mechanical, electrical, electronics - IT); regional allowance 0.5; minimum wage 290,000 VND/month. Mr. A will enjoy the following benefits:

+ The retirement pension ratio is calculated as follows:

- For the first 15 years, it is calculated at 45%;

- From the 16th year to the 26th year, which is 11 years (25 years and 8 months are counted as 26 years according to Decree No. 01/2003/NĐ-CP dated January 9, 2003).

(11 years x 2% = 22%);

- The retirement pension percentage is: 45% + 22% = 67%.

+ Retirement benefit due to early retirement:

- Monthly rank and salary allowance:

290,000 VND x (2.84 + 0.5) = 968,600 VND

- Number of months of benefit entitlement:

Early retirement by 3 years and 8 months:

(3 years x 3 months/year + 2 months) = 11 months

With 20 years of work and social insurance contributions = 5 months

From the 21st year onwards with social insurance contributions = 3 months

(5 years and 8 months counted as 6 years x 1/2)

Total 19 months

- Amount of benefit received: 18,403,400 VND

(968,600 VND/month x 19 months)

b. Workers who have reached the retirement age as stipulated in the Labor Code but lack the required period of social insurance contributions, shall make a one-time payment for the remaining months at 15% of the monthly wage at the time of reaching retirement age, and then proceed with retirement benefits according to the current regulations, including the following cases:

b1. Men aged 60, women aged 55, with 14 to less than 15 years of social insurance contributions.

Example 2: Mr. Nguyen Van B, a product delivery worker, at the time of retirement was 60 years old; he had 14 years of social insurance contributions; his current salary coefficient is 2.73 (rank 6, group I wage level, scale A.15 food processing); minimum wage 210,000 VND/month. Mr. B will be supported by the State to pay social insurance contributions for 12 months at 15% of the monthly wage used as the basis for monthly social insurance contributions and will process retirement benefits according to current regulations.

+ Monthly wage used as the basis for social insurance contributions:

210,000 VND x 2.73 = 573,300 VND

+ One-time social insurance contribution:

(573,300 VND x 15%) x 12 months = 1,031,940 VND.

+ The retirement pension ratio is 45% (with 15 years of social insurance contributions).

b.2. Men aged 55, women aged 50, with 15 years of work in heavy, hazardous jobs or 15 years working in areas with regional coefficients of 0.7 or higher, or 10 years of actual service in battlefields B, C before April 30, 1975, or battlefield K before August 31, 1989, with 19 to less than 20 years of social insurance contributions.

Example 3: Mr. Nguyen Van C, a kitchen worker, at the time of retirement was 55 years old; he had 19 years and 6 months of social insurance contributions; his current salary coefficient is 2.07 (rank 5, group II wage level, scale A.20 catering); minimum wage 210,000 VND/month. Mr. C will be supported by the State to pay social insurance contributions for 6 months at 15% of the monthly wage used as the basis for monthly social insurance contributions and will process retirement benefits according to current regulations.

- Monthly wage used as the basis for social insurance contributions:

210,000 VND x 2.07 = 434,700 VND

- One-time social insurance contribution:

(434,700 VND x 15%) x 6 months = 391,230 VND

- The retirement pension ratio is calculated as follows:

For the first 15 years, it is calculated at 45%

From the 16th year to the 20th year, an additional 10% is added

(5 years, each year 2%; 5 years x 2%)

The retirement pension ratio is 55% (45% + 10%).

b3. Men aged 50, women aged 45, with 19 to less than 20 years of social insurance contributions and a reduced ability to work of 61% or more.

b4. Workers (regardless of age) with at least 15 years of work in particularly arduous or particularly hazardous jobs, with 19 to less than 20 years of social insurance contributions and a reduced ability to work of 61% or more.

c. Workers who are surplus and do not fall under the categories specified in paragraphs a and b of point 1 above, shall terminate their labor contracts and enjoy the following benefits:

c1. Unemployment assistance is calculated based on the actual time worked in the public sector, with one month's rank and position salary, allowance (if any) being paid for every year (12 months), but the lowest amount is two months' salary and allowance.

c2. An additional one month's rank and position salary, allowance (if any) is provided for every year (12 months) of actual work in the public sector, and a one-time lump sum of five million VND is also provided.

Actual time worked in the public sector includes:

Time actually worked at state-owned enterprises; administrative agencies, public institutions, units under the armed forces receiving salaries from the state budget (hereinafter referred to as the public sector);

Any time during which salaries were received from state-owned enterprises, the state budget, or social insurance benefits (training, work, sick leave, maternity leave...);

For joint-stock companies operating for 12 months, the actual working time in the state sector is calculated up to the date of issuance of the business registration certificate under the Enterprise Law.

The period eligible for unemployment benefit is the total actual working time in the state sector accumulated from the first day of employment until the date of the decision to terminate employment. From the total actual working time in the state sector, the time during which the employee has already received unemployment benefits, severance pay, or discharge benefits must be deducted.

If the actual working time in the state sector includes a fractional month, it is defined as follows:

+ Less than one month is not counted;

+ From one full month to less than seven months is counted as six months of actual work;

+ From seven full months to less than twelve months is counted as one year of actual work.

c3. One-time job-seeking allowance is six months' salary at the current rank, position, and wage supplements (if applicable). If there is a need for vocational training, free training for a maximum of six months is provided. The training institution is designated by the Department of Labor, Invalids, and Social Affairs.

In addition to the benefits stipulated in c1, c2, and c3 of this section, employees are also entitled to retirement waiting period benefits; social insurance contribution period preservation; and one-time social insurance benefit according to current regulations.

The salary and wage supplements specified in Clause 3, Article 3, and Article 4 of Decree No. 41/2002/NĐ-CP, after amendments and supplements, shall be applied in accordance with Item a, Point 1, Section II of this Circular.

For joint-stock companies operating for 12 months, the salary and wage supplements (if any) are calculated at the time the enterprise receives its business registration certificate under the Enterprise Law.

The minimum wage level serving as the basis for calculating benefits for the subjects mentioned in Item c, Point 1, and Point 2, Section II of this Circular, shall be implemented according to Clause 2, Article 6 of Decree No. 03/2003/NĐ-CP dated January 15, 2003 of the Government on adjusting wages, social allowances, and reforming the wage management mechanism, specifically as follows:

- Unemployment benefits for the period before January 1, 2003, are calculated based on a minimum wage of 210,000 VND per month.

- Unemployment benefits for the period starting from January 1, 2003, are calculated based on a minimum wage of 290,000 VND per month; job-seeking allowance, 70% of the monthly wage for the remaining months not completed under the labor contract, is calculated based on a minimum wage of 290,000 VND per month.

In cases where there is a fractional month, it is calculated according to the provisions in Item c, Point 1, Section II of this Circular.

Example 4: Mr. Nguyen Van D, a locomotive and carriage repair worker, at the time of receiving the termination decision was 54 years old; his actual working time in the state sector was 30 years and 7 months (including 1 year and 2 months from January 1, 2003); his salary coefficient was 3.05 (Grade 6, Group III wage scale, A.1 mechanical, electrical, electronics, information technology ladder). Mr. D is entitled to the following benefits:

- Monthly salary and wage supplements before January 1, 2003.

210,000 VND x 3.05 = 640,500 VND

Monthly salary and wage supplements from January 1, 2003.

290,000 VND x 3.05 = 884,500 VND

- Unemployment benefits for the actual working time before January 1, 2003, which is 29 years and 5 months, converted to 29 years and 6 months of actual work.

640,500 VND x 29.5 months = 18,894,750 VND

Unemployment benefits for the actual working time from January 1, 2003, which is 1 year and 2 months, converted to 1 year and 6 months of actual work.

884,500 VND/month x 1.5 months = 1,326,750 VND

Total unemployment benefits: 20,221,500 VND

(18,894,750 VND + 1,326,750 VND)

- Additional unemployment benefits for the actual working time before January 1, 2003.

640,500 VND/month x 29.5 months = 18,894,750 VND

Additional unemployment benefits for the actual working time from January 1, 2003.

884,500 VND/month x 1.5 months = 1,326,750 VND

Total additional unemployment benefits for the actual working time:

20,221,500 VND (18,894,750 VND + 1,326,750 VND)

- One-time allowance: 5,000,000 VND

- Job-seeking allowance:

884,500 VND/month x 6 months = 5,307,000 VND

Total amount received: 50,750,000 VND

(20,221,500 VND + 20,221,500 VND + 5,000,000 VND + 5,307,000 VND)

- Entitled to social insurance benefits according to current regulations.

Example 5: Mr. Nguyen Van E, a road construction worker, at the time of receiving the termination decision was 54 years old; his actual working time in the state sector was 27 years and 7 months (including 2 years and 3 months from January 1, 2003); his salary coefficient was 3.45 (Grade 7, Group II wage scale, A.6 basic construction ladder). Mr. E had already received unemployment benefits for 15 years. Mr. E is entitled to the following benefits:

- Monthly salary and wage supplements before January 1, 2003.

210,000 VND x 3.45 = 724,500 VND

Monthly salary and wage supplements from January 1, 2003.

290,000 VND x 3.45 = 1,000,500 VND

- Actual working time eligible for unemployment benefits:

27 years and 7 months - 15 years = 12 years and 7 months

- Unemployment benefits for the actual working time before January 1, 2003.

724,500 VND/month x 10.5 months = 7,607,250 VND

Unemployment benefits for the actual working time from January 1, 2003.

1,000,500 VND x 2.5 months = 2,501,250 VND

Total unemployment benefits: 10,108,500 VND

(7,607,250 VND + 2,501,250 VND)

- Additional unemployment benefits for the actual working time before January 1, 2003.

724,500 VND/month x 10.5 months = 7,607,250 VND

Additional unemployment benefits for the actual working time from January 1, 2003.

1,000,500 VND x 2.5 months = 2,501,250 VND

Total additional unemployment benefits for the actual working time:

10,108,500 VND (7,607,250 VND + 2,501,250 VND)

- One-time allowance: 5,000,000 VND

- Job-seeking allowance:

1,000,500 VND x 6 months = 6,003,000 VND

- Total amount received: 31,220,000 VND

(10,108,500 VND + 10,108,500 VND + 5,000,000 VND + 6,003,000 VND).

- Entitled to social insurance benefits according to current regulations.

c4. Workers who are still lacking up to five years until the retirement age as prescribed by the Labor Code (men aged 55 to under 60, women aged 50 to under 55) and have contributed to social insurance for at least 15 years without receiving a one-time social insurance benefit, as stipulated in point d Clause 3 Article 3 of Decree No. 41/2002/ND-CP, now specify as follows:

+ Shall enjoy policies as prescribed in points c1 and c2 of item c point 1 Section II of this Circular.

+ Shall continue to contribute to social insurance monthly at a rate of 15% of salary until reaching the retirement age as prescribed (60 years old for men, 55 years old for women), then shall receive monthly pension according to current regulations.

The salary basis for social insurance contributions is the salary basis for social insurance contributions before the date of retirement, including: rank salary, position salary, position allowance, regional allowance, and salary retention coefficient calculated based on the minimum wage set by the State at the time of social insurance payment.

+ The period of continued social insurance contributions starts from the date of the decision to retire.

+ Procedures for continuing social insurance contributions shall be carried out in accordance with the guidelines of the Vietnam Social Security.

+ During the period of self-contributing to social insurance, if the worker dies, their dependents shall receive funeral benefits according to current regulations.

Example 6: Mr. Nguyen Van F, a construction worker at the bridge installation site, was 57 years old when he had the decision to retire; he had 17 years and 6 months of actual work experience in the state sector (including 6 months from January 1, 2003); his salary coefficient was 3.05 (rank 6, group level III A.6 construction); regional allowance 0.4. Mr. F belongs to the category that continues to contribute to social insurance until reaching the retirement age (60 years old) and will be handled according to the following regulations:

- Monthly salary and wage supplements before January 1, 2003.

210,000 VND x (3.05 + 0.4) = 724,500 VND

Monthly salary and wage supplements from January 1, 2003.

290,000 VND x (3.05 + 0.4) = 1,000,500 VND

- Unemployment assistance based on actual working time before January 1, 2003

724,500 VND/month x 17 months = 12,316,500 VND

Unemployment assistance based on actual working time from January 1, 2003

1,000,500 VND x 0.5 month = 500,250 VND

Total unemployment assistance: 12,816,750 VND

(12,316,500 VND + 500,250 VND)

- Additional unemployment benefits for the actual working time before January 1, 2003.

724,500 VND/month x 17 months = 12,316,500 VND

Additional unemployment benefits for the actual working time from January 1, 2003.

1,000,500 VND x 0.5 month = 500,250 VND

Total additional assistance calculated based on actual time:

12,816,750 VND (12,316,500 VND + 500,250 VND)

- One-time assistance amount: 5,000,000 VND

- Total amount received: 30,633,500 VND

(12,816,750 VND + 12,816,750 VND + 5,000,000 VND)

- Mr. F must continue to contribute to social insurance for 3 years (36 months); the monthly social insurance contribution rate:

1,000,500 VND x 15% = 150,075 VND

2. Policies for surplus workers implementing fixed-term labor contracts from 12 to 36 months as prescribed in Article 4 of Decree No. 41/2002/ND-CP, which has been amended and supplemented, now specify as follows:

a. Shall receive unemployment assistance of one month's rank salary and position allowance (if applicable) for each year of actual work experience in the state sector.

b. Shall receive 70% of rank salary and position allowance (if applicable) for the remaining months not yet completed in the labor contract, but not exceeding 12 months.

Actual work experience in the state sector is defined in point c item 1 Section II of this Circular.

Example 7: Mr. Nguyen Van G, a sand and gravel extraction worker, signed a fixed-term labor contract for three years, and at the time of retirement, only completed one year of the contract, leaving 24 months unfulfilled, but according to regulations, he can only receive a maximum of 12 months. Therefore, Mr. G can only receive assistance (70% x 12 months) of rank salary and position allowance (if applicable).

c. Workers who are still lacking up to five years until the retirement age as prescribed by the Labor Code (men aged 55 to under 60, women aged 50 to under 55) and have contributed to social insurance for at least 15 years without receiving a one-time social insurance benefit, as stipulated in Clause 3 Article 4 of Decree No. 41/2002/ND-CP, which has been amended and supplemented, now specify as follows:

+ Shall enjoy policies as prescribed in points a and b above.

+ Shall continue to contribute to social insurance monthly at a rate of 15% of salary until reaching the retirement age as prescribed (60 years old for men, 55 years old for women), then shall receive monthly pension according to current regulations.

The salary basis for social insurance contributions is the salary basis for social insurance contributions before the date of retirement, including: rank salary, position salary, position allowance, regional allowance, and salary retention coefficient calculated based on the minimum wage set by the State at the time of social insurance payment.

+ The period of continued social insurance contributions starts from the date of the decision to retire.

3. Workers who have received unemployment assistance as prescribed in Clause 3 Article 3 of Decree No. 41/2002/ND-CP, which has been amended and supplemented, if re-employed by the company that terminated their employment or other companies, agencies in the state sector or assigned land or forest by forestry farms, must return the unemployment assistance according to Article 5 of Decree No. 41/2002/ND-CP, which has been amended and supplemented, specified as follows:

a. Workers re-employed by the company that terminated their employment, other companies, agencies in the state sector including: state-owned enterprises, single-member limited liability companies, limited liability companies with two or more members, state-owned agricultural farms, state-owned forestry farms, agencies and units receiving salaries from the state budget (or assigned land or forest by state-owned agricultural farms or forestry farms) must submit a copy of the decision to retire and receive surplus labor policy due to enterprise restructuring and the additional support amount as stipulated in point b Clause 3 Article 3 of Decree No. 41/2002/ND-CP, which has been amended and supplemented (one month's rank salary, position salary, position allowance, regional allowance for each year of actual work experience in the state sector and 5 million VND).

b. Companies, agencies, units responsible for collecting the unemployment assistance paid by workers must pay it back to the surplus labor support fund as prescribed by the Ministry of Finance.

III. SOURCE OF FUNDS FOR PAYMENT

The source of funds for paying the surplus labor policy is implemented according to Article 7 and Article 8 of Decree No. 41/2002/ND-CP, which has been amended and supplemented, and the guidance documents of the Ministry of Finance.

IV. IMPLEMENTATION

1. Responsibilities of the unit:

The entity conducting the labor restructuring and implementing policies for surplus labor as stipulated in Article 9 of Decree No. 41/2002/NĐ-CP, which has been amended and supplemented, shall implement according to the following procedures:

a. Organize propaganda on the Party's and State's policies regarding continued restructuring, reform, development, and enhancing the efficiency of state-owned enterprises and policies for surplus labor so that workers understand the policies of the Party and State.

b. Develop a labor restructuring plan.

The entity developing the restructuring plan, including the labor restructuring plan, shall be implemented through the following steps:

Step 1. Compile a complete list of all employees of the entity at the time of restructuring in accordance with Article 1 of Decree No. 41/2002/NĐ-CP, which has been amended and supplemented (Model 1, Model 1b for forestry and farm units attached hereto), including:

- The number of employees currently working and receiving wages and social insurance contributions, or not receiving social insurance contributions (including seasonal or specific job workers whose duration is less than one year).

- The number of employees who have stopped working but are still listed in the entity's roster, receiving wages or not, and social insurance contributions or not.

Step 2. Determine the number of employees needed and surplus employees as follows:

- For entities holding 100% state capital and those converted into limited liability companies with one member: determine the number of employees needed based on the production and business plan, production technology, machinery and equipment, labor norms in line with the unit's development direction and profitability, approved by competent state authorities; the remaining employees are those not required for use.

- For entities implementing sales, contracting, and leasing operations: the number of employees needed is the number agreed upon between both parties (seller and buyer, contractor and subcontractor, lessor and lessee) recorded in the sale, contracting, or leasing contracts of the enterprise; the remaining employees are those not required for use.

- For entities implementing privatization from April 26, 2002, to December 31, 2005: the number of employees needed is based on the privatization plan approved by competent state authorities; the remaining employees are those not required for use.

- For joint-stock companies converted from enterprises operating for no more than 12 months since obtaining their business registration certificate under the Enterprise Law, when restructuring, if employees transferred from state-owned enterprises cannot be assigned work, they will be considered as employees not required for use.

- For entities implementing mergers and consolidations: the number of employees needed is based on the merger and consolidation plan approved by competent authorities; the remaining employees are those not required for use.

- For entities implementing the transfer of the entity to a group of employees: the number of employees needed is the current number of employees in the enterprise, excluding those voluntarily terminating their employment contracts and determined by the Trade Union Executive Board of the enterprise or the provisional Trade Union Executive Board, or if there is no provisional Trade Union Executive Board, then by the representative elected by the Workers' and Staffs' Congress.

The surplus employees identified in Step 2 above are divided into two categories: Employees hired before April 21, 1998, are surplus employees subject to the regulations stipulated in Decree No. 41/2002/NĐ-CP, which has been amended and supplemented; employees hired from April 21, 1998, are subject to the regulations of the Labor Code.

- For enterprises implementing dissolution and bankruptcy: all employees listed in the enterprise roster hired before April 26, 2002, are subject to the policy stipulated in Decree No. 41/2002/NĐ-CP, which has been amended and supplemented. Employees hired from April 26, 2002, are subject to the regulations of the Labor Code.

Step 3. Compile a list of employees needed (Model 2 attached hereto) and a list of employees not required for use (Model 3 attached hereto).

Step 4. The enterprise coordinates with the Trade Union Executive Board to organize a Workers' and Staffs' Congress to provide opinions on the employee lists (from Model 1 to Model 3).

Step 5. Based on the opinions of the Workers' and Staffs' Congress, the enterprise completes the labor restructuring plan and submits it to the authority specified in Point 5, Section IV of this Circular for approval. The submission consists of six copies, each containing:

- A request for approval of the labor restructuring plan (Model 4 attached hereto)

- The labor restructuring plan (Model 5, Model 5b for forestry and farm units attached hereto),

- A list of employees classified (from Model 1 to Model 3 attached hereto).

For entities undergoing dissolution and bankruptcy, there is no need to approve the enterprise restructuring plan, only the labor restructuring plan (Model 1, 3 attached hereto) needs to be approved.

c. Provide assistance payments to surplus employees.

Within fifteen working days from the date the competent authority approves the labor restructuring plan, the entity shall pay assistance to surplus employees as follows:

c1. Issue a decision for each surplus employee to terminate their employment according to the groups of policies prescribed in Decree No. 41/2002/NĐ-CP, which has been amended and supplemented, and unify the termination date according to Model 6 attached hereto; the decision must be at least three copies: one copy sent to the employee, one copy retained by the entity, and one copy sent to the social insurance agency.

c2. Prepare a budget for paying benefits to surplus employees according to the groups of policies (Model 7, 8, 9, 10, 10b for employees of forestry and farm units subject to land and forest transfer if their employment relationship is terminated, they will enjoy benefits according to Article 42 of the Labor Code attached hereto).

c3. Prepare a file requesting financial support from the Surplus Labor Support Fund in accordance with the regulations of the Ministry of Finance.

c4. For surplus labor not requiring usage and not falling within the scope of resolution under Decree No. 41/2002/NĐ-CP as amended and supplemented (Model No. 11 attached hereto), the unit shall prepare a separate list to resolve the regime according to the provisions of the Labor Code.

d. Resolving the regime for workers.

- Responsibilities of enterprises.

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

+ Provide free vocational training certificates once to workers who have a need for vocational training (Model No. 12 attached hereto).

+ Complete all necessary documents and procedures for resolving social insurance benefits in accordance with the law.

+ 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 days (working days) from the date of receiving funds from the Surplus Labor Support Fund, the enterprise has the responsibility to directly pay, once at the enterprise, to the worker the amounts of assistance according to the approved plan.

In case the worker cannot personally come to receive the assistance, they may authorize another person to receive it in accordance with the Civil Code.

In case the worker dies after the signing of the decision to terminate employment (effective date) without having signed to receive the amount due, the enterprise shall transfer this amount to the manager of the deceased's estate in accordance with 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 enterprise (if any).

e. At the latest thirty days (working days) from the date of completing the resolution of the surplus labor regime, the enterprise has the responsibility to report the results of implementation to competent authorities. The content of the report includes: assessment of strengths and weaknesses, results of payment implementation (as prescribed by the Ministry of Finance), the report is made in six copies and sent to: the authority approving the labor plan, 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, centrally-run city, and kept at the enterprise.

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

a. Surplus workers who wish to undergo vocational training and have been issued a free vocational training certificate must submit their training application at the vocational training institution designated by the Department of Labor - Invalids and Social Affairs. The deadline for submitting the training application is within twelve months from the date of the decision to terminate employment.

b. The vocational training institution is responsible for accepting the registration forms for vocational training of surplus workers who wish to undergo vocational training. The form includes:

- Original free vocational training certificate issued by the employer;

- Copy of the decision to terminate employment and enjoy the policy for surplus labor due to restructuring state-owned enterprises.

After accepting the application, the vocational training institution confirms "agreement to accept vocational training" by signing and stamping on the back of the original termination decision and returning it to the worker.

The vocational training institution is entitled to a maximum funding of six months to provide free vocational training for surplus workers who wish to undergo vocational training. The level of training fees, procedures, and settlement of funding are carried out in accordance with the guidelines of the Ministry of Finance.

3. The Department of Labor - Invalids and Social Affairs of the province, centrally-run city under the Central Government is responsible for:

a. Assisting the People's Committee of the province, centrally-run city under the Central Government in urging and inspecting the implementation of policies for surplus labor in the area;

b. Designating vocational training institutions that have been registered to operate vocational training activities by the Labor - Invalids and Social Affairs agency and compiling a list of designated vocational training institutions (name of the vocational training institution; specific address) to be sent to the Ministry of Finance for vocational training funding. Each province, centrally-run city is allowed to designate a maximum of ten vocational training institutions and announce them through various media.

4. The Vietnam Social Security is responsible for directing, guiding, and inspecting the Vietnam Social Security of the province, centrally-run city under the Central Government to implement the social insurance regime for surplus workers in accordance with this Circular and current regulations.

5. Responsibilities of Ministries; agencies equivalent to ministries; Chairmen of the People's Committees of the province, centrally-run city under the Central Government; Management Council of State-Owned Enterprise No. 91:

a. Organizing propaganda on the Party and State's policies on continuing to restructure, reform, develop, and improve the efficiency of state-owned enterprises, especially policies for surplus labor;

b. Approving the labor restructuring plan proposed by the unit; reviewing the enterprise's request for financial support according to the guidelines of the Ministry of Finance;

Within fifteen days (working days) from the date of receipt of the labor restructuring plan of the unit, the competent authority has the responsibility to approve and send the decision along with five sets of documents to the unit. If approval is not possible, the competent authority will guide the unit to modify and supplement the plan. Within ten days (working days) from the date of receipt of the plan from the competent authority, the unit completes the plan and sends it to the approving authority.

c. Directing specialized agencies to guide units under management in the restructuring process to build plans, inspect the implementation of policies for surplus labor, and follow the provisions of this Circular;

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

e. Reporting to the Ministry of Labor - Invalids and Social Affairs every three months on the situation of labor restructuring and surplus labor resolution: assessment of strengths and weaknesses, results of implementation (Model No. 13, 14 attached hereto), suggestions for resolving issues encountered during implementation, the reporting deadline being the 15th of April, July, October each year, and the annual report on the 15th of January the following year to report to the Government.

This Circular takes effect fifteen days from the date of publication in the Official Gazette and replaces Circular No. 11/2002/TT-BLDTBXH dated June 12, 2002, and Circular No. 11/2003/TT-BLDTBXH dated May 22, 2003, of the Ministry of Labor - Invalids and Social Affairs.

During the implementation period, if there are any difficulties, please reflect them to the Ministry of Labor - Invalids and Social Affairs for research and resolution.