Nghị định 108/2014/ND-CP

DECREE

ON DOWNSIZING POLICIES

Pursuant to the Law on Government Organization dated December 25, 2001;

Pursuant to Law on Social Insurance dated June 29, 2006;

Pursuant to the Law Officials and Public employees dated December 13, 2008;

Pursuant to the Law on Civil Servants dated December 13, 2008;

At request of the Minister of Home Affairs;

The Government issues this Decree providing the downsizing policies.

Chapter I

GENERAL PROVISIONS

Article 1. Scope

This Decree applies to the following entities:

1. Authorities and organizations affiliated to the Government and Communist Party of Vietnam, socio-political organizations in all levels;

2. Public service providers of the Government and Communist Party;

3. Associations granted payrolls and funding by the State budget;

4. State-owned single member limited liability companies or political organizations or socio-political organizations ( hereinafter referred to as “single member limited liability company”) that are converted from State-owned companies or affiliates of political organizations or socio-political organizations and are authorized to reorganize by privatizing, transferring, selling, dissolving, merging, amalgamating, dividing, bankrupting or converting into two member limited liability companies or public service providers by competent authorities.

5. Joint-stock companies with State contributions that are completely sold by competent authorities.

6. State farms and plantations reorganized under provisions of laws.

Article 2. Regulated entities

1. Officials in all levels;

2. Public employees working for public service providers;

3. Employees working under permanent employment contract (hereinafter referred to as permanent employees) stipulated in the Decree No. 68/2000/ND-CP on employments contracts for a number of posts in State administrative agencies and public services providers dated November 17, 2000 of the Government, and other applicable laws.

4. Chairman of companies, Board members, Directors General, Deputy Directors General, Directors, Deputy Directors, Chief accountants, controllers of single member limited liability companies (excluding Directors General, Deputy Directors General and Chief Accountants having employment contracts).

5. Officials appointed as authorized representatives of the state contributions at State-owned enterprises.

6. Employees of associations under payrolls granted competent state authorities.

Article 3. Interpretation

1. For the purpose of this Decree, terms below shall be construed as follows:
“Payroll": officials and the number of workers working for public service providers and contractual workers granted by the competent authority under provision of laws.

2. “Downsizing": a process of evaluating, classifying and making those failing to satisfy job requirements redundant, and settle severance packages to laid-off employees.

Article 4. 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. Examine, reorganize, evaluate and classify permanent officials and public employees.

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

4. Sufficiently and timely settle all severance packages to displaced employees under applicable laws.

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

Article 5. Management of personnel after downsizing

1. Every agency, organization and unit shall be entitled to employ 50% of payrolls after downsizing and shall settle benefits for retirees or resigned workers under provisions of laws; the remaining payroll shall be considered as a contingent payroll that is used for the establishment of new organizations or execution new assigned tasks and shall be managed by the competent authority.

2. Any regulatory body, local government or other agency failing to execute the downsizing shall balance their total payroll themselves and shall not be granted additional payrolls as they establish new organization or execute new tasks assigned by the competent authority.

3. Officials of communes shall not be governed by clauses 1 and 2 of this Article.

Article 6. People subject to the downsizing

1. Officials and public employees under payrolls, and officials of communes receiving salaries from the State budget or salary budget of the public service providers (hereinafter referred to as “official and public employee”) shall be subject to the downsizing if:

a) They are made redundancy due to the restructuring of organizations or personnel upon requests of the competent authority of the Communist Party or the State; or the conversion of public service providers into autonomous ones;

b) They are made redundancy due to the restructuring of officials, and public employees according to their positions and failure to offer new jobs;

c) They fail to meet qualifications required for the in-charge position but the organization is unable to provide additional training and offer new relevant jobs.

d) Their majors are irrelevant to the current jobs resulting in poor performance but their organizations are unable to appoint them to another position.

dd) The performance is recognized as “average but shortcomings exist” for 02 consecutive years; or their annual performance in two years is recognized as “average but shortcomings exist” and “poor” but their organization is unable to offer them new jobs.

e) The performance is recognized as “average” and ”poor” in 02 consecutive years but their organization is unable to offer them new jobs.

g) The total sick leave is equal to the maximum leave stipulated in clause 1, Article 23 of the Law on Social Insurance for 02 consecutive years which is certified by medical examination and treatment facilities and compensated by social insurance firms.

2. Redundancies of permanent employees of administrative authorities and public services providers that have yet to grant the autonomy (hereinafter referred to as autonomous public service providers) due to restructuring.

3. Redundancies of public employees and permanent employees of autonomous public service providers due to restructuring.

4. Redundancies of Chairman of companies, Board members, Directors General, Deputy Directors General, Directors, Deputy Directors, Chief accountants , controllers of state-owned single member limited liability companies due to privatization, transfer, sale, dissolutions, merger, amalgamation, division, separation, bankruptcy or conversion into at least two member limited liability companies or public service provider according to the Decision of competent state authorities; redundancies of Directors, Deputy Directors, Chief Accountants of State plantations or farms due to restructuring under the Decree of 170/2004/ND-CP on restructuring, innovating and developing State forestry plantations dated September 22, 2004 of the Government.

5. Officials who are appointed as authorized representatives of the state contributions at State-owned enterprises finish their tasks but do not appoint to new positions.

6. Employees under payrolls of associations are on the list of redundancies for restructuring according to Decisions of competent authorities.

Article 7. People exempt from downsizing

1. Workers who are on sick leave certified by the competent medical facilities.

2. Officials, public employees and workers who are in pregnancy, on maternity leaves or have babies under 36 months.

3. Workers during their disciplinary probation or criminal prosecution.

Chapter II

DOWNSIZING POLICIES

Article 8. Early retirement

1. Displaced employees stipulated in Article 6 hereof being 50 years old to 53 years old (for men) and 45 years old to 48 years old (for women), 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:
a) Do not have pensions deducted;

b) Receive 03-month salary for each early retirement year

c) Receive 05-month salary for the first 02 working years with full social insurance premiums. From the 21^st working years onwards, each working years with social insurance premiums paid shall be granted a half of 01-month salary.

2. Displaced employees stipulated in Article 6 hereof being from 55 years old to 58 years old (for men) and 50 years old to 53 years old (for women), paying social insurance premiums for at least 20 years shall get their pensions under laws on health insurance and welfares prescribed in points a and c, clause 1 hereof, and shall be granted 03-month salary for each early retirement years.
3. Displaced employees stipulated in Article 6 hereof being from 53 years to 55 years old (for men) and 48 years old to 50 years old (for women), and 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 be granted pensions under laws on social insurance and shall not have pensions deducted.

4. Displaced employees stipulated in Article 6 hereof being from 58 years to 60 years old (for men) and 53 years old to 55 years old (for women), paying social insurance premiums for at least 20 years shall be granted pensions under laws on social insurance and shall not have pensions deducted.

Article 9. Labor transfer to organizations unfunded by the State budget

1. Displaced employees specified in Article 5 hereof working for organizations that are not funded by the State budget shall receive the following allowances:

a) The current 03-month salary;

b) 1/2-month salary for the each working years with full social insurance premiums

2. The policy promulgated in clause 1 hereof shall not apply to employees who are retained as the public service providers converts into enterprises or privatization; or displaced employees who are 57 years old or older (for men) and 52 years or older (for women) paying their social insurance premiums for at least 20 years; or displaced employees who are 52 years old or older (for men) and 47 years or older (for women) paying their social insurance premiums for at least 20 year and working in heavy, dangerous and 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 those working for in areas having region-based allowances of at least 0.7 or higher .

Article 10. Resignation policies

1. Immediate resignation:

If employees stipulated in Article 6 hereof being under 53 years (for men) or under 53 years old (for women) and ineligible for early retirement under clause 1, Article8 hereof voluntarily resign, they shall receive the following allowances:

a) An assistance equal to the current salary of 03 working months;

b) 1/5-month salary for the each working years with full social insurance premiums

2. Resignation after vocational training

Employees specified in Article hereof who are under 46 years old, disciplined, healthy, responsible and take charge of positions irrelevant to their qualifications wishing to resign their jobs, they are provided vocational training and receive the following allowances:

a) The full current monthly salary and still be paid social insurance and health insurance premiums during the vocational training for maximum 06 months;

b) An allowance equal to 06-month salary;

c) 03 month salary after finishing their vocational training courses;

d) A half of monthly salary for the each working years with full social insurance premiums;

The vocation training duration is recognized as working period but it is not included in the seniority.

3. Employees specified in clauses 1 and 2 of this Article have their duration of social insurance premium payment reserved and receive their social insurance benefits in once under laws on social insurance ; and do not benefit from resignation policies under the Decree No. 46/2010/ND-CP on resignation and procedures for retirement of officials dated April 27, 2010 of the Government and the Decree No. 29/2012/ND-CP on recruitment, employment and management of public employees dated April 12, 2012 of the Government.

Article 11. Benefits to former directors or those transferred to lower-ranks with lower allowances

Officials or public employees who are no longer directors or transferred to lower-ranks with lower allowances shall receive the higher allowances to the end of the term for such appointed position. Those their remaining term of the newly appointed posts is under 06 months shall have their higher allowance reserved for 06 months.

Article 12. Allowance calculation methodologies

1. For this Decree, monthly salary includes: rank-based salary or position-based salary or schedule of salary; allowances for positions, extra-seniority or occupational seniority (if any) and differences in reserved allowances (if any) under applicable laws.

2. The monthly salary for calculating allowances specified in Article 8; point b, clause 1 of Article 9; point b of clause 1 , and point d of clause 2, Article 10 hereof shall be the average net monthly salary of the last 5 working years prior to the downsizing. For those work for under 05 years, their monthly salary for calculating allowances shall be the net monthly salary of the whole working duration.

3. Where the displaced employee receiving allowances is rehired by administrative authorities agencies or public services providers funded by the State budget or salary budget of public services providers, such displaced employee must refund the received allowances (except for tuition fees for vocational training regulated in point b, clause 2, Article 10 hereof). Where displaced employees specified in clause 4, article 6 hereof are rehired by State-owned enterprises or privatized State authorities, such displaced employees shall refund all received severance packages.

Authorities, State-owned enterprises and organizations rehiring employees who received severance packages shall get all severance packages back and submit them to the State Budget. Money collected from those specified in clause 4, Article 6 hereof shall be submitted to funds for redundancies due to restructuring of State-owned enterprises.

Article 13. Funding for downsizing

1. The funding for downsizing employees specified in clauses 1 and 2 of Article 6 hereof shall be granted by the State budget, excluding those stipulated in clause 2 of this Article.

2. The funding for the downsizing of employees who are recruited from October 29, 2003 onwards by public services providers and subject to the downsizing as stipulated in points c and d clause 1, Article 6 hereof shall be provided by the regular funding of such providers.

3. The funding for employees stipulated clauses 3 and 6, Article 6 hereof shall be provided by the regular funding of public services providers or associations.

4. The funding for the downsizing of employees stipulated clauses 4 and 5, Article 6 hereof shall be provided by funds for enterprise restructure under applicable laws.

Chapter III

PROCEDURES AND TIME LIMITS FOR DOWNSIZINGS

Article 14. Downsizing procedures

1. Heads of authorities, organization and units shall cooperate with the same-level Communist Party’s Committees, Trade Union and socio-political organizations to execute the downsizing policy as follows:

a) Propagate, disseminate and heighten awareness of officials, public employees and workers of the downsizing policy stipulated hereof, within their administration.

b) Submit downsizing proposals according to the procedures specified in Article 15 hereof the competent authority.

c) Submit downsizing checklists and estimates of the severance package for each displaced employee every 06 months based on the approved proposal to the competent authority.

2. Ministries, ministerial-level agencies and Governmental agencies, non-public services providers established by the Government or Prime Minister and People’s Committees of provinces (hereinafter referred to as Ministries, regulatory authorities and local governments) shall:

a) Direct and instruct their affiliates or members to execute this Decree;

b) Consider approving downsizing proposals submitted by their affiliates or members;

c) Consider approving downsizing checklists and budget estimates for every 06 months.

d) Submit downsizing checklists and budget estimates to the Ministry of Home Affairs and Ministry of Finance.

3. The Ministry of Home Affairs shall verify employees subject to downsizing and submit verification results to the Ministry of Finance.

4. The Ministry of Finance shall verify the estimates of the severance packages, budgets for downsizing and the grant of funding for downsizing.

5. The supervisory authority shall settle all severance packages for displaced employees.

Article 15. Procedures for formulation of downsizing proposals

1. Examine functions and tasks to identify inappropriate tasks and overlapping tasks that should be transferred to other authorities; or tasks needing transferring to subordinates, local governments and public services providers or enterprises.

2. Restructure organizations, reform working rules and administrative procedures, and reduce intermediaries.

3. Restructures officials, public employees and labor contracts as follows:

a) Determine positions, official ranks, public employee’s job titles and professional criteria and required qualifications for each specific position;

b) Evaluate, classify officials, public employees and officials according to criteria and professions (for officials) and job titles (for public employees);

c) Retain qualified officials and public employees;

d) Indentify and make lists officials and public employees or permanent employees under the downsizing.

Article 16. Time limits for submission of downsizing checklists

1. Ministries, regulatory bodies, and local governments shall submit their downsizing checklists and budget estimates for the early- 06-month downsizing to the Ministry of Home Affairs and Ministry of Finance by November 01^st of the year proceeding the downsizing year.

2. Ministries, regulatory bodies, and local governments shall submit their downsizing checklists and budget estimates for the last- 06-month downsizing to the Ministry of Home Affairs and Ministry of Finance by May 01st every year.

3. Any Ministry, regulatory body, and local government failing to submit their downsizing checklists after November 01^st of the year preceding the downsizing year or after may 01^st every year as prescribed in clauses 1 and 2 of this Article shall not be allowed to implement the downsizing policy.

Chapter IV

RESPONSIBILITIES FOR DOWNSIZING

Article 17. Responsibilities of heads of supervisory authorities

1. Reduce payrolls in accordance with procedures stipulated in Article 14 hereof; instruct superior authorities and cooperate with the same-level trade unions to submit their downsizing proposals to the State competent authority.

2. Request the competent authority to consider approving the downsizing proposals, checklists and funding for downsizing for every 06 months.

3. Publish the downsizing proposals and downsizing checklists and implement the downsizing policy in accordance with pro-democracy regulations.

Article 18.Responsibilities of Ministers, Heads of ministerial-level agencies and Governmental agencies, Heads of non-public services provider established by the Government or the Prime Minister

1. Execute the downsizing policy in accordance with the procedure stipulated in Article 14 hereof.

2. Direct and instruct their affiliates or members to execute this Decree.

3. Direct heads of affiliates and members to establish downsizing proposals, to make downsizing checklists and estimates budget for downsizing for every 06 months.

4. Consider approving the downsizing proposal or downsizing checklist within15 working days from the date of receipt of the downsizing statement and proposal, or the downsizing statement and downsizing checklist from their affiliates.

5. Direct the same-level Department of Personnel and Organization and financial institutions to appraise downsizing checklists and submit downsizing budget estimates to the Ministry of Home Affairs and Ministry of Finance every 06 months.

6. Settle all severance packages for displaced employees within 15 working days from the date of receipt of the funding for downsizings from the Ministry of Finance. Submit funding statements to the Ministry of Finance.

7. Aggregate downsizing results and submit downsizing progress reports to the Ministry of Home Affairs and Ministry of Finance.

Article 19. Responsibilities of Presidents of the People’s Committees of provinces

1. Execute the downsizing policy in accordance with the procedure stipulated in Article 14 hereof.

2. Direct and instruct regulatory bodies and People’s Committees of provinces, districts and communes, and public service providers affiliated to the provinces or associations operating within the provinces to execute this Decree.

3. Direct heads of affiliates to establish downsizing proposals, downsizing checklists and to estimate budgets for downsizing for every 06 months.

4. Consider approving the downsizing proposal or downsizing checklist within15 working days from the date of receipt of the downsizing statement and proposal, or the downsizing statement and downsizing checklist from their affiliates.

5. Direct Departments of Home Affairs and Departments of Finance to appraise downsizing checklists and submit their affiliates’ downsizing budget estimates and the local government’s downsizing checklists and budget estimates to the Ministry of Home Affairs and Ministry of Finance every 06 months.

6. Settle all severance packages for displaced employees of their local governments within 15 working days from the date of receipt of the funding for downsizings from the Ministry of Finance. Submit the funding statements to the Ministry of Finance.

7. Aggregate downsizing results and annually submit reports on downsizing progress of their local governments to the Ministry of Home Affairs and Ministry of Finance on December 31st every year.

Article 20. Responsibilities the Ministry of Home Affairs

1. Take charge of and cooperate with the Ministry of Finance to provide guidelines for executing the Decree.

2. Expedite and inspect the implementation of the downsizing policy under provisions hereof.

3. Verify employees subject to the downsizing based on the payoff list submitted by Ministries, regulatory authorities and local governments and submit a written report as the basis for the grant of funding for downsizing within 15 working days from the date of receipt of the valid downsizing statement and payoff lists.

4. Submit the downsizing progress report to the Prime Minister on February 15th every year.

5. Provide instructions on examination and inspection of payroll management and employment granted by State competent authorities. Any authority or organization whose payroll exceeds the granted payroll shall be dealt with and shall cut the excess.

Article 21. Responsibilities the Ministry of Finance

1. Cooperate with the Ministry of Home Affairs to provide guidelines for executing the Decree.

2. Submit the plan for funding allocations for the execution of this Decree to the competent authorities.

3. Verify severance package estimates, downsizing budget estimates and the plan for granting funding to Ministries, regulatory authorities and local governments within 15 working days from the date of receipt of the downsizing statement, downsizing checklists and written notice of the downsizing from the Ministry of Home Affairs.

Article 22. Responsibilities Vietnam social insurance

Vietnam social insurance shall provide professional training and direct the social insurance of provinces to:

1. Collect social insurance premiums under provisions hereof

2. Settle all social insurance benefits to officials, and public employees under provisions hereof

Chapter V

IMPLEMENTATION

Article 23.Complaining, denunciating and redressing

1. Every entity discovering violations of downsizing against this Decree shall have the right and obligation to denounce such violations to the State competent authority under applicable laws.

2. Heads of authorities or responsible units shall take charge of executing downsizings within their assigned competence and in accordance with applicable laws.

3. The downsizing results shall be considered as one of criteria for evaluating the annual performances of heads of agencies, organizations and units.

Article 24. Entry into force

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

Article 25. Responsibilities for implementation

1. The Central Organization Commission, Office of the National Assembly, Office of the President, Supreme People’s Court, Supreme People’s Procuracy and State Audit Office of Vietnam shall instruct authorities and units within their administration to execute the downsizing policy in accordance with this Decree.

2. Ministers, Heads of ministerial-level agencies and Governmental agencies , Heads of Governmental agencies, Heads of non-public services provider established by the Government or Prime Minister and President of the People’s Committees of provinces shall be responsible for the implementation of this Decree./.