Decree No. 94/2005/ND-CP On Resolving the Rights of Workers in Enterprises and Cooperatives Declared Bankrupt

DECREE

Regarding the settlement of employee benefits
at enterprises and cooperatives declared bankrupt

THE GOVERNMENT

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

Pursuant to the Bankruptcy Law dated June 15, 2004;

Pursuant to the Labor Code on June 23, 1994; Law Amending and Supplementing Certain Articles of the Labor Code on April 2, 2002;

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

DECREE:

Clause 4 of Article 6This Decree shall apply to employees of enterprises, cooperatives, and Cooperative Unions (hereinafter referred to collectively as enterprises and cooperatives) that have been declared bankrupt by the People's Court with jurisdiction as stipulated in Article 7 of the Bankruptcy Law dated June 15, 2004.

12/2025/TT-BNNMT dated June 19, 2025 issued by the Minister of Agriculture and EnvironmentWhen enterprises and cooperatives have a decision declaring bankruptcy, the following debts related to employee benefits must be settled:

1. Debts owed by enterprises and cooperatives to employees:

a) Wages and allowances (if any) are the amounts remaining after deducting advance wage payments made by enterprises and cooperatives to employees up to the time when the employees cease work;

b) Severance pay is the amount that employees are entitled to according to Clause 1, Article 42 of the Labor Code;

c) Medical expenses are the amounts that enterprises and cooperatives must cover for employees who suffer from workplace accidents or occupational diseases from initial first aid through stable treatment, as stipulated in Clause 2, Article 107 of the Labor Code;

d) Compensation or assistance for workplace accidents or occupational diseases is the amount that enterprises and cooperatives must compensate or assist employees whose ability to work has been reduced by 5% or more, or the relatives of deceased employees due to workplace accidents or occupational diseases, as stipulated in Clause 3, Article 107 of the Labor Code and Article 11 of Decree No. 06/CP dated January 20, 1995 of the Government detailing certain provisions of the Labor Code on labor safety and hygiene, which has been amended and supplemented by Decree No. 110/2002/NĐ-CP dated December 27, 2002 of the Government;

đ) Other benefits under collective agreements and labor contracts (if any) are the benefits agreed upon in labor contracts and collective labor agreements that enterprises and cooperatives have not paid or have not fully paid to employees;

2. Debts owed to social insurance agencies are the amounts that enterprises and cooperatives have not paid or have not fully paid to social insurance agencies as prescribed in the Social Insurance Regulations.

Article 3. When enterprises and cooperatives declare bankruptcy, employees are entitled to severance pay, with each year of service entitling the employee to half a month's salary plus allowances (if any).

The period of service for calculating severance pay is calculated up to the time the employee ceases work, in accordance with Clause 3 and Clause 5, Article 14 of 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.

The salary plus allowances (if any) for calculating severance pay shall be applied as prescribed in Article 15 of Decree No. 114/2002/NĐ-CP dated December 31, 2002 of the Government detailing and guiding the implementation of certain provisions of the Labor Code on wages.

For state-owned enterprises declared bankrupt during the period when Decree No. 41/2002/NĐ-CP dated April 11, 2002 of the Government on policies for redundant employees due to restructuring of state-owned enterprises, which has been amended and supplemented by Decree No. 155/2004/NĐ-CP dated August 10, 2004 of the Government, is in effect, employees shall enjoy the benefits as prescribed in that Decree.

Article 4.Employees and creditors related to employee benefits are obligated to submit claim forms as prescribed in Clause 1, Article 51 of the Bankruptcy Law, specifically as follows:

1. Employees, including those temporarily suspended from labor contracts, must declare all amounts still owed by enterprises and cooperatives to themselves.

2. Enterprises and cooperatives must declare all amounts still owed by employees to themselves.

3. Social insurance agencies must issue certificates regarding the amounts still owed by enterprises and cooperatives for social insurance, confirmed by the enterprises and cooperatives.

4. Documents attached to the claim form to prove the debts include: labor contracts, collective labor agreements, payroll books of enterprises and cooperatives, attendance records, product acceptance reports, wage payment statements, social insurance revenue and expenditure vouchers, and other relevant documents.

Article 5.Payment plan for debts:

1. In cases where the remaining value of assets of enterprises and cooperatives after deducting bankruptcy fees is sufficient to settle the debts specified in Article 2 of this Decree, each employee and social insurance agency will be fully paid their debts.

2. In cases where the remaining value of assets of enterprises and cooperatives after deducting bankruptcy fees is insufficient to settle the debts, employees and social insurance agencies will be paid their respective debts proportionally.

Article 6.When enterprises and cooperatives declare bankruptcy, the benefits of employees injured in workplace accidents or suffering from occupational diseases are resolved as follows:

1. In cases where the deadline for payment has arrived and employees injured in workplace accidents or suffering from occupational diseases have died or have been stably treated with a conclusion from the Medical Appraisal Board on the degree of reduction in working capacity, the asset management and liquidation team will pay the employees or their relatives according to points c and d, Clause 1, Article 2 of this Decree.

2. In case the payment deadline has expired but the worker who has been involved in a workplace accident or occupational disease is still undergoing treatment, the asset management and liquidation organization shall work with the healthcare facility where the worker is being treated to temporarily determine the treatment costs and the degree of labor capacity reduction of the worker. After calculating the amount of money according to points c and d, Clause 1, Article 2 of this Decree, the asset management and liquidation organization shall transfer that amount into the account of the Department of Labor, Invalids, and Social Affairs where the enterprise or cooperative has its main office (hereinafter referred to collectively as the Department of Labor, Invalids, and Social Affairs) and authorize the Department of Labor, Invalids, and Social Affairs to pay the worker when the treatment is completed and there is a conclusion from the Medical Appraisal Board.

If the worker dies or the Medical Appraisal Board concludes that the worker's labor capacity has been reduced by 5% or more, the Department of Labor, Invalids, and Social Affairs shall pay the worker or their relatives.

If the amount paid to the worker according to the provisions of Clause 2 of this Article remains surplus, the Department of Labor, Invalids, and Social Affairs shall return it to the owner of the enterprise or cooperative within thirty days from the date of the Medical Appraisal Board's conclusion.

Article 7. When the enterprise or cooperative makes a decision to declare bankruptcy, workers performing military service or other civic duties and other workers subject to temporary suspension of employment contracts shall be entitled to severance benefits as stipulated in Article 3 of this Decree.

When the payment deadline arrives and the worker comes to collect, the asset management and liquidation organization shall directly pay the worker. If the payment deadline expires and the worker has not had the opportunity to come and collect, the asset management and liquidation organization shall transfer the money into the account of the Department of Labor, Invalids, and Social Affairs and authorize the Department of Labor, Invalids, and Social Affairs to pay the worker.

Article 8. Payment of debts to workers who are under temporary detention or arrest shall be carried out as follows:

1. When the enterprise or cooperative makes a decision to declare bankruptcy, workers under temporary detention or arrest shall enjoy the following rights:

a) Advance payment of wages for the period of temporary detention or arrest before the enterprise or cooperative makes a decision to declare bankruptcy, in accordance with Article 13 of Decree No. 114/2002/NĐ-CP dated December 31, 2002 of the Government detailing and guiding the implementation of certain provisions of the Labor Code on wages;

b) Severance pay as stipulated in Article 3 of this Decree, except for those detained or arrested due to theft, embezzlement, disclosure of technological secrets, business secrets, or other actions causing serious damage to the assets or interests of the enterprise.

2. When the payment deadline arrives and the worker has completed the period of temporary detention or arrest, the asset management and liquidation organization shall directly pay the worker. If the payment deadline expires and the worker is still under temporary detention or arrest, the asset management and liquidation organization shall transfer the amount specified in Clause 1 of this Article into the account of the Department of Labor, Invalids, and Social Affairs where the enterprise or cooperative has its main office and authorize the Department of Labor, Invalids, and Social Affairs to pay the worker upon completion of the period of temporary detention or arrest.

Article 9. The asset management and liquidation organization shall be responsible for paying each worker or their relatives once all debts as stipulated in this Decree. In cases where authorization is given to the Department of Labor, Invalids, and Social Affairs to make payments, a list recording the amount owed to each worker must be sent and the money transferred into the account as prescribed in Articles 6, 7, and 8 of this Decree. For social insurance debts, the asset management and liquidation organization shall transfer the funds into the account of the social insurance agency where the enterprise or cooperative pays social insurance contributions.

Article 10.The social insurance agency, where the enterprise or cooperative pays social insurance contributions, shall be responsible for resolving social insurance benefits for workers in accordance with the Social Insurance Regulations.

Article 11. The Department of Labor - Invalids and Social Affairs shall coordinate with the Trade Union at the same level to be responsible for monitoring, inspecting, and supervising the settlement of benefits for workers in enterprises and cooperatives operating within its jurisdiction that have declared bankruptcy, and to perform tasks delegated by the management and liquidation committee pursuant to the provisions of this Decree.

Article 12.This Decree shall take effect fifteen days from the date of publication in the Official Gazette and shall replace Government Decree No. 92/CP dated December 19, 1995 on the settlement of benefits for workers in enterprises declared bankrupt.

Article 13. Ministers, Heads of ministerial-level agencies, Heads of government agencies, Chairmen of provincial people's committees under central cities, enterprises, organizations, and individuals related to this matter shall be responsible for implementing this Decree ./.