Decree No. 41/2002/ND-CP on policies for surplus labor due to restructuring state-owned enterprises

DECREE

On policies for surplus labor due to restructuring state-owned enterprises

THE GOVERNMENT

Pursuant to the Law on Organization of the Government dated December 25, 2001;

Based on the Labor Code dated June 23, 1994;

At the proposal of the Minister of Labor, Invalids and Social Affairs,

DECREE

PART I
SCOPE AND SUBJECTS OF APPLICATION

Article 1. The scope of application of this Decree includes state-owned enterprises implementing restructuring measures approved by competent state authorities, including:

1. Enterprises holding 100% state capital.

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

3. State-owned enterprises converted into joint-stock companies; joint-stock companies converted from state-owned enterprises that have been operating for no more than twelve months since obtaining their business registration certificates under the Enterprise Law.

4. State-owned enterprises undergoing mergers or consolidations.

5. State-owned enterprises implementing transfer, sale, lease, or management contracts.

6. State-owned enterprises being dissolved or declared bankrupt.

Article 2. The subjects of application of this Decree are employees who are performing indefinite-term or fixed-term employment contracts of one to three years, including:

1. Surplus employees in enterprises specified in Clauses 1, 2, 3, 4, and 5 of Article 1 of this Decree, who were recruited before April 21, 1998 (the date when the Prime Minister's Directive No. 20/1998/CT-TTg on accelerating the restructuring and modernization of state-owned enterprises was implemented), including:

a) Employees currently working, where during the restructuring process, the enterprise has taken all measures to create jobs but still cannot arrange work for them;

b) Employees listed in the regular roster of the enterprise but without work, at the time of restructuring, the enterprise still cannot arrange work for them.

2. Employees in enterprises being dissolved or declared bankrupt.

Chapter II
POLICIES FOR SURPLUS LABOR

Article 3. Employees performing indefinite-term employment contracts who are surplus labor:

1. Age 55 to under 60 for males, age 50 to under 55 for females, with at least 20 years of social insurance contributions:

a) Are entitled to retirement, but the percentage of early retirement pension will not be deducted.

b) Are entitled to two additional allowances as follows:

An allowance of three months' salary grade, position, and current wage supplements for each year (12 months) of early retirement;

An allowance of five months' salary grade, position, and current wage supplements for the first 20 years of work with social insurance contributions. For each year beyond 20 years, an additional half-month's salary grade, position, and current wage supplements allowance is provided.

2. Reaching the retirement age stipulated by the Labor Code but lacking up to one year of social insurance contributions, they are entitled to have the State pay once the amount of social insurance for the remaining months at a rate of 15% of monthly salary to settle the monthly pension benefits.

3. Other categories shall terminate their employment contracts and be entitled to the following benefits:

a) Unemployment allowance calculated based on actual years worked in the public sector, with one month's salary grade, position, and current wage supplements for each year, but not less than two months' salary and current wage supplements;

b) Additional support in the form of two allowances:

An allowance of one month's salary grade, position, and current wage supplements for each year actually worked in the public sector;

A one-time allowance of five million Vietnamese dong.

c) Entitled to six months' salary grade, position, and current wage supplements to seek new employment.

In cases where employees wish to learn a trade, in addition to the allowance for seeking new employment mentioned above, they may also receive training for a maximum of six months at vocational training centers designated by the State. The State provides funding for these centers to train surplus labor.

Employees lacking up to five years until reaching the retirement age stipulated by the Labor Code and having at least 15 years of social insurance contributions but not yet receiving a one-time social insurance allowance, in addition to the benefits prescribed in Points a and b of this Clause, they can continue to contribute to social insurance at a rate of 15% of their monthly salary before leaving work to the social insurance agency in their place of residence until they reach the retirement age to enjoy pension and death benefits. If they do not meet the conditions to continue contributing to social insurance, their contribution period will be preserved, and they will be issued a social insurance book or receive a one-time allowance according to current regulations.

Article 4. Employees performing fixed-term employment contracts of one to three years who are surplus labor shall terminate their employment contracts and be entitled to the following benefits:

1. Unemployment allowance calculated based on actual years worked in the public sector, with one month's salary grade, position, and current wage supplements for each year.

2. An allowance of seventy percent of salary grade, position, and current wage supplements for the remaining months of the unfulfilled employment contract, but not exceeding twelve months.

3. Employees lacking up to five years until reaching the retirement age stipulated by the Labor Code and having at least 15 years of social insurance contributions but not yet receiving a one-time social insurance allowance, in addition to the benefits prescribed in Paragraphs 1 and 2 of this Article, they can continue to contribute to social insurance at a rate of 15% of their monthly salary before leaving work to the social insurance agency in their place of residence until they reach the retirement age to enjoy pension and death benefits. If they do not meet the conditions to continue contributing to social insurance, their contribution period will be preserved, and they will be issued a social insurance book or receive a one-time allowance according to current regulations.

Article 5. Employees who have received allowances as prescribed in Article 3 of this Decree, if re-employed by the enterprise that previously terminated their employment or another state-owned enterprise, must return the allowance as prescribed in Point b, Clause 3, Article 3 of this Decree. The enterprise hiring the employee is responsible for recovering the aforementioned amount from the employee and depositing it entirely into the Fund for Supporting Surplus Labor Due to Restructuring State-Owned Enterprises established under Article 7 of this Decree.

Article 6. In addition to the policies stipulated in Article 3 and Article 4 of this Decree, surplus workers shall be provided with opportunities to borrow funds from the National Fund for Employment Creation to create their own jobs and shall be introduced to new job opportunities in accordance with the provisions of the law.

Chapter III
SOURCES OF FUNDS FOR RESOLVING SURPLUS LABOR

Article 7. The Support Fund for Surplus Labor resulting from the restructuring of state-owned enterprises

1. Establish a "Support Fund for Surplus Labor resulting from the Restructuring of State-Owned Enterprises" (hereinafter referred to as the Support Fund for Surplus Labor) to assist workers who lose their jobs or retire early due to the restructuring of state-owned enterprises as prescribed in this Decree.

2. The Support Fund for Surplus Labor shall be responsible for providing funding to enterprises; social insurance agencies; vocational training institutions for surplus labor; and organizations established to resolve surplus labor in dissolved or bankrupt enterprises.

3. The Support Fund for Surplus Labor shall be managed and operated by the Minister of Finance.

4. Sources of the Support Fund for Surplus Labor include:

a) State budget;

b) Assistance from organizations and individuals;

c) Other sources.

Article 8. Responsibilities for Paying Benefits to Workers

1. Enterprises shall be responsible for resolving unemployment benefits according to point a, Clause 3, Article 3; Clause 1, Article 4 of this Decree.

Enterprises that truly face financial difficulties, after using up the unemployment benefit reserve fund (if available) and still lack sufficient resources to resolve unemployment benefits for surplus workers shall be supported by the Support Fund for Surplus Labor.

2. Workers shall continue to contribute to social insurance according to point d, Clause 3, Article 3 and Clause 3, Article 4 of this Decree.

3. The Social Insurance Fund shall be responsible for resolving social insurance benefits according to the Labor Code.

4. The Support Fund for Surplus Labor shall be responsible for paying benefits as prescribed in point b, Clause 1 and points b, c, Clause 3, Article 3; Clause 2, Article 4 and social insurance contributions as prescribed in Clause 2, Article 3 of this Decree.

For enterprises that are dissolved or bankrupt, the Support Fund for Surplus Labor shall provide funding to resolve benefits for surplus workers under the responsibility of the enterprise as prescribed in Clause 1 of this Article.

Chapter IV
IMPLEMENTATION

Article 9. Obligations of enterprises

1. Develop a labor adjustment plan, determine the number of workers needed based on production and business requirements, identify the number of surplus workers and the amount of assistance for each worker.

2. Coordinate with trade unions at the enterprise to publicize and disseminate the policies, regulations, and benefits of the Party and the State; implement democratic regulations within the enterprise; publicly announce the labor adjustment plan and the list of surplus workers.

3. Resolve policies and benefits for workers according to this Decree; settle the accounts for the expenditure of assistance payments to workers in accordance with current regulations.

4. Issue recruitment regulations and be responsible for resolving benefits for surplus workers hired by the enterprise that do not fall under the scope of this Decree using the enterprise's funds.

Article 10. Responsibilities of state management agencies

1. Ministry of Labor, Invalids and Social Affairs

- Guide and inspect the implementation of policies and benefits for surplus workers as prescribed in this Decree;

Participate with relevant agencies in formulating labor adjustment plans in reform schemes to enhance the operational efficiency of enterprises;

Specify vocational training institutions to accept and train surplus workers;

Regularly compile and report to the Prime Minister the implementation status of this Decree.

2. Ministry of Finance

Issue management and usage regulations for the Support Fund for Surplus Labor. The use of the Fund must be strict to prevent abuse; clearly define the contents of the application forms and criteria required to receive assistance and ensure transparency and democracy.

Plan the capital sources and submit measures to ensure capital for the Support Fund for Surplus Labor to the Prime Minister;

Monitor and inspect the payment of assistance and the settlement of expenditure for assistance payments to surplus workers;

Regularly compile and report to the Prime Minister the management and usage of the Support Fund for Surplus Labor.

3. Vietnam Social Security

Guide the collection of social insurance according to this Decree;

Resolve social insurance policies and benefits for workers according to this Decree and the guidance of the Ministry of Labor, Invalids, and Social Affairs.

4. Ministries, ministerial-level agencies, government agencies, provincial People's Committees, directly governed cities' People's Committees, Management Councils of State-owned Enterprise Group 91

Direct enterprises under their jurisdiction to develop labor adjustment plans and implement policies and benefits for surplus workers;

Approve labor adjustment resolution plans according to the principle of once per enterprise as prescribed in Article 1 of this Decree.

Establish organizations to resolve policies for surplus workers in dissolved or bankrupt enterprises;

Regularly report to the Government through the Ministry of Labor, Invalids, and Social Affairs on the resolution of policies for surplus workers.

Article 11. Request the Vietnam General Confederation of Trade Unions

1. Participate with state agencies in guiding the implementation of policies for surplus workers.

2. Direct all levels of trade unions to cooperate with heads of units to publicize and explain to workers the policies and regulations of the Party and the State to fully implement the benefits for surplus workers as prescribed by law.

3. Supervise the implementation of benefits for workers.

Article 12. This Decree takes effect fifteen days after its issuance date and remains valid until December 31, 2005.

Article 13. The Ministers, Heads of ministerial-level agencies, Heads of government agencies, Chairpersons of People's Committees of provinces and centrally governed cities are responsible for implementing this Decree./.