Who are not exempt from downsizing in Vietnam from 20/7/2023?

Who are not exempt from downsizing in Vietnam from 20/7/2023?

Pursuant to Article 4 of the Decree 29/2023/NĐ-CP, 02 subjects, who are not exempt from downsizing in Vietnam, are:

- People who are in pregnancy, on maternity leave, or have babies under 36 months, unless they are willing to be downsized.

- People who are in their disciplinary probation, criminal prosecution, or are investigated because they are suspected of breaking the law.

From 20/7/2023, how to determine the time used to calculate allowance for early retirement in Vietnam?

Pursuant to Article 10 of the Decree 29/2023/NĐ-CP stipulating methods of determining time and reference salary for the calculation of downsizing allowances as follows:

Methods of determining time and reference salary for the calculation of downsizing allowances

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 1st 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 1st 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.

As regulations above, to determine the time used to calculate allowance for early retirement of the subject of downsizing will be based on the 1st day of the following month adjacent to the subject's month of birth;

If the subject's records do not specify the date and month of birth in the year, take January 1 of the subject's year of birth.

In which cases shall displaced employees refund the severance packages they received before in Vietnam?

Pursuant to Article 3 of the Decree 29/2023/NĐ-CP stipulating rules for downsizing as follows:

Rules for downsizing

1. Ensure the administration of the Communist Party and the management of the State; uphold the supervisory role of socio-political organizations and citizens during the downsizing.

2. Downsizing and reorganizing the organizational apparatus should be linked to improve the efficiency and effectiveness of organizations, as well as to improve the quality of officials and public employees according to their positions, while maintaining the autonomy of organizations.

3. Commit that the downsizing is conducted democratically, objectively, openly, and transparently and in accordance with applicable laws.

4. Sufficiently and promptly settle all severance packages to displaced employees under applicable laws, effectively use the State budget.

5. The Heads of organizations shall be responsible for the downsizing within their jurisdiction.

6. If displaced employees are elected or re-recruited to organizations on State payrolls within 60 months after the date of downsizing, they must refund the severance packages they received before.

As regulations above, if displaced employees are elected or re-recruited to organizations on State payrolls within 60 months after the date of downsizing, they must refund the severance packages they received before.

Note: the Decree 29/2023/NĐ-CP takes effect from 20/7/2023.

Best regards!