Decree No. 63/2015/NĐ-CP on policies for redundant workers when reorganizing state-owned single-member limited liability companies

 DECREE

Regulations on policies for redundant workers

when restructuring state-owned limited liability companies with one member

owned by the State

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

Based on the Labor Code dated June 18, 2012;

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

The Government issues this Decree to regulate policies for redundant workers when restructuring state-owned limited liability companies with one member owned by the State.

Article 1. Scope of Regulation

This Decree regulates policies for redundant workers in state-owned limited liability companies with one member owned by the State under Ministries, ministerial-level agencies, agencies under the Government, provincial People's Committees, municipal People's Committees directly under the central government; parent companies of state economic groups, parent companies of state corporations, parent companies within a group of parent companies - subsidiary companies implementing restructuring according to approved plans (hereinafter referred to collectively as the restructuring company), including:

1. Shareholding, sale.

2. Conversion into a limited liability company with two or more members.

3. Conversion into a public service unit.

4. Merger, consolidation, division, separation.

5. Dissolution, bankruptcy.

Article 2. Applicability

1. Redundant workers in the restructuring company as stipulated in Article 1 of this Decree include:

a) Workers whose names appear on the regular workforce list of the restructuring company as prescribed in Clause 1, 2, 3, and 4 of Article 1 of this Decree, who were last hired before April 21, 1998 (the date when Directive No. 20/1998/CT-TTg of the Prime Minister on accelerating the restructuring and reform of state-owned enterprises took effect), including:

- Workers currently employed at the time of restructuring, for whom the company has taken all measures but cannot arrange employment;

- Unemployed workers (awaiting work) at the time of restructuring, for whom the company cannot arrange employment;

- Workers in the agricultural and forestry sectors of the restructuring company, at the time of restructuring, for whom the company cannot arrange employment and who have not been allocated land or forest management rights.

b) Workers whose names appear on the regular workforce list of the restructuring company as prescribed in Clause 5 of Article 1 of this Decree, who were last hired before April 26, 2002 (the date when Decree No. 41/2002/NĐ-CP of the Government on policies for redundant workers when restructuring state-owned enterprises took effect);

c) Workers whose names appear on the regular workforce list of the restructuring company as prescribed in Clause 1, 2, 3, and 4 of Article 1 of this Decree, who were last hired from April 21, 1998 onwards, at the time of restructuring, for whom the company has taken all measures but cannot arrange employment;

d) Workers whose names appear on the regular workforce list of the restructuring company as prescribed in Clause 5 of Article 1 of this Decree, who were last hired from April 26, 2002 onwards.

2. Persons authorized in writing by the restructuring company to represent the company's capital investment in other businesses and working full-time in the management board of those businesses (hereinafter referred to as representatives of the company's capital), including:

a) Representatives of the capital of the restructuring company as prescribed in Clause 1, 2, 3, and 4 of Article 1 of this Decree, at the time of restructuring, upon expiration of their authorization period, for whom the restructuring company has taken all measures but cannot arrange employment;

b) Representatives of the capital of the restructuring company as prescribed in Clause 5 of Article 1 of this Decree.

3. Agencies, organizations, and individuals related to the implementation of policies for redundant workers when restructuring state-owned limited liability companies with one member owned by the State as prescribed in this Decree.

Article 3. Policies for redundant workers last hired before April 21, 1998 or before April 26, 2002

Policies for redundant workers as stipulated in Point a and b of Clause 1 of Article 2 of this Decree at the time the competent authority approves the labor restructuring plan or the court decides to initiate bankruptcy proceedings are regulated as follows:

1. Redundant workers aged between 55 and 59 for men, and between 50 and 54 for women, with at least 20 years of social insurance contributions, shall be entitled to retirement benefits as prescribed in Clause 1 of Article 50 of the Social Insurance Law 2006 (for cases retiring before January 1, 2016), Clause 4 of Article 54 of the Social Insurance Law 2014 (for cases retiring from January 1, 2016 onwards) and shall also be entitled to the following additional benefits:

a) Not subject to reduction in pension due to early retirement;

b) A lump sum payment of three months' salary for each year (full 12 months, excluding fractional months) of early retirement compared to the provisions of Point a of Clause 1 of Article 50 of the Social Insurance Law 2006 (for cases retiring before January 1, 2016), compared to the provisions of Point a of Clause 1 of Article 54 of the Social Insurance Law 2014 (for cases retiring from January 1, 2016 onwards);

b) Support of one month's basic salary as prescribed by the Government for each year of work with social insurance contributions.

2. Redundant workers aged over 59 but under 60 for men, and over 54 but under 55 for women, with at least 20 years of social insurance contributions, shall be entitled to retirement benefits as prescribed in Clause 1 of Article 50 of the Social Insurance Law 2006 (for cases retiring before January 1, 2016), Clause 4 of Article 54 of the Social Insurance Law 2014 (for cases retiring from January 1, 2016 onwards) and shall also be entitled to the following additional benefits:

a) Not subject to reduction in pension due to early retirement;

b) Support of half a month's basic salary as prescribed by the Government for each year of work with social insurance contributions.

3. Workers who have reached the retirement age as prescribed in Point a Clause 1 Article 50 of the 2006 Social Insurance Law (for cases retiring before January 1, 2016) or Point a Clause 1 Article 54 of the 2014 Social Insurance Law (for cases retiring from January 1, 2016 onwards), but still lack up to six months of social insurance contributions to meet the conditions for receiving pension benefits, shall be entitled to have the State make a one-time payment for the remaining months into the retirement and death benefit fund to settle the retirement benefit regime. The amount of payment for the remaining months shall be equal to the total amount of social insurance contributions of the month immediately preceding the date of retirement, which is the responsibility of both the worker and the employer, multiplied by the number of remaining months.

4. Workers who are surplus and fall under the category prescribed in Point a Clause 1 Article 2 of this Decree, if they do not meet the conditions for enjoying the regimes prescribed in Clauses 1, 2, and 3 of this Article, shall terminate their labor contracts and be entitled to the following benefits:

a) Unemployment allowance as prescribed in Article 49 of the Labor Code;

b) A lump sum payment based on the number of years worked at the company undergoing restructuring, as follows:

- One and a half times the minimum wage set by the Government for workers with less than twenty years of service;

- Half a month's minimum wage set by the Government for workers with at least twenty but less than twenty-five years of service;

- Two-tenths of a month's minimum wage set by the Government for workers with at least twenty-five years of service.

5. Workers who are surplus and fall under the category prescribed in Point b Clause 1 Article 2 of this Decree, if they do not meet the conditions for enjoying the regimes prescribed in Clauses 1, 2, and 3 of this Article, shall terminate their labor contracts and be entitled to the following benefits:

a) Termination allowance as prescribed in Article 48 of the Labor Code;

b) A lump sum payment based on the number of years worked at the company undergoing restructuring, as follows:

- Two months' salary for workers with less than fifteen years of service;

- Seven-tenths of a month's salary for workers with at least fifteen but less than twenty years of service;

- Three-tenths of a month's salary for workers with at least twenty years of service.

Article 4. Policy for surplus workers hired last on or after April 21, 1998, or on or after April 26, 2002

At the time when the competent authority approves the labor adjustment plan or the court decides to initiate bankruptcy proceedings, surplus workers as prescribed in Points c and d Clause 1 Article 2 of this Decree shall terminate their labor contracts and be entitled to the following benefits:

1. Unemployment allowance as prescribed in Article 49 of the Labor Code for surplus workers in companies undergoing restructuring as prescribed in Clauses 1, 2, 3, and 4 of Article 1 of this Decree.

2. Termination allowance as prescribed in Article 48 of the Labor Code for surplus workers in companies undergoing restructuring as prescribed in Clause 5 of Article 1 of this Decree.

Article 5. Policy for representatives of company capital

1. Representatives of company capital prescribed in Clause 2 Article 2 of this Decree, who were last hired before April 21, 1998, or before April 26, 2002, shall enjoy the corresponding benefits prescribed in Article 3 of this Decree; those last hired on or after April 21, 1998, or on or after April 26, 2002, shall enjoy the corresponding benefits prescribed in Article 4 of this Decree.

2. Representatives of company capital shall be entitled to termination allowance paid by the enterprise with company investment undergoing restructuring for the actual period of service of the representative of company capital at that enterprise.

Article 6. Working time as the basis for calculating benefits

1. The working time for calculating unemployment allowance, severance pay, and the support amount specified in Clauses 4 and 5, Article 3 and Article 4 of this Decree is the total actual working time (with attendance recorded and paid in the payroll) at the company implementing restructuring, minus the time spent participating in unemployment insurance according to the laws on unemployment insurance and the time already compensated by the company implementing restructuring for severance pay and unemployment allowance (if applicable).

2. In cases where employees transfer to work at the company implementing restructuring before January 1, 1995, the working time for calculating unemployment allowance, severance pay, and the support amount specified in Clauses 4 and 5, Article 3 and Article 4 of this Decree includes the working time for calculating unemployment allowance, severance pay, and the support amount specified in Clause 1 of this Article and the actual working time in the state sector prior to that (state administrative agencies, state-owned public institutions, units under armed forces receiving salaries from the state budget, state-owned enterprises with 100% state capital, state-owned forestry and agricultural farms).

3. The working time for calculating the benefits stipulated in Point c Clause 1, Point b Clause 2, Clauses 4 and 5, Article 3 and Article 4 of this Decree shall be calculated in years (full 12 months); in cases with fractional months, less than one month shall not be counted; from one month up to but not including six months shall be counted as half a year; six months or more shall be counted as one full year of work.

Article 7. Wages as the basis for calculating benefits

1. The wages serving as the basis for calculating the benefits specified in Point b Clause 1, Article 3 of this Decree are defined as follows:

a) For surplus workers as defined in Clause 1, Article 2 of this Decree, it is the average wage according to their labor contracts for the last five years before retirement;

b) For company representatives as defined in Clause 2, Article 2 of this Decree, it is the average monthly social insurance contribution wage for the last five years before retirement.

2. The wages serving as the basis for calculating unemployment allowance, severance pay as specified in Point a Clause 4, Point a Clause 5, Article 3, and Article 4 of this Decree, and the support amount specified in Point b Clause 5, Article 3 of this Decree are defined as follows:

a) For surplus workers as defined in Clause 1, Article 2 of this Decree, it is the average wage according to their labor contracts for the last six months before retirement;

b) For company representatives as defined in Clause 2, Article 2 of this Decree, it is the average wage according to their labor contracts for the last six months before the company implementing restructuring authorizes them to exercise rights and responsibilities towards the company's investment in other enterprises.

Article 8. Sources of funds for implementing policies for surplus workers in companies undergoing restructuring

1. The sources of funds for implementing policies for surplus workers as stipulated in Article 3 of this Decree and for company representatives are defined as follows:

a) For companies undergoing restructuring as defined in Clause 1, Article 1 of this Decree, the source of funds for implementing policies for surplus workers comes from the proceeds of the first share sale and the sale of enterprises; if insufficient, it can be supplemented from the Enterprise Restructuring and Development Support Fund;

b) For companies undergoing restructuring as defined in Clauses 2, 3, and 4, Article 1 of this Decree, the source of funds for implementing policies for surplus workers comes from the Enterprise Restructuring and Development Support Fund;

c) For companies undergoing restructuring as defined in Clause 5, Article 1 of this Decree, the source of funds for implementing policies for surplus workers comes from revenues as prescribed by law; if insufficient, it can be supplemented from the Enterprise Restructuring and Development Support Fund.

2. The sources of funds for implementing policies for surplus workers as stipulated in Article 4 of this Decree and for company representatives are accounted for as production and business expenses of the company undergoing restructuring.

Article 9. Responsibilities of the company implementing restructuring and the company after restructuring

1. The company implementing restructuring shall be responsible for:

a) Reviewing the organizational structure of departments, standard norms, job positions within each team, workshop, and department;

b) Based on the strategic orientation for the development of the company after restructuring, developing a labor utilization plan in accordance with Article 46 of the Labor Code to ensure effective labor utilization;

c) Coordinating with the representative organization of workers at the workplace to organize a Workers' Meeting to gather opinions on the labor utilization plan and surplus labor resolution, submitting it to the competent authority for approval; publicly announcing the labor utilization plan and surplus labor resolution within the company;

d) Promoting and disseminating policies on surplus labor to all workers in the company;

đ) Implementing benefits for surplus workers in accordance with this Decree; settling accounts in accordance with the law;

e) Reporting to the owner on the implementation of surplus labor policies in accordance with this Decree.

2. The company after restructuring shall be responsible for:

a) Annually evaluating the recruitment and utilization of labor;

b) Paying unemployment assistance and termination benefits to workers transferred from the restructuring company when those workers lose their jobs or terminate their employment at the company after restructuring for actual working time at the company after restructuring and actual working time at the restructuring company, including time worked at other state-owned companies or units transferred to the restructuring company before January 1, 1995 without having received unemployment assistance or termination benefits.

Article 10. Responsibilities of Agencies and Organizations

1. The Ministry of Labor, Invalids and Social Affairs shall be responsible for:

a) The Minister of Labor, War Invalids and Social Affairs shall be responsible for guiding the implementation of this Decree;

b) Inspecting and supervising the implementation of policies for surplus workers as stipulated in this Decree;

c) Annually compiling and reporting to the Prime Minister on the implementation of this Decree;

2. The Ministry of Finance shall be responsible for:

a) Guiding the restructuring company in implementing benefit schemes and settling accounts for the implementation of policies for surplus workers as stipulated in this Decree;

b) Receiving applications, reviewing, and issuing decisions to disburse funds from the Enterprise Restructuring and Development Support Fund to implement policies for surplus workers as stipulated in this Decree;

c) Directing the State Capital Investment Corporation to disburse funds, monitor, and inspect the payment of benefits and settlement of accounts by the restructuring companies under the responsibility of the Enterprise Restructuring and Development Support Fund, and report on the management and use of the Enterprise Restructuring and Development Support Fund for consolidation;

d) Supervising and inspecting the payment of benefits by the Enterprise Restructuring and Development Support Fund for surplus workers;

đ) Cooperating with the Ministry of Labor, War Invalids and Social Affairs in inspecting and supervising the implementation of surplus labor policies as stipulated in this Decree;

e) Annually compiling and reporting to the Prime Minister on the management and use of the Enterprise Restructuring and Development Support Fund, while sending reports to the Ministry of Labor, War Invalids and Social Affairs for consolidation and monitoring;

a) Directing the investment management department to regularly update information on the issuance of government bonds, bonds, bills, promissory notes, deposit certificates, and interest rates for deposits from commercial banks with good operational quality; comparing the amount invested, the amount due for recovery, and the balance of each type of investment and investment target to serve the determination of actual investment interest rates, timely and accurate principal and interest recovery;

a) Guiding the collection of social insurance contributions in accordance with this Decree;

b) Implementing social insurance benefits for workers in accordance with this Decree and guidelines issued by the Ministry of Labor, War Invalids and Social Affairs;

4. Ministries, ministerial-level agencies, government-affiliated agencies, provincial People's Committees, and municipal People's Committees directly under the central government shall be responsible for the restructuring companies under their jurisdiction as follows:

a) Directing the restructuring companies to develop labor utilization plans in accordance with the law and implement policies for surplus workers as stipulated in this Decree;

b) Approving labor utilization plans and surplus labor resolution for each restructuring company in accordance with Article 1 of this Decree;

c) Establishing organizations to resolve policies for surplus workers in companies undergoing dissolution or bankruptcy;

d) Inspecting and supervising the implementation of policies for surplus workers by restructuring companies as stipulated in this Decree;

đ) Annually reporting to the Ministry of Labor, War Invalids and Social Affairs on the resolution of policies for surplus workers to compile and report to the Prime Minister;

5. Request the Vietnam General Confederation of Labor

a) Directing the representative organizations of workers at the workplace to cooperate with the restructuring company in promoting and disseminating labor surplus policies in accordance with the law; participating in opinions on labor utilization plans; supervising the implementation of benefit payments for surplus workers at the restructuring company;

b) Cooperating with the Ministry of Labor, War Invalids and Social Affairs, the Ministry of Finance, and the owner in inspecting and supervising the implementation of policies for surplus workers by the restructuring company as stipulated in this Decree.

Article 11. Effective Date

1. This Decree takes effect from September 15, 2015.

Government Decree No. 91/2010/NĐ-CP dated August 20, 2010, which stipulates policies for surplus workers during the restructuring of state-owned single-member limited liability companies, ceases to be effective from the date this Decree takes effect.

For restructuring companies that have been approved by the competent authority for surplus labor resolution plans prior to the effective date of this Decree, they shall continue to implement Government Decree No. 91/2010/NĐ-CP dated August 20, 2010, which stipulates policies for surplus workers during the restructuring of state-owned single-member limited liability companies, and related guiding documents.

2. For a single-member limited liability company owned by a political organization or a political-social organization being restructured according to a plan approved by the competent authority, the provisions of this Decree shall be applied to resolve policies for surplus workers. The funding source for resolving policies for surplus workers from the sale of initial shares, the sale of enterprises for companies undergoing shareholding reform, the sale, or other lawful sources as prescribed by law for companies undergoing dissolution or bankruptcy, or from the lawful funds of the owner for companies converting to a limited liability company with two or more members, converting to a public service unit, merging, consolidating, splitting, or separating; if insufficient, it may be supplemented from other lawful sources determined by the owner.

3. For state-owned companies, agricultural companies, forestry companies that have not yet converted into a single-member limited liability company owned by the State, now being restructured according to Article 1 of this Decree, they shall implement policies for surplus workers according to this Decree.

4. For public service units undergoing shareholding reform according to the decision of the competent authority, the provisions of this Decree shall be applied to resolve policies for surplus workers and officials who cannot be assigned work in the joint-stock company. The funding source for resolving policies for surplus workers and officials who cannot be assigned work in the joint-stock company shall be taken from the proceeds of the initial share sale when implementing the shareholding reform of the public service unit; if insufficient, it may be supplemented from the Enterprise Restructuring and Development Support Fund.

5. For a single-member limited liability company owned by the parent company of a state economic group, the parent company of a state corporation, or the parent company in a group of parent-child companies as stipulated in Article 1 of this Decree, when restructuring according to a plan approved by the competent authority, the provisions of this Decree shall be applied to implement policies for surplus workers. The funding source for resolving policies for surplus workers and representatives of the company's capital shall be implemented according to the provisions of Article 8 of this Decree. If insufficient, it may be supplemented from the Enterprise Restructuring Support Fund at the state economic group, state corporation, or parent company in a group of parent-child companies.

6. During the period when the company is restructuring and has not yet established a salary scale and wage table according to Decree No. 49/2013/ND-CP dated May 14, 2013, of the Government detailing the implementation of certain articles of the Labor Code on wages before January 1, 2016, the wage basis for calculating the benefits prescribed in Point b Clause 1, Clause 3, Clause 4, Clause 5 Article 3 and Article 4 of this Decree is the monthly social insurance wage as prescribed and guided by the competent state authority.

7. In addition to the policies prescribed in Articles 3, 4, and 5 of this Decree, it is encouraged for single-member limited liability companies owned by the State undergoing restructuring according to Article 1 of this Decree to provide additional support to surplus workers from the lawful funds of the company after reaching agreement with the labor union representative organization at the company.

8. Ministers, Heads of ministerial-level agencies, Heads of government-affiliated agencies, Chairmen of provincial People's Committees under central cities, Councils of Members of state economic groups, state corporations are responsible for implementing this Decree./.