Draft Revised Law On Employment: Significant Proposal On Unemployment Insurance For Fired Employees

On the morning of May 7th, at the 9th session of the National Assembly, the discussion regarding the Draft Revised Law on Employment attracted significant attention, especially concerning regulations related to the unemployment insurance (UI) scheme for employees.

One of the most notable proposed amendments, which garnered significant interest and proposals from National Assembly deputies, is the removal of the regulation stipulating that employees who are fired or disciplined to be terminated are not eligible for unemployment insurance benefits.

Receiving valuable feedback from the deputies, the National Assembly Standing Committee directed the revision and officially removed this regulation from the draft Law presented to the National Assembly this time. This is considered good news, opening up opportunities for this specific group of employees to access UI policies upon job loss.

The report on receiving feedback, explaining, and revising the draft Law was presented by Mr. Nguyễn Đắc Vinh, Chairman of the Committee for Culture and Social Affairs, on behalf of the National Assembly Standing Committee. The report clearly stated this change and demonstrated the spirit of innovative thinking in lawmaking. The draft Law this time includes 8 chapters and 58 articles, having been streamlined compared to the draft presented at the 8th session.

Ineligible Cases For Unemployment Benefits According To The New Draft

The Draft Revised Law stipulates in detail the cases where employees are not eligible for unemployment benefits in Article 40. Accordingly, in addition to the removal of the regulation regarding those fired or disciplined to be terminated, the following cases remain ineligible for unemployment benefits:

• Employees unilaterally terminating their labor contracts illegally as stipulated by the Labor Code.
• Employees unilaterally terminating their work contracts not in accordance with the Law on Public Employees.
• Employees resigning/leaving work when eligible for retirement pension.
• Employees who are currently employed.
• Employees who are performing military service, public security service, or permanent militia duty.
• Employees who are studying for a period exceeding 12 months.
• Employees who are serving a decision for compulsory education or compulsory rehabilitation.
• Employees who are in temporary detention or serving a prison sentence.
• Employees who are emigrating abroad.
• Employees who are working abroad under a contract.
• Employees who are deceased.

Provisions On The Benefit Level And Duration Of Unemployment Benefits

Regarding the benefit scheme, Article 41 of the draft law stipulates:

• Benefit Level: Monthly shall be 60% of the average monthly salary on which unemployment insurance contributions were paid during the 6 most recent months of UI contributions before the termination of the labor contract, work contract, or cessation of work. The maximum benefit level shall not exceed 5 times the regional monthly minimum wage announced by the Government applicable in the last month of UI contribution.
• Duration of Benefits: Calculated based on the number of months of UI contributions. Having contributed for a full 12 to 36 months, the employee is eligible for 3 months of unemployment benefits. Thereafter, for every additional full 12 months of contribution, the employee shall be entitled to an additional 1 month of unemployment benefits, but the total duration of benefits shall not exceed 12 months.

Significant Change Regarding The Reservation Of Ui Contribution Period

Another notable point in the draft Law is the removal of the regulation regarding the reservation of the UI contribution period. Many deputies proposed removing the regulation that UI contribution periods exceeding 144 months shall not be reserved for calculating unemployment benefits for a subsequent claim.

The National Assembly Standing Committee noted that this content was not originally in the provisions of the current Law but was stipulated in Circular No. 15/2023/TT-BLĐTBXH dated December 29, 2023, issued by the Ministry of Labour – Invalids and Social Affairs. This content had been added to the draft Law when it was presented to the National Assembly at the 8th session. Therefore, in the spirit of innovative thinking in lawmaking and incorporating feedback from National Assembly deputies, the National Assembly Standing Committee directed the revision to exclude this content from the draft Law this time. This implies that employees’ UI contribution periods will be reserved for subsequent claims without being limited to 144 months as previously stipulated in the Circular.

The proposed amendments in this Draft Revised Law on Employment are expected to bring better benefits and ensure social security for employees who unfortunately lose their jobs, including in cases of being fired or disciplined to be terminated.