Vietnam: Extending the period of enjoyment of the downsizing policy until the end of December 31, 2030

One of the notable contents of the Decree No. 143/2020/NĐ-CP of Vietnam’s Government is the regulation to extend the time limit for enjoying regimes and policies on payroll downsizing until the end of December 31, 2030 instead of the end of December 31, 2021. Specifically, according to Clause 8 Article 1 of the Decree No. 143/2020/NĐ-CP, Article 24 of the Decree No. 108/2014/NĐ-CP is amended as follows:

Article 24. Entry into force

This Decree enters into force from January 10, 2015. Severance packages and benefits promulgated hereof shall be valid to the end of 2030.

Previously, according to Article 24 of the Decree No. 108/2014/NĐ-CP:

Article 24. Entry into force

This Decree enters into force from January 10, 2015. Severance packages and benefits promulgated hereof shall be valid to the end of 2021.

Decree No. 143/2020/NĐ-CP has extended the period of enjoyment of regimes and policies, including the downsizing policies, by 9 years, until the end of 2030.

Policies for people subject to downsizing include: early retirement policies; resignation policies (including immediate resignation and resignation after vocational training); the policy of switching to work at an organization without a regular salary from the State budget; policies for officials who cease to hold leadership positions or are appointed or elected to other positions with lower allowances for new leadership positions due to organizational arrangement. In particular, early retirement policies and resignation policies are amended by the Decree No. 143/2020/NĐ-CP as follows:

- Early retirement policies: Clause 2 Article 1 of the Decree No. 143/2020/NĐ-CP amending and supplementing Article 8 of the Decree No. 108/2014/NĐ-CP as follows:

Displaced employees having at least 5 years old and at least 2 years younger than the minimum retirement age specified in Clause 3 Article 169 of the Labor Code of Vietnam, paying social insurance premiums for at least 20 years and working in heavy, dangerous or hazardous industries on the list jointly released by the Ministry of Labor, War Invalids and Social Affairs and Ministry of Health for at least 15 years; or working for in areas having region-based allowances of at least 0.7 for at least 15 years shall benefit from the following welfares, besides pension policies under laws on social insurance:

- Do not have pensions deducted due to early retirement;

- Receive 03-month salary for each early retirement year compared to provisions on the minimum age requirement of Clause 3 Article 169 of the Labor Code of Vietnam;

- Receive 05-month salary for the first 20 working years with full social insurance premiums. From the 21st working years onwards, each working year with social insurance premiums paid shall be granted a half of 01-month salary;

- …

View all Early retirement policies due to downsizing applied from January 01, 2021 in Vietnam here. 

- Immediate resignation policies: Clause 2 Article 1 of the Decree No. 143/2020/NĐ-CP amending and supplementing Clause 1 Article 10 of the Decree No. 108/2014/NĐ-CP as follows:

Regarding employees who are subject to downsizing whose maximum age is 2 years lower than the minimum retirement age specified in Clause 3 Article 169 of the Labor Code of Vietnam and are not eligible for early retirement policy prescribed in Clause 1 Article 8 of Decree No. 108/2014/NĐ-CP, or are 2 years younger than the retirement age specified in Clause 2 Article 169 of the Labor Code of Vietnam and are not eligible for early retirement policy prescribed in Clause 2 Article 8 of Decree No. 108/2014/NĐ-CP, they shall receive the following allowances when they apply for immediate resignation:

- 3 month's salary;

- 1,5 month's salary for each working year with full payment of social insurance premiums.

Thus, the time limit for the downsized subjects to enjoy the benefits of early retirement and immediate resignation will last until the end of December 31, 2030.

>>> View more: Who are subject to downsizing in Vietnam from December 10, 2020?

Thuy Tram

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