Severance pay for resigned public employees in Vietnam

1. Severance pay for resigned public employees in Vietnam

The severance pay for resigned public employees in Vietnam is outlined in Article 58 of Decree 115/2020/ND-CP as follows:

• For the working period of public employees up until December 31, 2008, it is calculated as follows:

  • Each year of work is equivalent to half a month's current salary, including: basic salary according to professional title, managerial position allowance, exceeding seniority allowance, profession seniority allowance, and reserved salary differential (if any);

  • The minimum allowance is equivalent to one month's current salary;

  • For public employees recruited before July 1, 2003, the working period for calculating severance pay is the total working time (cumulatively) from the date of the recruitment decision until December 31, 2008;

  • For public employees recruited from July 1, 2003, onwards, the working period for calculating severance pay is the total working time according to the working contract (cumulatively) from the date of the recruitment decision until December 31, 2008.

• For the working period of public employees from January 1, 2009, until now, it is implemented according to the regulations on unemployment benefits.

• Funding for severance pay payment:

  • For public non-business units that are self-sufficient in both regular and investment expenditures or only self-sufficient in regular expenditures: The funding for severance pay payments is derived from the unit's financial resources, including the time the public employee had previously worked at other agencies, organizations, or units within the political system.

  • For public non-business units that are partially self-sufficient in regular expenditures or those fully funded by the state budget: The funding for severance pay payments is derived from the financial resources of the non-business unit, including the time the public employee had previously worked at other agencies, organizations, or units within the political system.

If the unit's financial resources are insufficient to cover the severance pay for the period the public employee worked at other agencies, organizations, or units within the political system, state budget support will be provided.

• Public employees who resign and are entitled to the severance pay as stipulated in clauses 1 and 2 of Article 58 of Decree 115/2020/ND-CP will also have their social insurance contribution period certified according to legal regulations.

2. Procedures for retirement for public employees in Vietnam

Procedures for retirement for public employees in Vietnam are outlined in Article 59 of Decree 115/2020/ND-CP as follows:

• The retirement date is the first day of the month following the month in which the public employee reaches the retirement age as stipulated.

• The retirement date can be deferred in the following cases:

  • Up to one month if: The retirement date coincides with the Lunar New Year holiday; the public employee has a spouse, parent (of the spouse), or child who has passed away or been declared missing by a court; if the public employee or their family suffers damage due to natural disasters, enemy actions, or fires;

  • Up to three months if the public employee is seriously ill or has had an accident with a hospital certificate;

  • Up to six months if the public employee is undergoing treatment for a long-term illness listed by the Ministry of Health, with a hospital certificate.

• Public employees eligible for deferral of the retirement date as specified in clause 2 of Article 59 of Decree 115/2020/ND-CP may only opt for one case that allows the longest deferral period.

• The head of the agency or unit with jurisdiction over the public employee decides on the deferral of the retirement date as stipulated in clause 2 of Article 59 of Decree 115/2020/ND-CP.

• If the public employee chooses not to defer the retirement date as specified in clause 2 of Article 59 of Decree 115/2020/ND-CP, the head of the agency or unit managing the public employee will proceed with the retirement procedures as specified in clause 1 of Article 59 of Decree 115/2020/ND-CP.

• At least six months before the retirement date stipulated in clauses 1, 2, 3, and 4 of Article 59 of Decree 115/2020/ND-CP, the agency or unit managing the public employee must issue a written notice on the retirement date for the public employee to prepare for a replacement.

• Regulations related to retirement decisions:

  • At least three months before the retirement date stipulated in clauses 1, 2, 3, and 4 of Article 59 of Decree 115/2020/ND-CP, the agency or unit managing the public employee must issue the retirement decision;

  • Based on the retirement decision stipulated in point a of clause 7 of Article 58 of Decree 115/2020/ND-CP, the agency or unit managing the public employee will coordinate with the social insurance organization to proceed with the formalities for the public employee to receive social insurance benefits upon retirement;

  • The retiring public employee must hand over dossiers, documents, and pending tasks to the designated successor at least three working days before the retirement date;

  • From the retirement date specified in the retirement decision, the public employee will retire and receive social insurance benefits according to regulations.

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