Pursuant to Article 45 of the Labor Code, in case of transfer of the
ownership or the right to use corporate properties, Employers take the
following responsibilities:
- Set up a plan
to employ labour pursuant to the Labor Code[1];
- Calculate
statutory retrenchment allowances to pay Employees who must terminate LCs
according to the said labour employing plan[2];
- Employees who
continue to be engaged will be re-trained for further employment, and they
will be assigned to part-time jobs in the enterprises after transfer of
the ownership or the right to use corporate properties according to the
said labour employing plan. Upon termination of LCs, the next Employers
shall calculate severance or retrenchment allowances as provided for by
the Labor Code to pay Employees for their actual working time; and
severance allowances to pay Employees for their actual working time at the
enterprises prior to the transfer of the ownership or the right to use
properties including the period of employment in the state sector when
Employees are recruited for the last time to the enterprise that carried
out the transfer of the ownership or the right to use properties before
01/01/1995[3]; and
- In cases
where Employers, after the transfer of the ownership or right to use
corporate properties, continues to transfer the ownership or the right to
use corporate properties in part or in whole, Employers before and after
the transfer of the ownership or the right to use properties shall also
take the same responsibilities as aforesaid.
Thus, upon implementing the transfer of the ownership or the right to use
corporate properties, enterprises as Employers must first set up the plan to
employ labour. Based on the plan to employ labour, if Employees are assigned to
new jobs at the enterprises after transferring the ownership or the right to
use properties, LCs with recent Employers will terminate and the next Employers
shall calculate severance or retrenchment allowances as provided for by the
Labor Code to pay Employees for their actual working time; and severance
allowances to pay for Employees for their actual working time at the
enterprises prior to the transfer of the ownership or the right to use properties.
In other words, the responsibility for former Employers to pay Employees
severance allowances for their actual working time will be succeeded and
carried out by the next Employers after transferring the ownership or the right
to use properties.
In addition, it should be noted that, according to the regulations, recent
Employers must pay Employees severance allowances within 7 days of terminating
LCs. In case of any late payment of severance allowances, the Employer will be
sanctioned for administrative violations and pay interest over delayed
severance allowances calculated at the maximum interest rate applicable to
non-term deposits announced by the State Bank of Vietnam at the time of penalty
on severance allowances
[4].
- Salary level serving as the basis for payment of
severance allowances
When Employers pay Employees severance allowances, the salary serving as the
basis for calculating severance allowances will be counted as the average
salary of an LC for the 6 consecutive months before an Employee leaves or loses
his/her job, including the following
[5]:
- Salary level
calculated according to the job time or title based on salary scale and
payroll as stated by Employers in accordance with the labour legislation,
which is agreed upon by Employers and Employees. For Employees receiving
piecework or lump sum salaries, the salary rate is the one calculated over
the time to determine the product unit price or lump sum salary.
- Salary allowances
to compensate for such factors as labour conditions, job complexity,
living conditions and labour attraction extent[WU1] [WU2] , which are agreed upon by Employees and
Employers while the agreed contractual salary has not yet been covered or
insufficiently covered, such as salary allowances; and
- Additional
amounts defining the specific figures along with the agreed salary level
in the LC and paid regularly in each salary period agreed upon by
Employees and Employers.
[1]Article 45 Labor Code
[2]Article 15.2 Decree 05/2015/NĐ-CP dated 12/01/2015 and Article 49 Labor Code
[3]Article 15.2 Decree 05/2015/NĐ-CP dated 12/01/2015 and Articles 48 and 49 Labor Code
[4]Article 8 Decree 95/2013/NĐ-CP dated 22/08/2013 as amended and supplemented by Decree 88/2015/NĐ-CP dated 07/10/2015
[5]Articles 8.1 and 4 Circular 47/2015/TT-BLĐTBXH dated 16/11/2015
