Policies for redundant employees in state-owned companies in Vietnam

Policies for redundant employees in state-owned companies in Vietnam (Internet image)

Regarding this issue, LawNet would like to answer as follows:

1.  Policies for redundant employees who are recruited before April 21, 1998 or April 26, 2002 in Vietnam

According to Article 3 of Decree 97/2022/ND-CP, A redundant employee prescribed in Point a or Point b Clause 1 Article 2 of Decree 97/2022/ND-CP is entitled to the following benefits:

(1) A redundant employee whose age is younger than the retirement age prescribed in Clause 2 Article 169 of the Labor Code 2019 and Article 4 Decree 135/2020/ND-CP, and who has paid social insurance for at least 20 years will receive retirement pension and the following benefits:

- His/her pension will not be reduced due to early requirement;

- He/she will receive an allowance equal to 03 months’ salary for each full year (i.e. 12 months, excluding incomplete month), of early retirement determined according to the retirement age prescribed in Clause 2 Article 169 of the Labor Code 2019 and Article 4 Decree 135/2020/ND-CP;

- He/she will receive an allowance equal to 0,4 of the average statutory minimum monthly wages for each working year with payment of social insurance contributions.

(2) A redundant employee whose age is younger than the retirement age prescribed in Clause 2 Article 169 of the Labor Code 2019 and Article 4 Decree 135/2020/ND-CP, and who has paid social insurance for at least 20 years will receive retirement pension and the following benefits:

- His/her pension will not be reduced due to early requirement;

- He/she will receive an allowance equal to 0,2 of the average statutory minimum monthly wages for each working year with payment of social insurance contributions.

(3) A redundant employee who reaches the retirement age prescribed in Clause 2 Article 169 of the Labor Code 2019 and Article 4 Decree 135/2020/ND-CP but has no more than 06 months of social insurance contribution left to be eligible to receive pension shall have the remaining social insurance contributions paid in lump sum by the State to the pension and death benefit fund in order to be eligible for retirement benefits.

Total amount of social insurance contributions paid by the State equals the amount of social insurance contributions paid to the pension and death benefit fund by both employer and employee for the month preceding the month in which the employee quits his/her job multiplied by the number of required social insurance contribution months.

(4) If a redundant employee prescribed in Point a Clause 1 Article 2 of Decree 97/2022/ND-CP is not eligible to receive the benefits prescribed in Clauses 1, 2 and 3 of Article 3 of Decree 97/2022/ND-CP, he/she will terminate the signed employment contract and receive the following benefits:

- The redundancy allowance prescribed in Article 47 of the Labor Code 2019 and Clause 2 Article 8 of Decree 145/2020/ND-CP;

- He/she will receive an allowance equal to 0,05 of the average statutory minimum monthly wages for each working year at the rearranged enterprise.

- Support an amount equal to 0.05 average monthly minimum salary for each year of working at the re-arranged enterprise.

(5) If a redundant employee prescribed in Point b Clause 1 Article 2 of Decree 97/2022/ND-CP is not eligible to receive the benefits prescribed in (1), (2), (3), he/she will terminate the signed employment contract and receive the following benefits:

- The severance pay prescribed in Article 46 of the Labor Code 2019 and Clause 1, Article 8 of Decree 145/2020/ND-CP;

- He/she will receive an allowance equal to 0,2 month’s salary for each working year at the rearranged enterprise.

2. Policies for redundant employees who are recruited from April 21, 1998 or April 26, 2002 onwards in Vietnam

A redundant employee prescribed in Point c or Point d Clause 1 Article 2 of Decree 97/2022/ND-CP is entitled to the following benefits:

- The redundancy allowance prescribed in Article 47 of the Labor Code 2019 and Clause 2 Article 8 of Decree 145/2020/ND-CP shall be paid to an employee of the rearranged enterprise prescribed in Clauses 1, 2, 3 and 4 Article 1 of Decree 97/2022/ND-CP.

- The severance allowance prescribed in Article 46 of the Labor Code 2019 and Clause 1 Article 8 of Decree 145/2020/ND-CP shall be paid to an employee of the rearranged enterprise prescribed in Clause 5 Article 1 of Decree 97/2022/ND-CP.

(Article 4 of Decree 97/2022/ND-CP)

Tran Thanh Rin

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