The policy of severance upon downsizing in Vietnam

The policy of severance upon downsizing in Vietnam (Internet image)

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

1. Policy of severance upon downsizing in Vietnam

- Policy of immediate severance:

Persons downsizing the payroll who are at least 2 years younger than the retirement age specified in Appendix I and II issued together with Decree 135/2020/ND-CP and are not eligible to enjoy the early retirement policy specified in Clauses 1, 2, and 5, Article 5 of Decree 29/2023/ND-CP, if they quit their jobs immediately, are entitled to the following allowances:

+ Receive a subsidy of 03 months of current salary to find a job;

+ Receive a subsidy of 1.5 months of average salary for each working year with compulsory social insurance payments.

- Policy on severance after vocational training:

Persons downsizing the payroll who are under 45 years old, have good health, a sense of responsibility, and a sense of discipline, but are undertaking jobs that are not suitable for their training qualifications or training majors, and wish to quit their jobs, shall be facilitated by agencies, organizations, or units to go to vocational training before retiring, find new jobs by themselves, and enjoy the following regimes:

+ Being entitled to the full current salary and to be paid social insurance, health insurance, and unemployment insurance premiums by the agency or unit (if participating in unemployment insurance) during the period of vocational training, but the maximum benefit period is 06 months;

+ Being subsidized with a vocational training budget equal to the cost of the vocational course for a maximum of 06 months of the current salary to pay to the vocational training institution;

+ After finishing the vocational training, they will be subsidized for 03 months of the salary currently enjoyed at the time of going to school to find a job;

+ Receiving a subsidy of 1/2 month of average salary for each working year with social insurance premiums;

+ During the apprenticeship period, the working time is counted continuously, but the seniority is not counted in order to raise the salary level regularly every year.

- The subjects who quit their jobs are entitled to reserve the time to pay social insurance premiums and issue a social insurance number or receive a lump-sum social insurance allowance in accordance with the Law on Social Insurance; they are not entitled to the severance policy for civil servants and public employees as prescribed by law.

(Article 7 of Decree 29/2023/ND-CP)

2. Principles of downsizing in Vietnam

- Ensure the leadership of the party and promote the supervisory role of socio-political organizations and the people in the process of downsizing.

- Linking downsizing the payroll with reorganizing the apparatus in the direction of leanness, effective and efficient operation, and restructuring, improving the quality of the contingent of cadres, civil servants, and public employees according to job positions, in line with the autonomy mechanism of agencies, organizations, and units.

- Ensuring the principles of democratic centralism, objectivity, fairness, publicity, transparency, and compliance with the law.

- Ensuring payment of payroll reduction regimes and policies in a timely and complete manner in accordance with law, ensuring efficient use of the state budget.

- The head must be responsible for the results of downsizing in the agency, organization, or unit assigned to manage according to his/her competence.

- Subjects of downsizing, if they are elected or re-recruited into agencies, organizations, or units receiving salaries from the state budget within 60 months from the date of downsizing, must return the received allowances to the agencies, organizations, and units that have paid the allowances.

(Article 3 of Decree 29/2023/ND-CP)

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