How much allowance will downsizing employees receive from July 20, 2023 when immediate resignation in Vietnam?

How much allowance will downsizing employees receive from July 20, 2023 when immediate resignation in Vietnam?

In Clause 1, Article 7 of Decree 29/2023/ND-CP, there are regulations on resignation policies as follows:

1. Immediate resignation:

Displaced employees who are at least 2 years younger than the statutory retirement age as prescribed in Appendix I and II issued together with Decree No. 135/2020/ND-CP and ineligible for early resignation prescribed in Clause 2, Article 8 of this Decree, they shall receive the following allowances when they apply for immediate resignation:

a) The current 3 month's salary for job search purpose;

b) 1/5-month salary for each working year with full payment of compulsory social insurance premiums.

Thus, from July 20, 2023, the downsizing employees when they apply for immediate resignation but has a minimum age of at least 2 years younger than the statutory retirement age and ineligible for early resignation, they shall receive the following allowances when they apply for immediate resignation in Vietnam:

- 3 month's salary for job search purpose;

- 1/5-month salary for each working year with full payment of compulsory social insurance premiums.

From July 20, 2023, what is time limit to calculate severance allowance of downsizing employees in Vietnam?

In Clause 4, Article 10 of Decree 29/2023/ND-CP, it is prescribed methods of determining time and reference salary for the calculation of downsizing allowances as follows:

1. Current salary is the salary of the month preceding the month of downsizing. The monthly salary includes: the salary based on pay grade, pay step, position, title, professional title; or the salary stated in the employment contract, or the salary of managers; allowances for positions, extra-seniority, or occupational seniority; or the salary and differences in reserved allowances (if any) under applicable laws.

2. Average salary is the average salary of last 5 years (60 months) before downsizing. For those who work for under 05 years (under 60 months) with payment of social insurance premiums, their average salary shall be the average salary of the whole working duration.

3. The 1^st of the month succeeding the birth month of an employee will be used to calculate his/her age to benefit the early retirement policy; the January 1^st of the birth year of any employee will be used to calculate his/her age to benefit the early retirement policy if his birth day and month cannot be identified.

4. The time used to calculate allowances stated in Articles 5, 6, 7, and 8 of this Decree is the total working time during which compulsory social insurance premiums were paid (using each person's social insurance number) and during which the employee did not receive severance allowance, lump-sum social insurance payout, or demobilization allowance. If the mentioned time is not full year(s), it will be rounded up as follows: 1 month to full 6 months will be considered as half of year, and the allowance will be paid for half of year; 6 months to under 12 months will be considered as one year, and the allowance will be paid for one year.

5. If the time used to calculate allowance for early retirement specified in Article 5, Article 8 of this Decree is not full year(s), it will be rounded up as follow: 1 month to full 6 months will be considered as half of year, and the allowance will be paid for half of year; 6 months to under 12 months will be considered as one year, and the allowance will be paid for one year.

Thus, the time to calculate the severance allowance of the person downsizing is determined by the total working time with compulsory social insurance payment (according to each person's social insurance number) but did not receive severance allowance, lump-sum social insurance payout, or demobilization allowance in Vietnam.

If the mentioned time is not full year(s), it will be rounded up as follows: 1 month to full 6 months will be considered as half of year, and the allowance will be paid for half of year; 6 months to under 12 months will be considered as one year, and the allowance will be paid for one year in Vietnam.

From July 20, 2023, what are benefits for downsizing employees when they resign after going to vocational training in Vietnam?

In Clause 2, Article 7 of Decree 29/2023/ND-CP, the policy of resignation after vocational training is as follows:

Employees specified in Article hereof who are under 45 years old, disciplined, healthy, responsible and take charge of positions irrelevant to their qualifications wishing to resign their jobs, they are provided vocational training and receive the following allowances:

a) The full current monthly salary and still be paid social insurance, health insurance, and unemployment insurance premiums (if eligible for payment of unemployment insurance premiums) during the vocational training for maximum 06 months;

b) An allowance equal to 06-month salary;

c) 03 month salary after finishing their vocational training courses;

d) A half of monthly salary for the each working years with full social insurance premiums;

dd) The vocation training duration is recognized as working period but it is not included in the seniority for annual advancement between steps.

Note: Subjects who resign their jobs after going to vocational training are still entitled to reserve the time to pay social insurance premiums and issue a social insurance number or receive a lump-sum social insurance allowance in accordance with the Law on Social Insurance in Vietnam;

However, they are not entitled to the severance policy for civil servants and public employees as prescribed by law in Vietnam.

Note: Decree 29/2023/ND-CP takes effect from July 20, 2023.

Best regards!