Circular No. 42/2009/TT-BLDTBXH guiding the implementation of certain employee benefits and policies under Decree No. 109/2008/NĐ-CP dated October 10, 2008 of the Government on the sale and transfer of state-owned enterprises with 100% state capital.

CIRCULAR

Guidelines for implementing certain benefits and policies for workerspursuant to Decree No. 109/2008/NĐ-CP dated October 10, 2008 of the Government on selling and transferring state-owned enterprises with 100% state capital concerning the sale and transfer of state-owned enterprises with 100% state capital

Pursuant to Decree No. 109/2008/NĐ-CP dated October 10, 2008 of the Government on selling and transferring state-owned enterprises with 100% state capital;

Pursuant to Decree No. 186/2007/NĐ-CP dated December 25, 2007 of the Government stipulating the functions, tasks, powers, and organizational structure of the Ministry of Labor - Invalids and Social Affairs,

After receiving opinions from relevant ministries and agencies, the Ministry of Labor - Invalids and Social Affairs issues guidelines for implementing certain benefits and policies for workers pursuant to Decree No. 109/2008/NĐ-CP dated October 10, 2008 of the Government on selling and transferring state-owned enterprises with 100% state capital (hereinafter referred to as Decree No. 109/2008/NĐ-CP) as follows:

Article 1. Scope of Regulation

This Circular provides guidelines for implementing certain benefits and policies for workers in state-owned enterprises with 100% state capital, independent subsidiaries, and affiliated units of state-owned enterprises with 100% state capital that are subject to sale and transfer as provided for in Article 2 of Decree No. 109/2008/NĐ-CP.

The above-mentioned enterprises, companies, and units are collectively referred to as state-owned enterprises with 100% state capital.

Article 2. Applicability

The subjects applying this Circular are employers; workers employed under labor contracts as prescribed in Decree No. 44/2003/NĐ-CP dated May 9, 2003 of the Government (including workers recruited into the public sector before August 30, 1990 but have not yet been transferred to labor contracts); individuals and organizations related to the sale and transfer of state-owned enterprises with 100% state capital as prescribed.

Article 3. Establishing a plan for the number of current employees of state-owned enterprises with 100% state capital subject to sale and transfer

1. For state-owned enterprises with 100% state capital subject to sale.

Upon receipt of the sale notification, the enterprise shall be responsible for establishing an employee restructuring plan in accordance with Clause 5, Article 18 of Decree No. 109/2008/NĐ-CP for approval by the competent authority, including the following types of employees:

a) The total number of employees of the enterprise according to Model No. 1 issued together with this Circular.

b) The number of employees meeting the conditions for retirement as prescribed in Decree No. 152/2006/NĐ-CP dated December 22, 2006 of the Government guiding certain provisions of the Law on Social Insurance regarding mandatory social insurance.

c) The number of employees whose labor contracts will be terminated (including: expiration of labor contracts; voluntary termination of labor contracts or other reasons as prescribed by labor laws).

d) The number of employees that the buyer does not need to continue using.

đ) The number of employees that the buyer must inherit and continue to use (including those temporarily suspended from performing labor contracts, currently on short-term social insurance leave, if any).

e) A summary of the employee utilization plan according to Model No. 2 issued together with this Circular.

2. For state-owned enterprises with 100% state capital subject to transfer.

After organizing a Workers' Congress to vote by simple majority on voluntarily accepting the transfer of the enterprise, the Trade Union Executive Committee (or the Temporary Trade Union Executive Committee or the person elected by the Workers' Congress to represent the workforce) shall be responsible for coordinating with the General Director of the enterprise to establish an employee utilization plan in accordance with Clause 2 and Clause 5, Article 23 of Decree No. 109/2008/NĐ-CP for approval by the competent authority, including the following types of employees:

a) The total number of employees of the enterprise according to Model No. 1 issued together with this Circular.

b) The number of employees meeting the conditions for retirement as prescribed in Decree No. 152/2006/NĐ-CP dated December 22, 2006 of the Government guiding certain provisions of the Law on Social Insurance regarding mandatory social insurance.

c) The number of employees whose labor contracts will be terminated (including: expiration of labor contracts; voluntary termination of labor contracts or other reasons as prescribed by labor laws).

d) The number of employees who do not wish to continue working at the enterprise when it is transferred to the workforce.

đ) The number of employees accepting the transfer of the state-owned enterprise with 100% state capital

e) A summary of the employee utilization plan according to Model No. 2 issued together with this Circular.

3. The establishment of the employee list in the utilization plan for state-owned enterprises with 100% state capital subject to sale as prescribed in Clause 1 of this Article is the time point of announcing the initial price of the enterprise, for state-owned enterprises with 100% state capital subject to transfer as prescribed in Clause 2 of this Article is the time point when the competent authority approves the transfer plan.

Article 4. Treatment and policies for employees in state-owned enterprises fully implementing sales or transfers.

Based on the labor utilization plan stipulated in Article 3 of this Circular, which has been approved by the competent authority, the General Director of the state-owned enterprise fully implementing sales or transfers shall carry out necessary procedures to address treatment and policies for employees as follows:

1. Distribution of surplus funds from the reward and welfare fund:

Those individuals listed in the regular roster (receiving salaries, contributing to social insurance, including those temporarily suspended from employment contracts, on short-term social insurance leave, if applicable) of the state-owned enterprise at the time of determining the enterprise's value shall be entitled to a share of any surplus funds (if available) from the Reward Fund and Welfare Fund as specified in Clause 1, Article 10 and Point d, Clause 2, Article 22 of Decree No. 109/2008/NĐ-CP according to the total number of years (full 12 months) of actual work performed by the employee, from the date of recruitment to the date of determining the enterprise's value for the purpose of selling or transferring the state-owned enterprise. For the fractional part of the total number of years of actual work to calculate the distribution of surplus funds from the Reward Fund and Welfare Fund, the enterprise shall decide.

2. Retirement benefits:

Employees stipulated in Point b, Clause 1 and Point b, Clause 2, Article 3 of this Circular shall have their retirement benefits resolved in accordance with the provisions of the law.

3. Unemployment allowance:

Employees stipulated in Point c, Clause 1 and Point c, Clause 2, Article 3 of this Circular who terminate their employment contracts shall be entitled to an unemployment allowance (if applicable) in accordance with Clause 1, Article 42 of the Labor Code, Decree No. 44/2003/NĐ-CP dated May 9, 2003 of the Government, Circular No. 21/2003/TT-BLDTBXH dated September 22, 2003, and Circular No. 17/2009/TT-BLDTBXH dated May 26, 2009 of the Ministry of Labor, War Invalids and Social Affairs.

The source of funds for paying unemployment allowances shall be implemented in accordance with Article 10 of Decree No. 109/2008/NĐ-CP and the guidance of the Ministry of Finance.

4. Treatment for redundant workers:

Workers received by the purchasing enterprise who do not require continued employment as stipulated in Point d, Clause 1, Article 3 and workers who do not wish to continue working at the enterprise when transferred to a worker collective as stipulated in Point d, Clause 2, Article 3 of this Circular fall under the scope of Decree No. 110/2007/NĐ-CP dated June 26, 2007 of the Government regarding policies for redundant workers due to restructuring state-owned companies, shall be resolved in accordance with Decree No. 110/2007/NĐ-CP and Circular No. 18/2007/TT-BLDTBXH dated September 10, 2007 of the Ministry of Labor, War Invalids and Social Affairs guiding the implementation of certain articles of Decree No. 110/2007/NĐ-CP dated June 26, 2007 of the Government regarding policies for redundant workers due to restructuring state-owned companies.

5. Allowance for workers not falling within the category of redundant workers:

Workers received by the purchasing enterprise who do not require continued employment as stipulated in Point d, Clause 1, Article 3 and workers who do not wish to continue working at the enterprise when transferred to a worker collective as stipulated in Point d, Clause 2, Article 3 of this Circular, who do not fall under the scope of resolution of redundant worker policies under Decree No. 110/2007/NĐ-CP, shall be resolved in accordance with the provisions of the Labor Code regarding job loss allowance (if applicable) or unemployment allowance (if applicable).

The source of funds for paying unemployment allowances shall be implemented in accordance with Article 10 of Decree No. 109/2008/NĐ-CP and the guidance of the Ministry of Finance.

Article 5. Policy towards employees continuing to work at the enterprise after the state-owned enterprise has completed the sale or transfer.

Employees who are required for use according to the approved sale or transfer plan shall continue to implement their labor contracts with the state-owned enterprise prior to the sale or transfer in accordance with Decree No. 44/2003/NĐ-CP dated May 9, 2003 of the Government detailing and guiding the implementation of certain provisions of the Labor Code on labor contracts. When terminating employment or losing their job, employees will be settled according to termination benefits (if applicable) and unemployment benefits (if applicable) under labor laws and related commitments in the sale or transfer agreements signed by the state-owned enterprise.

Article 6. Policy towards employees belonging to groups of employees transferred to state-owned enterprises

1. Employees whose names appear on the regular payroll of the state-owned enterprise (receiving salaries, contributing to social insurance, including those temporarily suspended from working under labor contracts, taking short-term social insurance leave, if applicable) participating in the transfer of that enterprise shall enjoy ownership rights in the enterprise according to Article 24 of Decree No. 109/2008/NĐ-CP at the time of transfer. The period for calculating ownership rights in the enterprise is the actual working time in the public sector (cumulative), including:

a) Actual working time at the state-owned enterprise; administrative agencies, public service units, armed forces units receiving salaries from the state budget.

b) Time receiving salaries from the state-owned enterprise, state budget (training, work...), enjoying social insurance benefits (sick leave; maternity; occupational accidents, occupational diseases).

c) Working time under piece-rate or volume-based work arrangements during which the state-owned enterprise pays salaries and contributes to social insurance and unemployment insurance for employees in accordance with the law.

2. Employees will be supported with funding for training and retraining to secure employment from the Enterprise Restructuring Support Fund according to Clause 4, Article 25 of Decree No. 109/2008/NĐ-CP and guidelines issued by the Ministry of Finance.

3. Employees will be guaranteed a minimum of three years of employment starting from the date of transferring to the state-owned enterprise according to Clause 2, Article 21 of Decree No. 109/2008/NĐ-CP, except in cases where employees voluntarily terminate their labor contracts. After the commitment period specified in the approved labor utilization plan, termination benefits (if applicable), unemployment benefits (if applicable), and unemployment allowances (if applicable) for employees will be implemented according to the Labor Code, Social Insurance Law, and related policies.

In the event that the enterprise falls into bankruptcy after being transferred to a group of employees, employee rights and benefits will be implemented according to the law on enterprise bankruptcy.

Article 7. Responsibilities of the Director and the Reform Board at state-owned enterprises when selling or transferring

1. Providing necessary information about employees of state-owned enterprises to the party registering to participate in purchasing or receiving the transfer as prescribed.

2. Resolving employee benefits according to the approved labor utilization plan (or agreement recorded in the labor contract) and relevant laws before handing over assets, books, and related files to the receiving party as stipulated in the enterprise sale or transfer contract.

3. Reporting on the implementation of the labor utilization plan to the Department of Labor, Invalids and Social Affairs, social insurance agency, and provincial or centrally-administered city Trade Union where the headquarters of the state-owned enterprise being sold or transferred is located.

Article 8. Responsibilities of the party registering to purchase (except for cases registering to purchase through auction), or receiving the transfer

1. Collecting and analyzing the labor situation of state-owned enterprises.

2. Developing a labor utilization plan in the registration file to participate in purchasing or receiving the transfer of state-owned enterprises as prescribed in Article 3 of this Circular. In cases of direct negotiation purchases, the labor utilization plan will also be directly agreed upon between the parties involved before submitting to the competent authority for approval.

3. If the registration file to purchase or receive the transfer of state-owned enterprises is approved by the competent authority, the party receiving the purchase or transfer shall be responsible for fulfilling commitments to accept and arrange employment for the number of employees transferred according to the labor utilization plan approved by the competent authority.

Article 9. Responsibilities of the Enterprise Reform and Development Board

Directing and guiding state-owned enterprises and the Reform Board at state-owned enterprises to properly implement policies for employees when selling or transferring state-owned enterprises as prescribed in Articles 30, 31, and 32 of Decree No. 109/2008/ND-CP and compiling the situation report to the Ministry of Labor, Invalids and Social Affairs.

Article 10. Responsibilities of the Departments of Labor, Invalids and Social Affairs of provinces and centrally-administered cities

Cooperating with the Departments of Planning and Investment, Finance, Enterprise Reform and Development Board, relevant agencies, and provincial or centrally-administered city Trade Unions to guide, monitor, and inspect the implementation of regulations in Decree No. 109/2008/ND-CP and related legal documents concerning employees, compiling the situation report to the Ministry of Labor, Invalids and Social Affairs.

Article 11. Effective Date

1. This Circular takes effect 45 days from the date of signature.

Repeal Circular No. 29/2005/TT-BLDTBXH dated October 19, 2005 of the Ministry of Labor, Invalids and Social Affairs guiding the implementation of certain provisions of the labor policy of Decree No. 80/2005/NĐ-CP dated June 22, 2005 of the Government on transferring, selling, leasing, and entrusting management of state-owned companies.

2. The labor policies and benefits prescribed in this Circular shall apply from the date Decree No. 109/2008/NĐ-CP dated October 10, 2008 of the Government on selling and transferring state-owned enterprises comes into effect.

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