Joint Circular No. 07/2008/TTLT-BLDTBXH-BTC dated May 30, 2008 of the Ministry of Labour, War Invalids and Social Affairs and the Ministry of Finance guiding the implementation of the Government's Decree No. 11/2008/ND-CP dated January 30, 2008, providing for compensation for damage caused by unlawful strikes to employers

JOINT CIRCULAR

GUIDING THE IMPLEMENTATION OF THE GOVERNMENT'S DECREE No. 11/2008/ND-CP OF JANUARY 30, 2008, PROVIDING FOR COMPENSATION FOR DAMAGE CAUSED BY UNLAWFUL STRIKES TO EMPLOYERS

Pursuant to the Government's Decree No. 11/ 2008/ND-CP of January 30, 2008 providing for compensation for damage caused by unlawful strikes to employers (below referred to as Decree No. 11/2008/ND-CP), the Ministry of Labor, War Invalids and Social Affairs and the Ministry of Finance jointly guide its implementation as follows:

I. SCOPE OF REGULATION AND SUBJECTS OF APPLICATION

The scope of regulation and subject of application of compensation for damage under Articles 1 and 2 of Decree No. 11/2008/ND-CP are specified as follows:

1. Scope of regulation

a/ This Circular provides for responsibilities, levels and forms of compensation for organizations and individuals involved in strikes causing damage to employers when such strikes are declared unlawful by people's courts under Article 1 of Decree No. 11/2008/ND-CP.

b/ Compensation for property damage by those taking advantage of a (lawful or unlawful) strike to intentionally harm enterprise assets is not governed by Decree No. 11/2008/ND-CP and this Circular and complies with the Civil Code's provisions on compensation for damage outside contract.

2. Subjects of application

Subjects of application under Article 2 of Decree No. 11/2008/ND-CP include:

a/ Organizations and individuals having led or participated in an unlawful strike:

- Grassroots or provisional trade union executive committees (below referred to as grassroots trade union executive committees);

- Labor collective representatives designated by laborers and their designation has been notified to district- or equivalent-level labor federations;

- Laborers.

b/ Employers, including:

- Enterprises established and operating under the Enterprise Law.

- State companies in the period of transformation under Clause 2, Article 166 of the Enterprise Law.

- Cooperatives and cooperative unions estab-lished and operating under the Law on Cooperatives.

- Organizations, units and Vietnamese or foreign individuals employing laborers under labor contracts.

II. PROVISIONS ON COMPENSATION

1. Compensation responsibilities

Compensation responsibilities under Article 4 of Decree No. 11/2008/ND-CP are specified as follows:

a/ When a strike led by a grassroots trade union organization is declared unlawful by a people's court and causing damage to employers, the grassroots trade union executive committee shall compensate for such damage.

b/ When a strike led by labor collective representatives is declared unlawful by a people's court and causing damage to employers, those representatives and employees going on strike shall take personal responsibility for sharing the obligation to compensate such damage.

2. Compensation request

Employers' compensation request under Article 5 of Decree No. 11/2008/ND-CP is specified as follows:

Within 01 (one) year from the effective date of a people's court decision on the unlawfulness of a strike, an employer may request the trade union organization or labor collective representatives and employees going on strike to compensate for damage.

A compensation request shall be made in writing according to Form No. 1 attached to this Circular (not printed herein), covering the value of damage, and level, mode and time of compensation.

The written compensation request and related documents shall be sent to the grassroots trade union executive committee or labor collective representatives and simultaneously to the Labor. War Invalids and Social Affairs Service and the Labor Federation of the province or centrally run city where the strike takes place.

3. Determination of damage for compensation

Determination of damage for compensation under Article 6 of Decree No. 11/2008/ND-CP is specified as follows:

a/ An employer shall determine damage caused by an unlawful strike. Damage is valued in Vietnam dong based on the level of damage caused by the unlawful strike covering:

- Value of broken machinery and equipment to be replaced: raw materials unsable for production and trading: and unusable semifinished and end products which have not been preserved or packed, after deducting the value recovered through liquidation (if any).

- Expenses for operating machinery and equipment during the strike to prevent breakdown, including costs for electricity, water, petroleum and hiring of machine operators; expenses for repairing broken machinery and equipment: expenses for preserving raw materials and products during the strike; expenses for recycling raw materials, semifinished or end products being damaged: expenses for cleaning up and disposing or broken raw materials and products.

b/ The value of compensation is determined based on the market price at the time an unlawful strike takes place; the value of compensation for to-be-replaced or -repaired fixed assets broken due to suspension of their operation is determined based on their original value, level of depreciation value under current regulations and value recoved through liquidation (if any).

c/ When the two parties fail to reach agreement on the value of damage, they may request an intermediary organization to value the damage. Valuation expenses shall be paid by the party requesting the valuation.

The intermediary organization to value the damage is a lawfully established price appraisal organization.

4. Level of compensation

The level of compensation under Article 7 of Decree No. 11/2008/ND-CP is specified as follows:

The two parties may reach agreement on the level of compensation based on the determined value of damage prescribed in Clause 3 of this Section, but the maximum level must not exceed three (0?) consecutive months' wage or pay received by employees going on strike before the date of a strike under their labor contracts. Wage and pay under labor contracts are the amounts to be used as the basis for buying and receiving social insurance.

5. Negotiation on levels of compensation at enterprises

Negotiation on levels of compensation at enterprises under .Article 8 of Decree No. 11/2003/ ND-CP is specified as follows:

a/ Within 10 days from the date of receiving a compensation request, the grassroots trade union executive committee or labor collective representatives shall produce a written reply to the employer.

If agreeing with the employer's compensation request, they shall make a written commitment on compensation according to Form No. 2 attached to this Circular (not printed herein). This written commitment serves as the legal basis for determining the obligation of compensation of representatives of the grassroots trade union organization or labor collective representatives.

If disagreeing with the request, they shall make a written request for negotiation according to Form No. 3 attached to this Circular (not printed herein). clearly specifying the time and venue for negotiation and. send it to the employer and the provincial-level Labor, War Invalid and Social Affair Service and Labor Federation.

b/ Within three (03) working days from the date of receiving a negotiation request, the employer shall hold a negotiation meeting. When failing to hold this meeting as scheduled, the employer shall issue a written reply clearly stating the reason and specifying the time for another meeting.

c/ The employer and representatives of the grassroots trade union executive committee or labor collective representatives shall chair the negotiation meeting. A secretary shall record the meeting minutes.

The level, mode and time of compensation shall be negotiated in the meeting.

The meeting minutes must specify participants and negotiation contents and results and have signatures of the employer, representatives of the grassroots trade union executive committee or labor collective representatives and the secretary. The minutes, made according to Form No. 4 attached to this Circular (not printed herein), serves as the legal basis for determining the rights and obligations of involved parties responsible for compensation (if negotiation succeeds). or for initiating a lawsuit at a people's court (if negotiation fails).

The two parties may invite representatives of the labor state management agency, immediate superior trade union organization and local employers to attend the negotiation meeting.

d/ At the negotiation meeting, if the two parties fail to reach agreement on the value of damage, they may suspend the meeting so that one of the parties may request an intermediary organization to value the damage.

Within 5 working days from the date of suspending the negotiation meeting, the party requesting for the re-valuation of damage shall request in writing an intermediary organization to value the damage. Past this time limit the two parties shall hold the negotiation meeting again if no written request for valuation of damage is made.

Within 5 working days from the date an intermediary organization announces the result of its valuation of damage, the two parties shall accept this result and hold the negotiation meeting again to negotiate on the remaining contents.

e/ Past the time limit of 10 days from the date of receiving an employer's compensation request, if a grassroots trade union executive committee or labor collective representatives fails to issue a written reply. the party representing laborers is considered refusing negotiation.

6. Suing for damages

a/ An employer may initiate a lawsuit for damages at the district-level people's court of the locality where a strike takes place under Article 9 of Decree No. 11/2008/ND-CP in the following cases:

Employee representatives refuse to negotiate under Point e, Clause 5 of this Section:

Negotiation fails on the basis of negotiation minutes;

The party liable to pay compensation fails to fulfill its commitments (under Point a. Clause 5 of this Section) or as specified in the negotiation minutes.

b/ The order of and procedures for suing at a people's court comply with the law on civil proceedings.

7. Compensation

Compensation under Article 10 of Decree No. 11/2008/ND-CP is specified as follows:

a/A grassroots trade union organization having led an unlawful strike shall compensate the employer for damage from its funds, including the following sources:

- Funds from trade union members' monthly payment of membership fees which grassroots trade union are permitted to keep and expenses for trade union activities monthly paid by employers under current regulations.

- Other incomes from cultural and sports activities, business, production and service activities organized by trade unions and funds financed by domestic and overseas organizations.

b/ When labor collective representatives have led a strike declared unlawful b\ a peoples court, these representatives and employees going on strike shall share the responsibility for compensating for damage.

The level of personal compensation is determined by dividing the total level of compensation by the total number of strikers (including leaders of the strike).

Each individual shall compensate for damage by having his/her monthly salary or pay gradually deducted. The maximum monthly deduction must not exceed 30% of his/her monthly wage or pay used as the basis for buying and receiving social insurance under their labor contracts.

When an employee terminates his/her labor contract before fulfilling his/her compensation obligation, the remaining amount to be compensated shall be considered his/her debt to the employer. The payment of this debt may be agreed upon by the two parties or complies with law.

c/ Compensation in kind or by the performance of a job may be agreed upon by the two parties on the basis of converting compensated objects or pay for the performance of a job into cash.

III. ORGANIZATION OF IMPLEMENTATION

1. This Circular takes effect 15 days after its publication in "CONG BAO."

2. In the course of implementation, arising problems should be reported to the Ministry of Labor, War Invalids and Social Affairs and the Ministry of Finance for prompt settlement.