Decree 97/2022/ND-CP policies toward laid-off employees upon reorganization of single-member limited liability companies with 100% state-owned charter capital

DECREE

On the policies toward laid-off employees upon ownership transformation or reorganization of
single-member limited liability companies with 100% state-owned charter capital

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Pursuant to the Law on Organization of the Government dated June 19, 2015; Law on Amending and Supplementing a Number of Articles of the Law on Organization of the Government and the Law on Organization of Local Administration dated November 22, 2019;

Pursuant to the Labor Code dated November 20, 2019;

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

The Government promulgates the Decree on the policies toward laid-off employees upon ownership transformation or reorganization of single-member limited liability companies with 100% state-owned charter capital.

Chapter I

GENERAL PROVISIONS

Article 1. Scope of regulation

This Decree defines the policies toward laid-off employees in single-member limited liability companies with 100% state-owned charter capital (including parent companies of state economic groups; parent companies of state corporations; parent companies in parent company - subsidiary groups; independent companies) upon ownership transformation or reorganization under a plan approved by a competent agency (hereinafter referred to as enterprises to be reorganized), including:

1. Equitization or sale of the whole enterprise.

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

3. Transformation into a non-business unit.

4. Merger, consolidation, division or splitting.

5. Dissolution or bankruptcy.

Article 2. Subjects of application

1. The laid-off employees in enterprises to be reorganized specified in Article 1 of this Decree are:

a) Employees that work under labor contracts, are named in the list of  employees and last recruited in enterprises to be reorganized specified in Clauses 1, 2, 3 and 4 Article 1 of this Decree before April 21, 1998 (the time of implementation of the Prime Minister’s Directive No. 20/1998/CT-TTg on strengthening the reorganization and renewal of state enterprises), and to whom the enterprises can not assign another job at the reorganization time; that work in enterprises in the fields of agriculture, forestry and to whom the enterprises can not assign another job and not allocate with land or forests under contracts at the reorganization time;

b) Employees working under labor contracts, named in the list of employees and last recruited in enterprises to be reorganized specified in Clause 5 Article 1 of this Decree before April 26, 2002 (the effective date of the Government’s Decree No. 41/2002/ND-CP dated April 11, 2002 on policies for laid-off employees upon reorganization of state enterprises);

c) Employees that work under labor contracts, are named in the list of employees and last recruited in enterprises to be reorganized as specified in Clauses 1, 2, 3 and 4 Article 1 of this Decree from April 21, 1998 onward, and to whom the enterprises can not assign another job at the reorganization time;

d) Employees working under labor contracts, named in the list of employees and last recruited in enterprises to be reorganized as defined in Clause 5 Article 1 of this Decree from April 26, 2002 onward;

dd) Employees working under labor contracts, authorized in writing by enterprises to be reorganized to exercise the rights and perform the responsibilities of the enterprises with regard to the enterprises’ capital amount invested in another enterprise and working full-time in such enterprises’ management and executive boards (hereinafter referred to as representatives of enterprises' capital contributions), including: representatives of capital contributions of enterprises to be reorganized defined in Clauses 1, 2, 3 and 4 Article 1 of this Decree, and to whom the enterprises can not assign another job at the time of reorganization and expiration of authorization period; representatives of capital contributions of enterprises to be reorganized specified Clause 5 Article 1 of this Decree.

2. Enterprises to be reorganized specified in Article 1 of this Decree.

3. Agencies representing the owners of enterprises to be reorganized.

4. Other agencies, organizations and individuals related to the implementation of this Decree.

Chapter II

POLICIES TOWARD LAID-OFF EMPLOYEES

Article 3. Policies toward laid-off employees last recruited before April 21, 1998 or before April 26, 2002

Laid-off employees specified at Points a and b Clause 1 Article 2 of this Decree are entitled to the following policies:

1. Laid-off employees being from full 01 year to full 05 years younger than the retirement age specified in Clause 2 Article 169 of the Labor Code and Article 4 of the Government’s Decree No. 135/2020/ND-CP dated November 18, 2020 on prescribing retirement ages (hereinafter referred to as Decree No. 135/2020/ND-CP) and having paid compulsory social insurance premiums for at least full 20 years shall be entitled to enjoy pension and the following regimes:

a) Their pension rate shall not be reduced due to early retirement;

b) An allowance equal to 3 months’ wage for each year (year of full 12 months, the remainder is exclusive) of early retirement in comparison with the retirement age specified in Clause 2 Article 169 of the Labor Code and Article 4 of Decree No. 135/2020/ND-CP;

c) A support amount equal to 0.4 of the average of minimum monthly wage levels for each working year for which social insurance premiums have been paid.

2. Laid-off employees being under 01 year younger than the retirement age specified in Clause 2 Article 169 of the Labor Code and Article 4 of Decree No. 135/2020/ND-CP and having paid compulsory social insurance premiums for at least full 20 years shall be entitled to enjoy pension and the following regimes:

a) Their pension rate shall not be reduced due to early retirement;

b) A support amount equal to 0.2 of the average of minimum monthly wage levels for each working year  for which social insurance premiums have been paid.

3. In case laid-off employees reach the retirement age specified in Clause 2 Article 169 of the Labor Code and Article 4 of Decree No. 135/2020/ND-CP but their period of compulsory social insurance premium payment is short of 6 months at most for pension enjoyment, the State shall pay a lump-sum amount for these months to the retirement and survivorship allowance fund for settlement of retirement regime. The lump-sum amount paid by the State for the above-mentioned months shall be equal to the number of months to be paid multiplied by employees and employers’ total social insurance premiums to the retirement and survivorship allowance fund of the month before they cease working.

4. For laid-off employees specified at Point a Clause 1 Article 2 of this Decree that are not eligible to enjoy the regimes specified in Clauses 1, 2 and 3 of this Article, the termination of labor contracts shall be carried out and they shall be entitled to the following regimes:

a) Job loss allowance specified in Article 47 of the Labor Code and Clause 2 Article 8 of the Government’s Decree No. 145/2020/ND-CP dated December 14, 2020 detailing and guiding the implementation of a number of articles of the Labor Code regarding working conditions and industrial relations (hereinafter referred to as Decree No. 145/2020/ND-CP);

b) A support amount equal to 0.05 of the average of minimum monthly wage levels for each year of working in the enterprises to be reorganized.

5. For laid-off employees specified at Point b Clause 1 Article 2 of this Decree that are not eligible to enjoy the regimes specified in Clauses 1, 2 and 3 of this Article, the termination of labor contracts shall be carried out and they shall be entitled to the following regimes:

a) Severance allowance specified in Article 46 of the Labor Code and Clause 1 Article 8 of Decree No. 145/2020/ND-CP;

b) A support amount equal to 0.2 of monthly wage for each year of working in the enterprises to be reorganized.

Article 4. Policies toward laid-off employees last recruited from April 21, 1998 or from April 26, 2002 onward

Laid-off employees specified at Points c and d Clause 1 Article 2 of this Decree are entitled to the following policies:

1. Job loss allowance specified in Article 47 of the Labor Code and Clause 2 Article 8 of Decree No. 145/2020/ND-CP, for employees of enterprises to be reorganized defined in Clauses 1, 2, 3 and 4 Article 1 of this Decree.

2. Severance allowance specified in Article 46 of the Labor Code and Clause 1 Article 8 of Decree No. 145/2020/ND-CP, for employees of enterprises to be reorganized defined in Clause 5 Article 1 of this Decree.

Article 5. Policies toward representatives of enterprises’ capital contributions

1. Representatives of enterprises’ capital contributions defined at Point dd Clause 1 Article 2 of this Decree who are last recruited into an enterprise to be reorganized before April 21, 1998 or before April 26, 2002 are entitled to the policies specified in Article 3 of this Decree.

2. Representatives of enterprises’ capital contributions specified at Point dd Clause 1 Article 2 of this Decree who are last recruited into an enterprise to be reorganized from April 21, 1998 or from April 26, 2002 onward are entitled to the policies specified in Article 4 of this Decree.

Article 6. Working period used for determination of regimes

1. The working period with social insurance premium payment used for calculation of allowance amounts defined at Point c Clause 1 and Point b Clause 2 Article 3 of this Decree is the working period used for determination of compulsory social insurance regime under law provisions on social insurance.

2. The working period used for calculation of job loss allowance, severance allowance specified at Point a Clause 4, Point a Clause 5 Article 3 and Article 4 of this Decree shall comply with Clause 2 Article 47, Clause 2 Article 46 of the Labor Code and Clause 3, Clause 4 Article 8 of Decree No. 145/2020/ND-CP.

3. The working period used for calculation of allowance amounts defined at Point b Clause 4 and Point b Clause 5 Article 3 of this Decree is the employees’ total actual working period in enterprises to be reorganized. The actual working period in enterprises to be reorganized shall comply with Point a Clause 3 and Clause 4 Article 8 of the Decree No. 145/2020/ND-CP.

4. The working period used for calculation of allowance amounts defined at Point c Clause 1, Point b Clause 2, Point b Clause 4 and Point b Clause 5 Article 3 of this Decree shall be counted by year (full 12 months); if the remainder is from full 1 month to full 6 months, the time shall be calculated as 1/2 (half) of working year; if the remainder is over 6 months, the time shall be calculated as one working year.

Article 7. Wage used for determination of regimes

1. Wage used for calculation of allowances specified at Point b Clause 1 Article 3 of this Decree shall be the average of monthly wages on which social insurance premiums are based of 05 last years before the employees cease working.

2. The average of minimum monthly wage levels specified at Point c Clause 1, Point b Clause 2 and Point b Clause 4 Article 3 of this Decree shall be equal to the average of region-based minimum monthly wage levels defined by the Government at the time the employees cease working.

3. Wage used for calculation of job loss allowance or severance allowance specified at Point a Clause 4, Point a Clause 5 Article 3, Article 4 and wage used for calculation of supports defined at Point b Clause 5 Article 3 of this Decree include wage, wage-based allowances and other additional payments for calculation of job loss allowance or severance allowance stated in labor contracts as specified in Article 21 of the Labor Code and guiding documents.

Article 8. Funding sources for implementation of policies toward laid-off employees

1. Funds for implementation of policies toward laid-off employees specified in Article 3 and representatives of enterprises’ capital contributions defined in Clause 1 Article 5 of this Decree shall be as follows:

a) For enterprises to be reorganized defined in Clause 1 Article 1 of this Decree, the funds for implementation of policies shall be revenues from first sale of shares, sale of enterprises; in case of insufficiency, the funds shall be allocated additionally from the state budget in accordance with the Government’s Decree No. 148/2021/ND-CP dated December 31, 2021 on management and use of revenues from transformation of enterprises and public non-business units, revenues from transfer of state capital and the positive difference between the equity of enterprises and their charter capital (hereinafter referred to as Decree No. 148/2021/ND-CP);

b) For enterprises to be reorganized defined in Clauses 2, 3 and 4 Article 1 of this Decree, funding sources for implementation of the policies shall be allocated by the state budget in accordance with the Decree No. 148/2021/ND-CP;

c) For enterprises to be reorganized specified in Clause 5 Article 1 of this Decree, funds for implementation of policies shall be revenues from dissolution or bankruptcy in accordance with law provisions; in case of insufficiency, the funds shall be allocated additionally from the state budget under the Government’s Decree No. 148/2021/ND-CP.

2. Funds for implementation of policies toward laid-off employees specified in Article 4 and representatives of enterprises’ capital contributions defined in Clause 2 Article 5 of this Decree shall be as follows:

a) For enterprises to be reorganized specified in Clauses 1, 2, 3 and 4 Article 1 of this Decree, the funds for implementation of the policies shall be accounted in their production and business expense;

b) For enterprises to be reorganized defined in Clause 5 Article 1 of this Decree, the funds for implementation of policies shall be revenues from dissolution or bankruptcy in accordance with law provisions; in case of insufficiency, the funds shall be allocated additionally from the state budget under the Government’s Decree No. 148/2021/ND-CP.

Chapter III

ORGANIZATION OF IMPLEMENTATION

Article 9. Responsibilities of enterprises to be reorganized

1. Organize propaganda and dissemination of policies toward their laid-off employees before and during the formulation of an employment plan.

2. Formulate an employment plan in accordance with Article 44 of the Labor Code and procedures defined in Appendix I to this Decree.

3. Coordinate with their grassroots-level employees’ representative organizations in collecting opinions about their employment plans and submit them to the owner-representing agencies for approval; disclose them to their employees within 15 days from the date of approval.

4. To terminate labor contracts and notify in writing the employees specified in Clause 1 Article 2 of this Decree; settle their regimes within 30 days from the date of termination of the labor contracts; make payment and finalize the funds for handling of regimes applicable to laid-off employees in accordance with law provisions.

5. Request social insurance agencies of provinces, centrally-run cities to settle policies toward laid-off employees specified in Clauses 1,2 and 3 Article 3 of this Decree; at the same time, provide dossiers related to such settlement in accordance with the social insurance agency’s regulations.

6. Report to their owner-representing agencies on the handling of policies toward laid-off employees, using the Form No. 12 in the Appendix II to this Decree within 30 days from the date such handling is completed.

Article 10. Responsibilities of enterprises after the reorganization

1. Implement the approved employment plans; arrange the use of labor in conformity with their production and business.

2. Pay severance allowance, job loss allowance to employees transformed from enterprises to be reorganized according to the employment plans approved by a competent authority in cases such employees are dismissed or  lose their job in the enterprises after the reorganization in accordance with Article 46, Article 47 of Labor Code and guiding documents.

Article 11. Responsibilities of agencies and organizations

1. The Ministry of Labor, Invalids and Social Affairs shall

a) Inspect and monitor the implementation of policies toward laid-off employees defined in this Decree;

b) Synthesize and report on the implementation of this Decree at the request of the Government and the Prime Minister.

2. The Ministry of Finance shall assume the prime responsibility for, and coordinate with relevant agencies in, balancing and arranging current expenditure estimates to settle the regimes for laid-off employees specified in this Decree according to budget assignment.

3. The People's Committees of provinces and centrally-run cities shall be responsible for balancing and allocating current expenditure estimates to handle the policies toward laid-off employees specified in this Decree according to budget assignment.

4. Owner-representing agencies shall take the following responsibilities for their affiliated enterprises to be reorganized:

a) Direct the enterprises to be reorganized to formulate their employment plans in accordance with law provisions and settle policies toward their laid-off employees in accordance with this Decree;

b) Approve the employment plans in accordance with this Decree before the approval of reorganization plans; approve the modified employment plans (if any);

c) Handle the policies toward laid-off employees in enterprises to be implemented dissolution or bankruptcy;

d) Coordinate with relevant agencies in finalizing the funds for settlement of regimes for laid-off employees;

dd) Inspect and supervise the implementation of policies toward laid-off employees of their affiliated enterprises to be reorganized under this Decree;

e) Report on the implementation of policies toward laid-off employees, using the Form No. 13 in Appendix II to this Decree at the request of the Ministry of Labor, Invalids and Social Affairs.

5. The Vietnam Social Security shall:

a) Direct, guide and inspect the collection of social insurance premiums and implementation of social insurance regimes applicable to laid-off employees as specified in Clauses 1, 2 and 3 Article 3 and Clause 5 Article 13 hereof by the social insurance agencies of provinces and centrally-run cities;

b) Report on the collection of social insurance premiums and settlement of early retirement for laid-off employees, using the Form No. 14 in Appendix II to this Decree at the request of the Ministry of Labor, Invalids and Social Affairs.

6. The Vietnam General Confederation of Labor is required to:

a) Direct and guide grassroots-level employees’ representative organizations to coordinate with the enterprises to be reorganized to propagate and disseminate policies toward laid-off employees in accordance with law provisions; give opinions on employment plans; supervise the settlement of regimes for laid-off employees in enterprises to be reorganized;

b) Coordinate with the Ministry of Labor, Invalids and Social Affairs and owner-representing agencies in inspecting and supervising the implementation of policies toward laid-off employees of enterprises to be reorganized in accordance with this Decree.

Chapter IV

IMPLEMENTATION PROVISIONS

Article 12. Transitional provisions

For enterprises to be reorganized with an employment plan that has been approved by a competent agency under the Government’s Decree No. 63/2015/ND-CP dated July 22, 2015 defining the policies toward laid-off employees upon reorganization of state-owned single-member limited liability companies before the effective date of this Decree, the regimes for their laid-off employees shall continue to be settled under the approved employment plans; the funds for implementation of the policies toward laid-off employees shall be allocated by the state budget as specified in Decree No. 148/2021/ND-CP, instead by the Enterprise Reorganization and Development Support Fund.

Article 13. Application of this Decree for other subjects

1. Single-member limited liability companies with 100% charter capital owned by political organizations or socio-political organizations to be reorganized according to the plans approved by a competent agency may apply this Decree to perform the policies toward laid-off employees. The funds for implementation of policies toward laid-off employees shall be allocated from revenues from first sale of shares, sale of enterprises, for enterprises to be implemented equitization or sale of the whole enterprise, or from other lawful revenues under law provisions, for enterprises to be implemented dissolution or bankruptcy, or from lawful funding sources of owner-representing agencies, for enterprises to be transformed into a limited liability company with two or more members, to be transformed into a non-business unit, or to be implemented merger, consolidation, division, splitting; in case of insufficiency, the funds shall be allocated additionally from other lawful funding sources decided by the owner-representing agencies.

2. Single-member limited liability companies with 100% state-owned charter capital in the fields of agriculture, forestry to be reorganized in the form of maintenance, consolidation and development approved by a competent agency shall settle the policies toward laid-off employees in accordance with this Decree.

3. Public non-business units to be implemented equitization according to a competent agency’s decision may apply this Decree to perform the policies toward employees working under labor contracts to whom joint stock companies can not assign another job under their employment plans. The funds for implementation of policies toward employees working under labor contracts to whom joint stock companies can not assign another job shall be allocated from revenues from first sale of shares upon equitization of the public non-business units; in case of insufficiency, the funds shall be allocated additionally from the state budget in accordance with Decree No. 148/2021/ND-CP.

4. Upon performance of reorganization under a plan approved by a competent agency, single-member limited liability companies with 100% charter capital owned by parent companies of state economic groups, parent companies of state corporations, parent companies in parent company - subsidiary groups specified in Article 1 of this Decree (grade-II enterprises) may apply this Decree to implement policies toward their laid-off employees, representatives of enterprises’ capital contributions. The funds for implementation of policies toward laid-off employees, representatives of enterprises’ capital contributions shall be allocated from revenues from first sale of shares, sale of enterprises, for enterprises to be implemented equitization, sale of the whole enterprise; or from other lawful revenues under law provisions, for enterprises to be transformed into a limited liability company with two or more members, to be transformed into a non-business unit, or to be implemented merger, consolidation, division, splitting, dissolution or bankruptcy. In case of insufficiency, parent companies of state economic groups, parent companies of state corporations, parent companies in parent company - subsidiary groups shall be responsible for offsetting the shortage and such expense shall be accounted in parent companies’ financial operation expense.

5. Upon reorganization of the Vietnam Development Bank under the Prime Minister’s decision, in cases of its employees recruited in the Vietnam Development Bank before July 31, 2019 being laid-off employees, employees wishing to retire before the retirement age and the Vietnam Development Bank had taken all measures but could not assign another job to them, such employees shall be entitled to enjoy policies specified in Clauses 1, 2, 3 and 4 Article 3 of this Decree, in which for the persons previously working in the General Department of Development Investment or Development Support Fund before working in the Vietnam Development Bank and without enjoying severance allowance, job loss allowance according to provisions for such duration, the duration shall be included in the working time in the Vietnam Development Bank for calculation of their job loss allowance and supports as defined in Clause 4 Article 3 hereof. The funds for the implementation of the policy for employees specified in this Clause shall be accounted into expenditure on operation of the apparatus of the Vietnam Development Bank.

Article 14. Effect and implementation responsibilities

1. This Decree takes effect on January 15, 2023.

2. The Government’s Decree No. 63/2015/ND-CP dated July 22, 2015 defining the policies toward laid-off employees upon reorganization of State-owned single-member limited liability companies; Circular No. 44/2015/TT-BLDTBXH dated October 22, 2015 of the Ministry of Labor, Invalids and Social Affairs guiding the implementation of a number of articles of the Government’s Decree No. 63/2015/ND-CP dated July 22, 2015 defining the policies toward laid-off employees upon reorganization of State-owned single-member limited liability companies shall cease to be effective from the effective date of this Decree.

3. Clause 3 Article 40 of the Government’s Decree No. 46/2021/ND-CP dated March 31, 2021 on financial management regime and operational efficiency assessment of the Vietnam Development Bank shall cease to be effective from the effective date of this Decree.

4. In case legal documents invoked in this Decree are amended, supplemented or replaced, the new documents shall be applied.

5. Addition to regimes specified in Article 3 and Article 4 of this Decree, single-member limited liability companies with 100% state-owned charter capital to be reorganized defined in Article 1 hereof are encouraged to provide the additional supports from their lawful funds to their laid-off employees after reaching an agreement with their grassroots-level employees’ representative organizations.

6. Ministers, heads of ministerial-level agencies and government-attached agencies, chairpersons of People’s Committees of provinces and centrally-run cities, and Members’ Councils of state economic groups, state corporations, parent companies in parent company - subsidiary groups, independent companies shall implement this Decree.

On behalf of the Government

For the Prime Minister

Deputy Prime Minister

Le Minh Khai

* All Appendices are not translated herein.