Decree No. 91/2010/ND-CP on policies for redundant workers when reorganizing state-owned joint stock companies with single-member structures

DECREE

Regulations on policies for surplus workers when restructuring a state-owned limited liability company with one member

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THE GOVERNMENT

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

Based on the Labor Code dated June 23, 1994; the Law Amending and Supplementing Certain Articles of the Labor Code dated April 2, 2002; the Law Amending and Supplementing Certain Articles of the Labor Code dated June 29, 2006;

Pursuant to the Enterprise Law dated November 29, 2005;

Pursuant to the Social Insurance Law dated June 29, 2006;

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

DECREE:

Article 1. Scope of Regulation

This Decree stipulates policies for surplus workers in a state-owned limited liability company with one member, or a limited liability company with one member owned by political organizations or political-social organizations (hereinafter referred to as a state-owned limited liability company with one member), which is converted from a state-owned enterprise or an enterprise under political organizations or political-social organizations according to the regulations on converting to a limited liability company with one member but has not yet resolved surplus worker policies pursuant to Decree No. 41/2002/NĐ-CP dated April 11, 2002, Decree No. 155/2004/NĐ-CP dated August 10, 2004, Resolution No. 07/2007/NQ-CP dated February 6, 2007, Decree No. 110/2007/NĐ-CP dated June 26, 2007 of the Government, now continues to be restructured according to the plan approved by the competent authority, including:

1. Shareholding, transfer, sale.

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

3. Conversion into a public service unit.

4. Dissolution, bankruptcy.

Article 2. Applicability

1. Surplus workers currently performing indefinite-term labor contracts or fixed-term labor contracts from twelve months to thirty-six months in a limited liability company with one member as prescribed in Article 1 of this Decree, including:

a) Workers hired last into the company prescribed in Clauses 1, 2, and 3 of Article 1 of this Decree before April 21, 1998 (the date of implementation of Directive No. 20/1998/CT-TTg of the Prime Minister on accelerating the restructuring and reform of state-owned enterprises), including:

- Workers who are still working, when restructuring, the company has taken all measures to create jobs, but cannot arrange work;

- Workers listed in the regular roster of the company but without work (awaiting work), at the time of restructuring, the company still cannot arrange work.

b) Workers hired last into the company prescribed in Clause 4 of Article 1 of this Decree before April 26, 2002 (the effective date of Decree No. 41/2002/NĐ-CP dated April 11, 2002 of the Government).

c) Workers listed in the regular roster of the company converted from agricultural companies, forestry companies, state farms, state forestry farms, hired last into the company before April 21, 1998 (except for workers of these companies undergoing dissolution, the last hiring date shall be determined according to point b, Clause 1 of this Article), at the time of restructuring, the company has taken all measures to create jobs, but cannot arrange work and are not subject to the land allocation or forest allocation policy of the company.

2. Organizations and individuals related to the implementation of policies for surplus workers due to the restructuring of a state-owned limited liability company with one member.

Article 3. Policy towards surplus workers currently performing indefinite-term labor contracts

1. At the time when the competent authority approves the labor restructuring plan or the Court decides to initiate bankruptcy proceedings, male workers aged 55 or older and female workers aged 50 or older with at least 20 years of social insurance contributions shall be entitled to retirement pension as stipulated in Clause 1, Article 50 of the Social Insurance Law.

2. Surplus workers under Paragraph 1 of this Article, aged between 55 and under 60 for males and between 50 and under 55 for females, shall be entitled to additional allowances as follows:

a) Three months' salary and wage supplements (if applicable) for each year (full 12 months, excluding partial months) of early retirement compared to the provisions set out in Point a, Clause 1, Article 50 of the Social Insurance Law.

b) Five months' salary and wage supplements (if applicable) for the first 20 years of work with social insurance contributions. For each year from the 21st year onwards, an additional half month's salary and wage supplement (if applicable) will be provided.

3. If they meet the retirement age requirement as specified in Point a, Clause 1, Article 50 of the Social Insurance Law but are short of up to six months of social insurance contributions to qualify for a pension, the State will make a one-time payment for the remaining months at the combined monthly contribution rate of the worker and the employer based on the last month's salary and wages before retirement into the retirement and death benefit fund to settle the retirement benefits.

4. The remaining individuals shall terminate their labor contracts and be entitled to the following benefits:

a) An allowance of one month's salary and wage supplements (if applicable) for each year (full 12 months, partial months carried forward to the next period) of actual work (with attendance recorded in the payroll) in the state sector (state-owned enterprises; state administrative agencies, public institutions of the state, armed forces units receiving salaries from the state budget; state-owned farms and forests), excluding periods during which the worker has received severance pay, unemployment assistance, and unemployment insurance contributions as prescribed, but not less than two months' salary and wage supplements (if applicable).

b) Additional support of one month's salary and wage supplements (if applicable) for each year (full 12 months, partial months carried forward to the next period) of actual work in the state sector.

c) Entitlement to six months' salary and wage supplements (if applicable) to seek employment.

d) Workers who wish to undergo vocational training shall be eligible for up to six months of training at vocational training centers as announced by the state management agency for labor in provinces and centrally-administered cities.

Article 4. Policy towards surplus workers currently performing fixed-term labor contracts lasting from 12 to 36 months

Surplus workers currently performing fixed-term labor contracts lasting from 12 to 36 months shall terminate their labor contracts and be entitled to the following benefits:

1. An allowance of one month's salary and wage supplements (if applicable) for each year of actual work in the state sector, excluding periods during which the worker has received severance pay, unemployment assistance, and unemployment insurance contributions as prescribed.

2. An allowance of seventy percent of the salary and wage supplements (if applicable) recorded in the labor contract for the remaining months of the unfulfilled fixed-term labor contract, but not exceeding twelve months; if this allowance is lower than the general minimum wage at the time of termination, it shall be calculated based on the general minimum wage.

Article 5. Repayment of Subsidies Upon Reemployment

Workers who have received subsidies under Clause 4, Article 3 of this Decree and are reemployed at the company that previously terminated their employment must return the full amount received. In cases where they are reemployed at another state-owned enterprise or public agency, or when the company allocates land or forest to them according to regulations, they must return the subsidy amount specified in Point b, Clause 4, Article 3 of this Decree. The state-owned enterprises or public agencies that reemploy surplus workers or allocate land or forest must collect the aforementioned amount from the workers and remit it to the Enterprise Restructuring Support Fund at the State Capital Investment Corporation.

Article 6. Wages and Allowances for Calculating Benefits

1. Wages and allowances (if applicable), serving as the basis for calculating benefits as stipulated in Clause 2, Article 3 of this Decree, shall be calculated based on the average wage and allowance (if applicable) of the last five years before retirement. If there are fewer than five years, the calculation will be based on the average wage and allowance (if applicable) of the years worked within the state sector.

The wage coefficient and allowance coefficient prior to October 1, 2004, shall be calculated according to the wage coefficient and allowance coefficient prescribed in Decree No. 25/CP dated May 23, 1993, of the Government regarding the temporary wage system for civil servants, administrative officials, and armed forces personnel, and Decree No. 26/CP dated May 23, 1993, of the Government regarding the temporary wage system in enterprises; from October 1, 2004 onwards, they shall be calculated according to the wage coefficient and allowance coefficient prescribed in Decree No. 204/2004/NĐ-CP dated December 14, 2004, of the Government on the wage system for cadres, civil servants, officials, and armed forces personnel, Decree No. 205/2004/NĐ-CP dated December 14, 2004, of the Government on the wage scale and allowance system in state-owned companies, Decree No. 86/2007/NĐ-CP dated May 28, 2007, of the Government on labor management and wages in wholly state-owned limited liability companies, Decree No. 141/2007/NĐ-CP dated September 5, 2007, of the Government on the wage system for parent companies owned by the state and subsidiaries in economic groups, and Decree No. 162/2006/NĐ-CP dated December 28, 2006, of the Government on the wage system and uniform allowance for cadres, civil servants, and officials of the State Audit Office and preferential treatment for state auditors.

2. Wages and allowances (if applicable) serving as the basis for calculating benefits as stipulated in Points a and b, Clause 4, Article 3; Clause 1, Article 4 of this Decree shall be the wages and allowances (if applicable) according to the state wage scale, calculated according to each phase of wage coefficient adjustment.

The wage coefficient for calculating benefits for the period before October 1, 2004, is the average coefficient of the six consecutive months immediately preceding September 30, 2004, according to Decree No. 25/CP and Decree No. 26/CP dated May 23, 1993, of the Government; for the period from October 1, 2004 onwards, it is the average coefficient of the six consecutive months immediately preceding the date of retirement according to Decree No. 204/2004/NĐ-CP, Decree No. 205/2004/NĐ-CP dated December 14, 2004, Decree No. 86/2007/NĐ-CP dated May 28, 2007, Decree No. 141/2007/NĐ-CP dated September 5, 2007, and Decree No. 162/2006/NĐ-CP dated December 28, 2006, of the Government.

3. The general minimum wage for calculating benefits for the period before January 1, 2003, is 210,000 VND; for the period from January 1, 2003 to September 30, 2005, it is 290,000 VND; for the period from October 1, 2005 to September 30, 2006, it is 350,000 VND; for the period from October 1, 2006 to December 31, 2007, it is 450,000 VND; for the period from January 1, 2008 to April 30, 2009, it is 540,000 VND; for the period from May 1, 2009 to April 30, 2010, it is 650,000 VND; and for the period from May 1, 2010 to the point of the next general minimum wage adjustment, it is 730,000 VND.

The general minimum wage adjusted by the Government in subsequent periods shall be applied to calculate benefits for surplus workers corresponding to each adjustment period.

4. Wages and allowances (if applicable) serving as the basis for calculating benefits as stipulated in Point c, Clause 4, Article 3 and Clause 2, Article 4 of this Decree shall be the wages according to the state wage scale, calculated at the time of retirement.

Article 7. Sources of funds for supporting surplus labor resulting from the restructuring of state-owned limited liability companies with one member

1. For companies implementing shareholding reform, selling enterprises, the source of funds to address policies for surplus labor shall be derived from the proceeds of the initial public offering of shares and the sale of enterprises. In cases where this is insufficient, it will be supplemented from:

a) The Enterprise Restructuring Support Fund at the State Capital Investment Corporation for companies under ministries, ministerial-level agencies, government agencies, provincial people's committees, centrally-administered municipal people's committees; entire holding corporations, entire groups, and parent companies.

b) The Enterprise Restructuring Support Fund at economic groups, state-owned holding corporations, and parent companies for companies under economic groups, state-owned holding corporations, and parent companies. In cases where this is insufficient, it will be supplemented from the Enterprise Restructuring Support Fund at the State Capital Investment Corporation.

2. For companies implementing transfer, dissolution, bankruptcy, conversion into a limited liability company with two or more members, or transformation into a public institution, the source of funds is:

a) The Enterprise Restructuring Support Fund at the State Capital Investment Corporation disburses for companies under ministries, ministerial-level agencies, government agencies, provincial people's committees, centrally-administered municipal people's committees; entire holding corporations, entire groups, and parent companies.

b) The Enterprise Restructuring Support Fund of economic groups and state-owned holding corporations disburses for enterprises under economic groups and state-owned holding corporations.

Article 8. Responsibilities for paying benefits to surplus workers

1. A state-owned limited liability company with one member is responsible for resolving the provisions set out in point a, Clause 4, Article 3, Clause 1, Article 4 of this Decree, and termination and unemployment benefits according to the Labor Code for workers not covered by this Decree from the Unemployment Compensation Reserve Fund. In cases where this is insufficient, support will be provided from the Enterprise Restructuring Support Fund according to the provisions of Clause 1, Article 7 of this Decree.

2. The Social Insurance Fund is responsible for resolving social insurance benefits according to the Social Insurance Law and the provisions of this Decree.

3. The Enterprise Restructuring Support Fund at the level specified in Article 7 of this Decree is responsible for disbursing:

a) Benefits as stipulated in Clause 2, Clause 3, points b, c, and d, Clause 4, Article 3, and Clause 2, Article 4 of this Decree.

b) The amount that the Enterprise Restructuring Support Fund supports according to the provisions of Clause 1 of this Article (if applicable).

Article 9. Responsibilities of state-owned limited liability companies with one member

1. Develop labor utilization plans, determine the number of necessary workers based on production and business requirements, and develop plans to resolve surplus labor.

2. Coordinate with trade unions within the company to promote and disseminate Party and State policies, implement democratic regulations within the company; publicly announce labor restructuring plans and lists of surplus workers.

3. Resolve policies and benefits for surplus workers according to this Decree; implement payment and settlement of funds for compensation to surplus workers according to the law.

4. Resolve benefits for surplus workers hired by the company who are not covered by this Decree using the company's own funds, agricultural and forestry farms.

Article 10. Responsibilities of agencies and organizations

1. Ministry of Labor, Invalids and Social Affairs:

a) Guide and inspect the implementation of policies and benefits for redundant workers as stipulated in this Decree.

b) Participate with relevant agencies in labor restructuring plans in schemes for restructuring, modernizing, developing, and enhancing the efficiency of state-owned limited liability companies.

c) Periodically compile and report to the Prime Minister on the implementation of this Decree.

2. Ministry of Finance:

a) Develop capital plans and submit measures to ensure capital sources for implementing policies towards redundant workers to the Prime Minister.

b) Receive applications, review, and issue decisions on disbursing the Enterprise Restructuring Support Fund at the State Capital Investment Corporation to resolve policies for redundant workers in state-owned limited liability companies undergoing restructuring and conversion.

c) Supervise and inspect the disbursement of the Enterprise Restructuring Support Fund for resolving policies for redundant workers.

d) Periodically compile and report to the Prime Minister on the management and utilization of the Enterprise Restructuring Support Fund.

3. State Capital Investment Corporation, economic groups, state-owned corporations, parent companies:

a) Implement fund disbursements to state-owned limited liability companies under their ownership for which the Enterprise Restructuring Support Fund is responsible for resolving policies for redundant workers; implement the recovery of expenses according to Article 5 of this Decree.

b) Monitor and inspect the payment of allowances and settlement of payment expenses for units for which the Enterprise Restructuring Support Fund is responsible.

c) Periodically settle accounts and report to the Ministry of Finance on the management and utilization of the Enterprise Restructuring Support Fund.

4. Vietnam Social Security

a) Guide the collection of social insurance according to this Decree.

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

5. Ministries, ministerial-level agencies, government-affiliated agencies, provincial People's Committees, centrally governed city People's Committees, political and socio-political organizations, economic groups, state-owned corporations established by the Prime Minister's decision:

a) Direct companies to develop labor restructuring plans and implement policies and benefits for redundant workers.

b) Approve labor redundancy resolution schemes according to the principle of one-time implementation for each company as stipulated in Article 1 of this Decree.

c) Establish organizations to resolve policies for redundant workers in companies undergoing dissolution or bankruptcy.

d) Periodically report to the Government through the Ministry of Labor, Invalids and Social Affairs on the resolution of policies for redundant workers.

6. Request the Vietnam General Confederation of Labor

a) Participate in opinions with state agencies regarding the guidance on implementing policies for redundant workers.

b) Direct trade unions at all levels to cooperate with unit heads to publicize and explain to workers about the Party and State's policies and regulations for resolving benefits for redundant workers as prescribed by law.

c) Issue mechanisms for trade union supervision from central to grassroots levels in organizing the implementation of benefits for redundant workers.

Article 11. Implementation Provisions

1. This Decree takes effect from October 10, 2010.

2. For state-owned limited liability companies operating in water resource exploitation that undergo restructuring and change management methods when implementing the exemption of water resource fees according to Decree No. 143/2003/ND-CP dated November 28, 2003, which has been amended and supplemented by Decree No. 115/2008/ND-CP dated November 14, 2008 of the Government detailing the implementation of certain provisions of the Water Resource Exploitation and Protection Law, if redundant labor arises, redundant workers shall enjoy policies as prescribed in this Decree. The funds to resolve policies for redundant workers shall be taken from the Enterprise Restructuring Support Fund at the State Capital Investment Corporation.

3. State-owned companies; state-owned forestry and farm enterprises whose redundancy resolution plans were approved by competent authorities before June 30, 2010 shall implement Decree No. 110/2007/ND-CP dated June 26, 2007 of the Government on policies for redundant workers due to state-owned company restructuring.

In cases where state-owned companies convert into state-owned limited liability companies according to Article 7 or implement shareholding according to Clause 1 of Article 34 of Decree No. 25/2010/ND-CP dated March 19, 2010 of the Government on converting state-owned companies into state-owned limited liability companies and managing state-owned limited liability companies, if they have not received approval decisions on labor redundancy resolution plans from competent authorities from July 1, 2010 until the effective date of this Decree, they will continue to resolve redundancy policies according to Decree No. 110/2007/ND-CP mentioned above.

4. Members of the Board of Directors, Chairman, General Director, Director, Deputy General Director, Deputy Director, Chief Accountant, Auditor of state-owned limited liability companies undergoing restructuring but not continuing to work in those businesses or the state sector shall implement the reduction in staff policy as prescribed in Decree No. 132/2007/ND-CP dated August 8, 2007 of the Government on the reduction in staff policy.

5. Apart from the benefits prescribed in Articles 3 and 4 of this Decree, state-owned limited liability companies undergoing restructuring according to Article 1 of this Decree may provide additional support to redundant workers from legitimate company funds after reaching consensus with the grassroots Trade Union Executive Committee.

Article 12. The Ministers, Heads of ministerial-level agencies, Heads of government agencies, Chairpersons of provincial People's Committees under the central government, Economic Groups, and State-owned Corporations established by the Prime Minister shall be responsible for implementing this Decree./.