What is the downsizing in Vietnam? Will officials who retire early due to downsizing have their pensions deducted in Vietnam?

What is the downsizing in Vietnam?

According to Article 3 of Decree 108/2014/ND-CP on downsizing, it is defined as follows:

Interpretation

...

2. “Downsizing": a process of evaluating, classifying and making those failing to satisfy job requirements redundant, and settle severance packages to laid-off employees.

However, Decree 108/2014/ND-CP expired on July 20, 2023 and was replaced by Decree 29/2023/ND-CP.

According to the provisions of Article 2 of Decree 29/2023/ND-CP, there is no explanation of what downsizing is, but there are provisions on the subjects who will implement downsizing.

It can be understood that downsizing is the evaluation, classification, and removal from the organizational structure of officials who no longer meet the requirements to continue their work and the resolution of policies for individuals subject to downsizing.

What is the downsizing in Vietnam? Will officials who retire early due to downsizing have their pensions deducted in Vietnam? (Image from the Internet)

What are cases of officials subject to the downsizing in Vietnam?

According to Clause 1 of Article 2 of Decree 29/2023/ND-CP on people subject to the downsizing, it is as follows:

1. Officials and public employees; officials and public employees of communes and employees working under permanent employment contract in State administrative agencies with the same policies as officials in accordance with the Government’s regulations shall be subject to the downsizing if:

- They are made redundancy due to the restructuring of organizations or personnel upon decisions of the competent authority; or the conversion of public sector entities into autonomous ones;

- They are made redundancy due to the restructuring of administrative divisions of districts and communes upon decisions of the competent authority;

- They are made redundancy due to the restructuring of officials, and public employees according to their positions and failure to offer new jobs; or they are offered new jobs, but they have agreed to be downsized and their employers agree with that;

- They fail to meet qualifications required for the in-charge position, but the organization is unable to provide additional training and offer new relevant jobs; or they are offered new jobs, but they have agreed to be downsized and their employers agree with that;

- In 2 consecutive years of downsizing consideration, their performance is recognized as “average” in 1 year and “poor” in 1 year, but their employer is unable to offer them new jobs. In the preceding year or within the year of downsizing consideration, their performance is recognized as “average” or worse, but they have agreed to be downsized and their employers agree with that;

- The total annual sick leave is equal to or greater than the maximum leave stipulated in clause 1, Article 26 of the Law on Social Insurance for 02 consecutive years which is certified by the social security agency under applicable regulations of law. In the preceding year or within the year of downsizing consideration, their total annual sick leave is equal to or greater than the maximum leave stipulated in clause 1, Article 26 of the Law on Social Insurance which is certified by the social security agency under applicable regulations of law; or they have agreed to be downsized and their employers agree with that;

- Officials or public employees who are no longer directors or transferred to lower-ranks, due to restructuring of administrative apparatus or divisions under decisions of the competent authority; or they have agreed to be downsized and their employers agree with that;

- Officials or public employees during their disciplinary probation but not to the extent where dismissal is needed as per the law at the downsizing consideration time; or they have agreed to be downsized and their employers agree with that.

Will officials who retire early due to downsizing have their pensions deducted in Vietnam?

According to Article 5 of Decree 29/2023/ND-CP on policies for early retirement, it is as follows:

Early retirement

1. Displaced employees who are 2 to 5 years younger than the statutory retirement age as prescribed in Appendix II issued together with Decree No. 135/2020/ND-CP dated November 18, 2020 on retirement age (hereinafter referred to as Decree No. 135/2020/ND-CP) and have paid social insurance premiums for at least 20 years, and have worked in heavy, dangerous or hazardous industries on the list released by the Ministry of Labor, War Invalids and Social Affairs for full 15 years; or have worked for in severely disadvantaged areas for at least 15 years, on the list released by the Ministry of Labor, War Invalids and Social Affairs, including the working time in areas with region-based allowances of at least 0.7 before January 1, 2021, may benefit from the following welfares, besides pension policies under laws on social insurance:

a) Do not have pensions deducted because of early retirement;

...

Therefore, officials retiring early under the staff reduction scheme will not have their pension reduced due to early retirement in Vietnam.

Best Regards!