REGULATIONS ON NORMAL RETIREMENT AGE AND ELDERLY WORKERS DUE TO LABOR CODE 2019

In order to ensure the conformity with the scale, structure, quality, status of the health and life expectancy of Vietnamese employees, Labor Code 2019 takes effective from January 01st, 2021 has amended and supplemented several regulations on retirement age. In addition, the Government has issued Decree 135/2020/NĐ-CP stipulates on adjusting retirement age.

1. Retirement age

a. Retirement age under normal working conditions

Currently, the Law has not yet specified what is normal working conditions. However, from the classification of working conditions of the Ministry of Labor and War Invalids, it can be understood that: occupations and jobs with normal working conditions are light and comfortable occupations and jobs; occupations and jobs that are not stressful, toxic or have heavy and toxic targets but are within the permitted safety limits, psychological changes after labor recover quickly and health is not affected.

According to the provisions of Clause 2, Article 169 of the Labor Code 2019, the retirement age of employees under normal working conditions shall be

+ For male: 60 years and 03 months.

+ For female: 55 years and 04 months.

After that, each year increases by 3 months for male workers until they reach 62 years old by 2028 and 4 months for female workers until they reach 60 years old by 2035, according to the roadmap for adjusting the retirement age specified in the Labor Code.

Cases regulated for retirements at the lower age under normal working conditions:

The Labor Code also stipulates some retiring cases at the lower age. Employees in the following cases may retire at a lower age but must not exceed 05 years of age compared to retirement age prescribed above at the time of retirement, unless regulated otherwise by law:

+ Employees with 15 years or more of working in heavy, toxic, dangerous, or particularly heavy, toxic or dangerous occupations or jobs on the list promulgated by the Ministry of Labor, War Invalids and Social Affairs.

In comparison with the previous law, the list of occupations with heavy, toxic and dangerous elements from March 01st, 2021 according to Circular 11/2020/TT-BLDTBXH has been supplemented with a significant number of occupations and jobs such as mine rescuer, pit miner, construction divers, management and exploitation of sea lamps in the Spratly Islands,…

+ Employees with 15 years or more, working in areas with especially difficult socio-economic conditions, including working time in places with regional allowance coefficient of 0.7 or higher before January 01st, 2021.

Currently, the list of regions with especially difficult socio-economic conditions for 2021 is still drafted. However, it is possible to refer to some areas previously prescribed to be particularly difficult socio-economic conditions in several regulations such as: Spratly Island District, Paracel Islands District; mountainous communes as regulated by the local authorities;…

+ Employees with working capacity decrease of 61% or more.

In order to prove this, the employee needs to prepare the examination dossier to implement the retirement benefits for the employees as prescribed in Circular 56/2017/TT-BYT and submit it to the medical examination council for assessing the decrease of working capacity.

+ Employees have the total duration of heavy, toxic, dangerous, or particularly heavy, toxic, dangerous occupations or jobs and working time in areas with particularly difficult socio-economic conditions from full 15 years or more.

b. Cases regulated for retirement at higher ages under normal working conditions

– In the event of the employee and employer could reach an agreement, the employee shall continue working after the retirement age under normal working conditions.

Accordingly, the employees in the above cases will be further adjusted according to the regulations on elderly workers. Specially:

+ The elderly employee has the right to reach an agreement with the employer to shorten daily working hours or to apply the part-time working regime.

+ In addition to the elderly workers’ benefits under the retirement regime, they are entitled to salary and other benefits as prescribed by law, labor contract.

the retirement age of employees under Labor Code 2019

2.  Pension regime

From January 01st, 2021, the provisions of the retirement regime associated with the conditions on pension age under the Law on Social Insurance shall comply with the retirement age and conditions on pension age under the Labor Code 2019.

The law stipulates that employees who are subject to compulsory social insurance, unless otherwise prescribed by the Law on Social Insurance, when they leave their job with full 20 years of social insurance payment or more, they will be entitled to pension if falling into one of the following cases:

+ Being 60 years old for men and 55 years old for women;

+ Male from 55 years old to 60 years old, female from 50 years old to 55 years old and having enough 15 years of doing heavy, hazardous or dangerous occupations or jobs, or extremely heavy, hazardous or dangerous jobs on the list issued by the Ministry of Labor, War Invalids and Social Affairs, the Ministry of Health or having worked at a place with regional allowance coefficient of 0.7 or higher for 15 years before January 01st,2021;

+ Employees with maximum age of 10 years lower than the retirement age of employees as prescribed in Clause 2, Article 169 of the Labor Code 2019 and have 15 years working as coal mining in pits;

+ Persons infected with HIV/AIDS due to occupational risks while performing the given tasks.

Female workers who are cadres, civil servants or work part-time in communes, wards and towns that participate in social insurance when retiring with from 15 years to under 20 years of paying social insurance and reach the retirement age specified in Clause 2, Article 169 of the Labor Code, they shall be entitled to pension.

3.  Important note for enterprise employs elderly workers:

To stabilize the aging workforce, adjusting to increase the retirement age is a common trend implemented in many countries since the 2010s. This not only helps businesses avoid wasting experienced labor resources but also motivates businesses to develop more comprehensive remuneration policies for elderly workers. Here are a few notes for businesses that use this labor source:

– Enterprise is forbidden to use the elderly employee to do heavy, hazardous, dangerous, or extremely heavy, hazardous or dangerous occupations or jobs that have a negative impact on their health, except for circumstance the enterprise can ensure the safety working conditions.

For the acts of using elderly employees to do heavy, toxic or dangerous jobs that adversely affect the health of elderly employees as prescribed, the employer shall be subject to a fine of from VND 10,000,000 to VND 15,000,000.

– Employers have the responsibility to take care of the health of elderly workers at the workplace. Therefore, creating working conditions to extend long-term contracts with elderly workers is one of the issues that businesses need to pay attention to.

According to the recommendation 162 of ILO on adjusting working conditions for elderly workers, after consulting the workers’ representatives or with the participation of their representative organizations, or through collective bargaining, the employer can take following measures at the level of the undertaking:

(a) reducing the normal daily and weekly hours of work of older workers employed on arduous, hazardous or unhealthy work;

(b) promoting the gradual reduction of hours of work, during a prescribed period prior to the date on which they reach the age normally qualifying workers for an old-age benefit, of all workers who request such reduction;

(c) increasing annual holidays with pay on the basis of length of service or of age;

(d) enabling older workers to organize their working time and leisure to suit their convenience, particularly by facilitating their part-time employment and providing for flexible working hours;

(e) facilitating the assignment of older workers to jobs performed during normal day-time working hours after a certain number of years of assignment to continuous or semi-continuous shift work.

In addition to adjusting working conditions, enterprises can use collective agreement or individual negotiations between employer and worker can extend an older worker’s working life, provided the worker chooses to do it and supplies proof that he or she is healthy and fit to do the work.

The above is the entire analysis regarding the latest regulations on retirement age and elderly workers due to Labor Code 2019, along with several note for the enterprise that employ these workers. For detailed advice for retirement roadmap or recommendations of adjusting working conditions, please contact LawPlus via phone +842862779399 or email info@lawplus.com.

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