Hoàn thiện quá trình thực hiện chính sách bảo hiểm thất nghiệp tại tỉnh thái nguyên

luận văn

Thai Nguyen University

Socialist Republic of Vietnam

Southern Luzon State University Republic of Philippines

EVALUATING THE IMPLEMENTATION

August, 2013

ACKNOWLEDGEMENTS

I would like to extend my sincere thanks to Thai Nguyen University (Vietnam), International training center (Thai Nguyen University, College of Agricultural and Forestry), Southern Luzon State University (Philippines) for having organized this doctorate training course in business administration training, which I have found a valuable opportunity for me to further upgrade my knowledge and capacity

I feel grateful for my lectures have provided their students with their great knowledge and guidance throughout the course

I am indebted to the administrators of Thai Nguyen College of Economics and Finance, and Vietnam Trade Union University for their facilitation for my attendance

to this course

I owe my deep gratitude to Assoc Prof Dr Do Anh Tai, my supervisor and instructor, for his kind instructions and valuable remarks towards my completion of this thesis

I would also like to say thanks to my relatives, friends and colleagues Without their donations of materials, data processing, and translation, this thesis would not have been made possible

I am indebted to many other people They are writers of useful materials in books, internet, and newspapers

And finally, my big thanks to my family whose encouragement and supports have always been with me from the beginning to completion of this thesis

TABLE OF CONTENTS

ACKNOWLEDGEMENTS i

TABLE OF CONTENTS ii

ABSTRACT v

LIST OF TABLES vii

LIST OF FIGURES viii

CHAPTER I: INTRODUCTION 1

BACKGROUND OF THE STUDY 3

STATEMENT OF THE PROBLEM 5

SIGNIFICANCE OF THE STUDY 6

SCOPE AND LIMITATIONS 8

DEFINITION OF TERMS 8

CHAPTER II: REVIEW OF RELATED LITERATURE AND STUDIES 11

REVIEW OF RELATED LITERATURE 11

Unemployment insurance 11

Coverage of unemployment insurance 19

Conditions for the enjoyment of unemployment insurance 21

Unemployment insurance fund 23

Unemployment insurance regimes 25

Procedures for unemployment insurance regimes 28

REVIEW OF RELATED STUDIES 34

CONCEPTUAL FRAMEWORK 35

CHAPTER III: METHODOLOGY 37

LOCALE OF THE STUDY 37

RESEARCH DESIGN 41

POPULATION AND SAMPLING 41

RESEARCH INSTRUMENTATION 42

VALIDATION OF THE INSTRUMENT 43

DATA GATHERING PROCEDURE 43

DATA PROCESSING METHOD 44

STATISTICAL TREATMENT 44

CHAPTER IV: PRESENTATION, ANALYSIS AND INTERPRETATION OF DATA 46

PROFILE OF RESPONDENTS 46

THE IMPLEMENTATION OF UNEMPLOYMENT INSURANCE IN THAI NGUYEN PROVINCE 51

Coverage of unemployment insurance 51

Conditions for the enjoyment of unemployment insurance 58

Unemployment insurance fund 62

Unemployment insurance regimes 66

Procedures for unemployment insurance regimes 70

CHAPTER V: SUMMARY, FINDINGS, CONCLUSIONS AND RECOMMENDATION 78

SUMMARY OF THE FINDINGS 78

Characteristics of the respondents 79

The respondents ’perception on the implementation of unemployment insurance 80

The differences between the perceptions of employees are grouped in terms of type of unit that employees had worked before unemployment 83

CONCLUSIONS 85

RECOMMENDATION 86

Recommendations on the coverage of unemployment insurance 86

Recommendations on conditions for the enjoyment of unemployment insurance 88

Recommendations on unemployment insurance fund 88

Recommendations on unemployment insurance regimes 89

Recommendations on procedures for unemployment insurance regimes 89

BIBLIOGRAPHY 91

APPENDIX A 94

APPENDIX B 95

APPENDIX C 100

APPENDIX D 104

ABSTRACT

The main purpose of this study is evaluating the implementation of unemployment insurance (UI) in Thai Nguyen province in 2012 and propose some recommendations to improve the implementation of the policy in the coming years

In solving the research problem mentioned previously, this study has the following objectives: (1) to describe the characteristics of the respondents, (2) to determine the perception of the respondents on the implementation of UI in terms of: coverage of UI; conditions for enjoying UI; UI fund; UI regimes; procedures for UI regimes, (3) to compare the perceived implementation of the UI when the respondents are grouped in terms of: type of unit that employees had worked before unemployment, (4) to propose some recommendations to improve the implementation

of UI in Thai Nguyen province in the coming years

In terms of structure, the thesis has five chapters The thesis begins by defining the research problem and questions, and providing a justification for the research study

Chapter one also reviews the research background, and presents definitions of terms, significance and scope of the study

Chapter two examines the UI theory, current UI policy in Vietnam and its implementation This chapter also reviews previous research related to UI

Chapter three discusses aspects of the research methodology including research design, data collection and data analysis methods, and hypothesis testing to support the model Objectives of this chapter are: (1) to justify the research methodology of this study, (2) to explain research methodology used in the study, and (3) to demonstrate how research design, and data collection and analysis can be utilized in this study to answer the research questions outlined in the chapter one

Chapter four presents descriptive findings of the profile of respondents, the implementation of UI in Thai Nguyen province Objectives of this chapter are present gathered data, analyze and interpret about them

Finally, chapter five where findings and conclusions are summarized and recommendation are indicated for the current UI policy and its implementation in Thai Nguyen province

This study attempts to know the status of the implementation of UI in Thai Nguyen province in 2012, especially points out shortcomings of UI and the difficulties and limited problems of implementation process of this policy It also provides valuable recommendations refer to the UI policies promulgate agencies and the UI management agencies in Thai Nguyen province in particular and the country in general, have issued this policy more completely, have many solutions to implement it more effectively

on the evaluation of the respondents have been grouped 69 Table 10: The respondents’ perception on implementation of UI in Thai Nguyen province in terms of procedures for UI regimes 72 Table 11: Implementation of UI in Thai Nguyen province in terms of procedures for

UI regimes based on the evaluation of the respondents have been grouped 73 Table 12: Implementation of UI in Thai Nguyen province based on the evaluation of the respondents have been grouped 75

LIST OF FIGURES

Figure 1 Conceptual Model Showing the implementation of Unemployment insurance

in Thai Nguyen province 36 Figure 2 Map of Vietnam 39 Figure 3 Map of Thai Nguyen province 40

CHAPTER I INTRODUCTION

Today, besides the development of all aspects, the world is faced with many challenges of economic, political and social Along with large uncertainties such as war, violence, crime, social inequality, etc., unemployment is also becoming a hot concern, exceeding all matters of common worrying, especially when the economic financial crisis knock to each individual, each household in each country

Unemployment affects not only for each employee and their families Unemployment of large numbers of individuals will also have very negative impacts

on society: for individuals, for economy, for the nations

However, in market economies, unemployment is inevitable phenomenon It means that if there is a market economy, there is still unemployment The problem posed is to control the allowed unemployment rate According to economists, maintaining a certain unemployment rate can stimulate economic growth But the unemployment rate increase exceeding the permitted level will affect greatly to the socio-economic development of the country Because of the impact of scientific and technological revolution and globalization, unemployment is worsening Unemployment became one of the problematic issues in lots of countries, which influences strongly on the development and stability of economic - political - social status of each country So governments have the responses policies to resolve these two issues depending on their conditions in each period Among them, the UI policies are built or improved in many countries to protect workers avoiding the feeling of uncertainty about the economy and society

When workers lose their jobs, they lose income Hence, one of the positive solutions is to invest to create new jobs However this is not always possible Sometimes putting more money into the not strong capital economy can lead to inflation and economic crisis, exacerbated unemployment There is another solution

to protect workers avoiding the inadequacy of the lost jobs, so that society needs to give them an income to offset income lost through UI This is one of the measures which have been interested in many countries because it not only ensures life for individuals who are unemployed but also contributes to social stability UI is the process of formation and use of funds through the financial contributions of the employee, the employer and the help of the state, in order to support of income for workers in period they have lost their jobs, enabling them to find new jobs in the labor market This has important implications for individual workers and companies, contributing to balancing role in the economy, helping to decrease social stress caused by unemployment That is one of the tools to implement social security policies of each country

Since Vietnam has begun its switch to market economy and integration into the world economy, besides the economic - social achievement, unemployment has been one of the very urgent problems In our labor market, labor supply is greater than labor demand Every year, from 1.1 to 1.2 million people entered the work force, but the labor’s absorptive capacity of the economy is limited In addition, no trained or skilled workers are high, basic training and technical workers is short This is the cause of unemployment or underemployment is increasingly severe Although the labor market needs but the level of workers do not meet the criteria of the job Besides, in the process of industrialization, modernization and economic

restructuring, innovation, sort of state enterprises, quite huge number of workers, so many different cases, are terminated their work contracts Moreover, in the context of economic crisis in recent years, many small and medium enterprises, department accounting about 98% of enterprises in Vietnam, to cut staff, proceed to or went bankrupt, leaving workers lose their jobs The unemployed workers fell into economic difficulties, depressed in spirit, very easy to fall into evils This effects to social order

- security largely

In this situation, UI, as a mode of social insurance and a component of social security, has been built and was officially implemented in 2009

BACKGROUND OF THE STUDY

In Vietnam, UI was adopted formally from 01/01/2009 under the provisions of Law on Social Insurance was enacted in 2006 with the following main contents: coverage of UI; conditions for the enjoyment of UI; UI fund; UI regimes; procedures for UI regimes

UI is a policy to assist the unemployed to replace or partially offset the income

of workers when they lose income due to unemployment and more importantly support the unemployed receive vocational training, supported employment for workers soon have a job, have a stable income and life

Nationwide, the total number of employees was 49.322 million in 2009, nearly 50.393 million in 2010, over 51.398 million people in 2011, the unemployment rate (calculated width in urban areas) was 4.60% in 2009, 4.29% in 2010, 3.60% in 2011 Particularly in Thai Nguyen province, the total number of employees was 665,652 people

in 2009; 677,070 people in 2010; and 685,630 people in 2011; unemployment rate (calculated width in urban areas) was 4.46% in 2009, 4.24% in 2010, and 3.75% in 2011

The author mentions a few figures briefly to help the readers see that the number of people is likely affected by the UI policy in Thai Nguyen province, as well

as across the country, especially in urban areas, is quite large

In such a situation, 4-year experience, the implementation of this policy has made significant achievements, but also has some limitations that should soon be adjust to this policy performs its role in a better way

After being in use, UI has achieved certain success It is one of the policies into practice quickly, are received by the employers, workers in a positive way This

is the right policies, has a direct, practical impacts to the employees, the employers It contributes to ensuring social security in the country in general, in Thai Nguyen province in particular

However, the implementation process UI also generate many problems to be completed, related issues: coverage of UI; conditions for the enjoyment of UI; UI fund;

UI regimes; procedures for UI regimes Many labors did not know, or was not insured

UI, many companies "hide" the UI, contribution and regimes of UI were unreasonable, entitlement procedures were not favorable, there were many scenes of UI fraud, etc

What are the inadequacies of the current UI program? What do difficulties exist in the implementation of UI? What solutions can help to improve the effectiveness of UI? The author has spent a lot of concern before those questions Having all these premises in mind, the researcher attempted to find out successful and limitation of the implementation of UI in Thai Nguyen province, then give some recommendations based on the research results As a law lecturer with passion for researching and teaching law of labor and social security, also derived from the responsibility of a person was born and raised in the land of Thai Nguyen, in the

above problem, the authors decided to select the topic "Evaluating the implementation

of unemployment insurance in Thai Nguyen province" for her research

STATEMENT OF THE PROBLEM

The main purposes of this study are evaluating the implementation of UI in Thai Nguyen province in 2012 and propose some recommendations to improve the implementation of the policy in the coming years

In solving the research problem mentioned previously, this study has the following objectives:

1 To describe the characteristics of the respondents

2 To determine the perception of the respondents on the implementation of UI

in terms of: Coverage of UI; Conditions for the enjoyment of UI; UI fund; UI regimes; Procedures for UI regimes

3 To compare the perceived implementation of the UI when the respondents are grouped in terms of: Type of unit that employees had worked before unemployment

4 To propose some recommendations to improve the implementation of UI in Thai Nguyen province in the coming years

Specifically, it sought answers to the following questions:

1 What is the profile of the respondents in terms of: Age; Sex; Type of unit that employees had worked before unemployment; Type of labor contract/ work contract had been signed before unemployment; Current job status; Time has participated in UI; UI enjoy status

2 What is the perception of respondents on the UI in Thai Nguyen province in terms of: Coverage of UI; Conditions for the enjoyment of UI; UI fund; UI regimes; Procedures for UI regimes

3 Is there significant difference between the perception of the employees are grouped in terms of type of unit that employees had worked before unemployment (who were entitled to UI in 2012) on the implementation of UI in Thai Nguyen province?

4 What would be the proposed recommendations to improve the implementation of UI in Thai Nguyen province in the coming years?

SIGNIFICANCE OF THE STUDY

This study attempts to know the status of the implementation of UI in Thai Nguyen province in 2012, then propose some solutions to improve the implementation of UI in Thai Nguyen province in the coming years, would be beneficial to the following:

- Employees:

This study provides employees aware of the meaning of UI for them more clearly Participation in UI helps for employees to work in a comfortable, because if unfortunately unemployment, UI will create favorable conditions for them to have the opportunity to return to the labor market, stimulating the unemployed find work in a positive way and ready to work Employees also have deep understanding of their rights, their responsibilities and the responsibilities of involved agencies and organizations in the implementation of UI Since then, the employees will perform UI well, to protect their UI rights

- Trade unions in enterprises:

This study helps to organize unions in enterprises, as a collective representation for workers, have a sense of responsibility made UI more clearly to help employees be guaranteed the UI right With the support of unions in the enterprise, employees have more opportunities to participate in UI, and if

unemployed, they will be entitled full and timely coverage Trade unions fulfill their roles on UI to employees is to help business grow, contribute to progress social

- Enterprises:

This study also helps enterprises, as the employers, aware of their obligations

on implementing UI more clearly, thus showing their responsibilities towards their labors in particular, social responsibility in general Good performances of UI, there are many benefits to the enterprises Thanks to UI, if employees loss of works, businesses would not have to pay additional allowances for them Moreover, when employees know if they unemployed they would get much unemployment beneficial, they will be more assured to work for business This will encourage businesses to use labor more efficiently, enabling to develop production and business of enterprises

- The UI policies promulgate agencies and the UI management agencies: Through the evaluation of the implementation of UI in Thai Nguyen province, this study also points out shortcomings of UI and the difficulties and limited problems

of implementation process of this policy The study also provides valuable recommendations refer to the UI policies promulgate agencies and the UI management agencies in Thai Nguyen province in particular and the country in general, have issued this policy more completely, have many solutions to implement it more effectively

- Researcher:

Performing this study is an opportunity for the author to be relatively deep understanding of one of her passion areas - UI This also helps the author to supplement knowledge, serve her teaching at the university where she is working better

- Future Researchers:

This study could provide references for future proponents who wish to venture

a study similar to the nature of this on-going research Thus, basic tenets on the UI and the implementation of UI could serve as resources for other studies

SCOPE AND LIMITATIONS

The primary intent of this study is to evaluate the implementation of UI in Thai Nguyen province in 2012 There were 348 employees who were entitled to UI in Thai Nguyen province used as respondents in this study

Measurement of the implementation of UI in Thai Nguyen province is limited

to the use of questionnaires with a limited number of involved people Checklist is

developed for the purpose of the study

The time frame of this study covered the period from January 2012 to April 2013

DEFINITION OF TERMS

- A definite term labor contract is a contract in which the two parties

determine the term and the time for termination of the validity of the contract as a period of twelve (12) months to thirty six (36) months;

- A labor contract is an agreement between the employee and the employer on

the paid job, working conditions, and the rights and obligations of each party in the labor relationship

- A working contract is an agreement in writing by an officer or officer is

recruited and the head of public service units of the location of employment, wages, treatment regime, working conditions rights and obligations of each party

- An employee shall be a person of at least fifteen (15) years of age who is able

to work and has entered into a labor contract

- An employer shall be an enterprise, body, or organization, or an individual who

is at least eighteen (18) years of age, employing and paying wages to an employee

- An indefinite term labor contract is a contract in which the two parties do not

determine the term and the time for termination of the validity of the contract

- Service unit of the State is organization which is held by the competent

authority of the State, political organizations, political organizations, socio - established under the provisions of law, have legal status, service providers public, state management service

- Large enterprise is a business which is not on the scale of small and medium

enterprises

- Small and medium enterprise is a business with a total capital of 50 billion

dongs or less, using no more than 100 employees if it operates in the field of trade and

services, and is a business with a total capital of 100 billion dongs or less, using no more than 300 employees if it operates in other areas

- Social insurance means the guarantee to fully or partially offset a laborer's

income that is lost or reduced due to his/her sickness, maternity, labor accident, occupational disease, unemployment, retirement or death, on the basis of his/her contributions to the social insurance fund

- The labor force (economic activity population) includes all persons aged 15

years or more have a job and unemployed people in the observation period

- The social insurance organization is a non-business organization functioning

to materialize the social insurance regimes and policies, to manage and use the social

insurance funds under the provisions of the “Law on social insurance”

- The unemployed are those not working but seeking employment and willing

to work to generate income in cash or kind in the observation period, including those

who have never worked Unemployed also include those have no active job search in the observation period because they are arranged a new job after the observation period, who were suspended without pay, with or without time limit or those not actively seeking employment because they cannot find the notion that job

- The unemployment rate is the percentage of unemployment than labor force

(economic activity population)

- Trade Union means a great socio-political organization of the working-class

and laborers Trade Unions are founded on the voluntary basis and are a component part of the political system of the Vietnamese society, placed under the leadership of the Communist Party of Vietnam Trade Unions are representatives of cadres and civil servants, public employees, workers and other laborers (hereinafter referred to as laborers), together with state agencies, economical organizations, social organizations shall care and protect for laborers’ legitimate and legal rights and interests Trade Unions join in state management, eco-social management, inspection; examination, supervision of activities of state agencies, organizations, units, enterprises; and mobilization, propagation for laborers to study, improve knowledge, professional skill, observe law, build and defend the socialist fatherland of Vietnam

- Unemployment insurance (UI) is a federal program whereby eligible

unemployed persons receive cash benefits for a specified period of time These benefits are paid out of funds derived from employer, employee and government contributions

CHAPTER II REVIEW OF RELATED LITERATURE AND STUDIES

This chapter presents the discussion of topics that served as background information in conducting this study

REVIEW OF RELATED LITERATURE

Unemployment insurance

Unemployment insurance concept

UI is a federal program whereby eligible unemployed persons receive cash benefits for a specified period of time These benefits are paid out of funds derived from employer, employee and government contributions (www.entrepreneur.com/encyclopedia)

Hai Pham Van (2010) wrote: “UI is the process of organizing and using focus monetary fund - the UI fund - is formed by the contribution of stakeholders (employees, employers and support state) to ensure a stable life for workers and their families facing risks of employment”

On the other hand, Hong Do Thu (2010) said that: “UI is all legal, make regulations on the contributions, the use of the UI fund, the payment of unemployment allowance to offset income for workers lost employment and performance measures for the unemployed to return to work”

Thu Le Thi Hoai (2008) writes: "UI is a part of social insurance to protect employees in case they lose their jobs In addition to the payment of benefits for the unemployed, UI was the link between the unemployed to the labor market, such as job training, retraining, job brokerage, career counseling, support funding for the unemployed up now"…

Milan Vodopivec and Minna Hahn Tong (2008) in their work named “China: Improving UI” stated that: “The objective of a UI program is precisely that implied by its name: compensation for income loss due to unemployment The program provides income protection to workers by partly replacing their lost wages with social insurance payments Social insurance mimics market insurance arrangements but deviates from actuarial principles Such payments help cushion the reduction in consumption in the wake of job loss - that is, they smooth consumption - and may also help alleviate poverty Viewed from a broader, societal perspective, other objectives of the UI program include encouraging workers to learn new skills, providing workers with the means to conduct more extensive and more effective job searches, redistributing income from high - to low - wage earners, and increasing output and efficiency by promoting restructuring of enterprises or encouraging workers to accept higher wages and thus higher-productivity - but also riskier - jobs Depending on the level of development of the economy and labor market, these objectives may vary, and the relative importance of these objectives may also change

as these circumstances change With economic development, the emphasis may shift

to preserving consumption so that the program becomes a consumption-smoothing tool by offering a higher level of benefits”

Milan Vodopivec and Minna Hahn Tong (2008) also stated that UI as part of

the general labor market risk management framework They said that in order to

design the UI program appropriately, it should be recognized that there are various labor market risk management mechanisms - informal and formal, private and public - and that they interact in many important ways These mechanisms can be divided into three categories: (1) those that reduce the risk of unemployment, reducing the

probability of becoming unemployed or increasing the probability of leaving unemployment if unemployed; (2) those that mitigate that risk, reducing the impact of

a future unemployment spell, and (3) those applied in response to the undesirable event, known as coping mechanisms Within all three categories, informal and formal mechanisms are usually available Formal mechanisms include both market-based and public mechanisms The labor market risk management framework thus enables one

to position the UI program in the context of other mechanisms that may be used to manage the risk of unemployment and thereby allows one to pinpoint diverse interactions that usually exist among them Two types of interactions are particularly important: Interactions with other policies and programs; Interactions with private risk management mechanisms

Characteristics of unemployment insurance

Tiep Nguyen (2011) said that UI is one of many national social economic policies However, this policy has distinct characteristics:

- Subject to the application of UI are in working age, with labor, lost his job and is ready to return to work

- The purpose of UI is not only to supply the unemployment benefits but also

to put the unemployed back to the labor market

- UI comes from labor relations but made are mainly associated with the field work The collection and payment of insurance, financial assistance for unemployed workers to stabilize life is tied to their employment, education or vocational training, job placement, held temporary jobs for the unemployed and implementation of policies to support the unemployed self practice, businesses receive support unemployed people into work

The role of unemployment insurance

According to Tiep Nguyen (2011), UI is a very important role in the economic life - of every national society, that is:

- UI incomes are partially offset for workers when they lose a job

In labor relations unavoidable cases workers lost their jobs, so the relationship should be mutual interaction between three parties: The employers, insurance agencies and social workers offset to ensure income for workers when they lose a job The employer shall contribute to the UI funds for laborers working for themselves and employees also have the responsibility to contribute part of their salaries to their own insurance The contribution of the employer and employee is required and in accordance with the level of play, play regularly for social insurance agencies Social Insurance Agency was assigned the task of managing revenues and expenditures and

UI when the insured (the employees) are eligible to get a new set of UI benefits

- UI is a tool to redistribute income

In fact, only one department workers lose their jobs, become unemployed Therefore, the effect of unemployment inevitably less than the number of people contributed to the UI fund, established the principle of UI "take cover the majority of the few" This principle shall redistribute income among workers with incomes ranging between high-income and low income, between those who contribute regularly and steadily into the UI fund now, through the implementation of social justice

- UI encourages workers to work energetically

When employees are working, they have income, even if they lose their jobs, they are entitled to unemployment benefits Thus, workers have "safety prop" to ensure his life when work is temporarily unavailable This will help workers get on

with the work, actively work to increase revenues, increased UI, assured of the insurance policy when necessary

- UI fund formed to do business development

Because raising compulsory UI for workers, as well as the employers and the support of the state budget should have accrued a centralized monetary fund During idle time, the fund may invest a part of the economic activity for profit, increase income for UI fund This investment has contributed to business development, while ensuring the safety of the UI fund against loss price to pay UI benefits for workers

- UI facility attachment between the interests of the State and the employees

Social standpoint, UI is a means of spreading risks, losses in both space and time, a means of sharing the risks damage to the people, from the ability to increase settlement risks, damage to the small number of workers have UI

On the government side, UI payments for employees are spending less income when they are working, but still have a good deal of risk, loss, life tough for workers and their families, contributing to stability and social security, but for glowing employers and employees as well as that which is beneficial and protects their rights

Implementing Agency of unemployment insurance - Vietnam Social Insurance

A brief history of formation and development of Vietnam Social Insurance

Before 1995, the social insurance is implemented by both Labor - Invalids and Social Affairs and the management team Since Social Security was born and came into effect from 01.01.1995 the implementation of social insurance policies have a fundamental change in the way it has assigned a well-defined functional state of security management social functioning and social insurance career

Vietnam Social Insurance was established by Decree No 19 dated 02/16/1995

of the Government, as a system is organized hierarchically, centralized and uniform from the central to local levels to implement the professional activities of social insurance and have the following structure:

- In the Central Vietnam Social Insurance

- In the provinces and cities directly under the Central Social Insurance provinces and centrally-run cities (hereinafter referred to as provincial Social Insurance) under the Vietnam Social Insurance

- In the districts, towns and provincial cities as social insurance districts, towns and provincial cities (collectively, the District Social Insurance) under the provincial Social Insurance

Vietnam Social Insurance has legal status, independent accounting and are protected by the State, its own seal, bank accounts, headquartered at No 7 Trang Thi - Hoan Kiem - Ha Noi

Management functions of the State Social Insurance agency assigned to Labor

- Invalids and Social Affairs Functioning of social insurance is assigned to the new organization - Vietnam Social Insurance done Vietnam Social Insurance shall be administered by the state Department of Labor - Invalids and Social Affairs on Social Insurance, Ministry of Health on health insurance, the Ministry of Finance of fiscal regime for social insurance, health insurance

Functions, tasks of the system of Vietnam Social Insurance

According to Decree No 94 dated 22/8/2008 of the Government, the Vietnam Social Insurance is an agency of government, functional implementation mode, social policy, UI, health insurance; organization revenue and expenditure social insurance,

UI, medical insurance, management and use of funds: social insurance, UI, Health insurance provided law

Functionally, the main task of the Vietnam Social Insurance includes:

- To issue guidelines on procedures, expertise and professional conduct settlement regime and policies of social insurance, unemployment insurance, medical insurance and income, social insurance payments, security unemployment insurance, Health insurance prescribed by law to issue individual documents and document internal management industry Vietnam Social Insurance

- Organize information dissemination, communication and dissemination of the regime, policy and legislation on social security, UI, health insurance and organized exploitation, registration, management the participants of social insurance,

UI, health insurance as prescribed by law

- Organize the collection of contributions for social insurance, UI, health insurance agencies, units, organizations, employers and individuals in accordance with law To receive funding from the state budget to cover the switch to modes of social insurance, UI, health insurance as prescribed by law

- Receipt of documents, settlement and payment organization of sickness, maternity, work accidents and occupational diseases; retirement, unemployment, death; convalescence rehabilitation following illness, maternity and after treatment of occupational accidents and occupational diseases; medical examination as prescribed by law

- Management and use of the social insurance fund, UI, health insurance, including: retirement, survivorship; funds accidents and occupational diseases; fund sickness and maternity; funds Voluntary social insurance, UI, medical insurance fund focused on the principles of unity, openness, transparency, proper purposes in accordance with the law organizing the insurance accounting social health insurance

in accordance with the law

- Organize contracts, monitoring contract performance with the examination and treatment are qualified, professional standards, and monitoring techniques to provide medical services and treatment, to protect the rights patients with medical insurance card and abuse prevention; introduction laborers who did the inspection impaired workers at the Medical Assessment Board under the provisions of law

- Directing and guiding the professional services for social insurance Ministry of Defense, Ministry of Public Security, Government Information Department, in collaboration with the Ministry of Social Insurance Defense, Ministry of Public Security, the Cipher Government management of the implementation of social insurance, health insurance in the Ministry of Defense, Ministry of Public Security, The Government Information Department

- Defining the functions, tasks, powers and organizational structure and the relationship of the subordinate units; allocation decisions to the payroll for the units of payroll agency competent state, public employers, employees and management organizational structure, staffing, personnel, public officials and employees in accordance with law

- To coordinate with state agencies, the social and political organizations, social organizations at the central and local stakeholders with social insurance to solve problems related to the implementation of policies of social insurance regime as prescribed by law

- Provide adequate and timely information about the play, the right to attend ¬ reachable entitled to, procedures for social insurance, UI, medical insurance when the employee, the employer union activities or requirements Provide adequate and timely documentation, relevant information requested by the agency estimated competent

- In addition to the above specific tasks of the Vietnam Social Insurance shall perform duties and powers by the Government, the Prime Minister delivered

Organizational structure of the system of Vietnam Social Insurance

- Regarding the organizational system: hierarchy management, including 3 levels: central, provincial and district levels Each level has legal status, marked, accounts and offices;

- Structure: Social Insurance in Vietnam, there are 18 units This included 12 organizations assisting the General Manager and 06 subordinate units

Coverage of unemployment insurance

Under the provisions in Article 80 of Law on Social Insurance, UI shall compulsorily apply to:

- Laborers are Vietnamese citizens working under labor contracts or working contracts of indefinite term or a term of between full twelve months and thirty six months for employers

- Employers include state agencies, non-business units, people's armed force units; political organizations, socio-political organizations, socio-professional-political organizations, socio-professional organizations, other social organizations; foreign agencies and organizations, international organizations operating in the Vietnamese territory; enterprises, cooperatives, individual business households, cooperative groups, other organizations and individuals who employ ten or more laborers

Nhung Dang (2011) stated that: “Under the provisions of the Social Insurance Law, employers who participate in UI is to employ 10 employees or more Actually, this provision has become barriers to workers and employers use under 10 employees that wish to participate in UI, because these units use less than 10 employees are

usually small ventures, where workers with high risk of job loss should be considered

to support the protection if they do not participate in UI, they are very much marginalized

Cam Phong (2011) also said: “The specified units of the UI objects involved must have 10 or more employees can not currently be fair to the unit with nine employees or less and those employees working in small businesses (easier to take the more medium and large enterprises) On the other hand, this condition is easy to assume the legal phenomenon arises, do not pay UI costs of businesses, leading to the assessment of UI participation rates incorrect”

The Ministry of Labor, Invalids and Social Affairs stated that: “Businesses employing less than 10 employees, employees working under contract for less than 12 months have not been insured unemployment These are people who have a high possibility of job loss, they are to be supported but not participate in UI” (www.molisa.gov.vn)

Thanh Kim (2012), in other words, wrote: “The current regulations do not have age limits on participation UI, which is no age limit UI entitlement Therefore, in practice, there was the phenomenon of the working age labor, eligibility pensions, registration procedures remain unemployed for unemployment benefits Once completed unemployment benefits beginning on pension procedures

Dung Pham Do (2012): In a large number of employees are not engaged by the UI law:

First, more than 60% of units, enterprises employ less than 10 employees, of which a large volume of small and micro enterprises only 1 to 2 people Statistics of

the Vietnam Social Insurance in 2010 only 49% of the units enrolled UI than the total

of units participating in compulsory social insurance in general, the remaining 51% of units not enrollment of UI This suggests that the bulk is still working and has not been involved benefits of UI

Second, under the provisions of the Law on social insurance, workers UI must meet two conditions: firstly, contract labor or employment contracts of 12 months or more; Monday the employees working in organizations, businesses employing 10 or more workers Missing 1 of 2 conditions above are not employees participate UI, thus not entitled to unemployment regime, vocational training, job search support of UI

Third, now has the potential of labor UI participate if excluding state officials still less Participants with UI is limited, although labor groups should be insured unemployment especially low-income earners, job insecurity, workers in the informal sector is not enough conditions for participation in this type of insurance

Conditions for the enjoyment of unemployment insurance

Under the provisions in Article 81 of Law on Social Insurance, unemployed persons are entitled to UI when they fully satisfy the following conditions:

- Having paid UI premiums for full twelve months or more within twenty four months before they become unemployed;

- Having registered their unemployment with the social insurance organization;

- Having not yet found a job within fifteen days after the date of making unemployment registration

As stipulated in Article 81 of the Law on social insurance in Vietnam, Unemployed persons are entitled to UI when they fully satisfy the following

conditions: Having paid UI premiums for full twelve months or more within twenty four months before they become unemployed; Having registered their unemployment with the social insurance organization; Having not yet found a job within fifteen days after the date of making unemployment registration These conditions laid down are necessary, but some people may take advantage of the tight rules for personal gain

Nhu Tran (2012) stated that: “Besides the actual unemployment because of the dissolution, bankruptcy and labor cuts of the business, there are many active workers applied for leave to be entitled to UI The problem is that the authorities do not take measures to verify the case entitled to apply for UI industry is real or fake unemployment and unemployment concepts are not clear at present An Officer of a job placement center, said: "The redundant workers who businesses can not sort a job

is unemployed Now, the employees leaving job actively, the employee being disciplined to also receive UI is not appropriate

He also said that: “Some companies have created conditions for the workers to receive unemployment benefits They arranged for employees intermittent leave, when employees have to pay UI for 12 months to receive UI, soon after the re-signing The employee is still receiving full 3 months of unemployment benefits even though they did

go back to work elsewhere or even in the old unit”

Thanh Kim (2012) said: “The wide gap defined between the mold closing time

UI is also a loophole, leading to workers after paying UI for the time the lowest (12 for 24 months before losing their jobs) will be applied for leave to proceed unemployment benefits, then continued to sign new labor contracts with other units or with the old unit They continue to participate in UI in the lowest period (12 months) and keep on the enjoyment of UI procedures Even some employers to create

conditions for posted workers entitled to UI in a way: they break labor contract with a term of 36 months to 3 contracts End of each contract with a term of 12 months, they help employees complete UI beneficiaries registration dossiers”

Unemployment insurance fund

Under the provisions in Article 102 of Law on Social Insurance:

- Sources for formation of the fund

+ Laborers' payment of 1% of the monthly salary or remuneration on which UI premiums are based

+ Employers' payment of 1% of the fund of monthly salaries and remuneration of laborers who participate in UI on which UI premiums are based

+ The state's monthly budgetary support is equivalent to 1% of the fund of the salaries and remuneration of laborers insured by UI on which UI premiums are based, which is transferred once a year

+ Profits from activities of investment from the fund

+ Other lawful sources of revenues

Under the provisions in Article 103 of Law on Social Insurance:

- Use of the fund

+ To pay unemployment allowances

+ To support job training

+ To support job seeking

+ To pay health insurance premiums for persons the enjoyment of unemployment allowances

+ To pay management costs

+ To make investment to preserve and develop the fund

Under the provisions in Article 30 of Decree No 127/2008/ND-CP:

- Manage the UI Fund

+ Social Insurance of Vietnam to implement the revenue and expenditure, management of the UI fund and open a deposit account UI Fund in the State Treasury system and the commercial banking system of the State The balance of deposit accounts is deposit interest rate prescribed by the State Treasury and the State-owned commercial banks

+ Each year, the social insurance institutions are responsible for the settlement

of revenue and expenditure of UI funds; expenses in accordance with management

Chung Pham Van (2012) wrote: “The management of UI funds also unreasonable Currently, UI charges due to the social insurance sector made but the receipt, payment of UI decisions issued by the labor, war invalids - social performance, which caused overlapping and not unity, the loose connection to push responsibility or liability is not done in accordance with the law, strict control income and expenditure activities, mode of payment, payment conditions, in the implementation of UI for employees, incurred negative, corruption, waste, ”

Nguyen Pham (2012) was worried about the breakdown of UI fund He said that: “According to Department of Employment, Ministry of Labor, Invalids and Social Affairs, the number of registered unemployed in 2011 increased 77% over

2010, up 68% I/2012 quarter over the same period in 2011 Many businesses still do not participate in the UI program, while registered unemployed workers increased sharply The reason is: companies pay low wages, working conditions are not guaranteed, so do not attract workers

Ministry of Planning - Investment said: in the first 6 months of 2012 with about 22,000 companies go bankrupt or stop production As predicted, in the last 6 months will have an equal number of bankruptcies continued, lead to many more unemployed workers Not to mention the number of unemployed workers who fake, the workers sacked by the rules is very large Of course, UI fund will be greatly affected and at risk of rupture”

Dung Pham Do (2012): Number of compulsory subjects involved are huge and very well reflected by actual data However, the collection of UI is actually still very low compared with the need to collect, requiring the necessary time to promote the dissemination of UI policies to workers and users labor

Unemployment insurance regimes

Under the provisions in Article 82 of Law on Social Insurance:

- Unemployment allowance

+ The monthly unemployment allowance is equivalent to 60% of the average monthly salary or remuneration of six consecutive months before unemployment on which UI premiums are based

+ The period of the enjoyment of unemployment allowance is stipulated as follows:

Three months, if UI premiums have been paid for between full twelve months and under thirty six months;

Six months, if UI premiums have been paid for between full thirty six months and under seventy two months;

Nine months, if UI premiums have been paid for between full seventy two months and under one hundred and forty four months;

Twelve months, if UI premiums have been paid for between full one hundred and forty four months

+ Suspension from enjoyment of unemployment allowance

Persons who are on unemployment allowance shall be suspended from the enjoyment of unemployment allowance in one of the following cases: Failing to observe regulations on compilation of social insurance dossiers; being put in detention

+ Termination of unemployment allowance:

Persons who are on unemployment allowance are not entitled to such allowance in one of the following cases: Their period of the enjoyment of unemployment allowance has expired; They have found a job; They perform the military service obligation; They are on retirement pension; They have twice refused

to take up jobs recommended by the social insurance organization without plausible reasons; They fail to observe regulations on compilation of social insurance dossiers for three months in a row; They settle abroad; They serve a decision on application of administrative handling measures at reformatory, education camp, medical establishment or serve an imprisonment sentence which is not suspended; They die

Under the provisions in Article 83 of Law on Social Insurance:

- Vocational training support

Persons who are on unemployment allowance shall be supported in vocational training for a period of no more than six months The support level is equivalent to the level of expense for short-term vocational training in accordance with the law on vocational training

Under the provisions in Article 84 of Law on Social Insurance,

- Job-seeking support

Persons who are on unemployment allowance shall be provided with employment consultancy and recommendation free of charge

Under the provisions in Article 85 of Law on Social Insurance,

Under the provisions of the social insurance law, the UI regimes include:

unemployment allowance, vocational training support, Job-seeking support, health insurance

According to Hien Van, (2012) unemployment benefit amount is not large, but for the time workers lost their jobs and not earning money, this is more attention means to sustain life

On the other hand, Thanh Kim (2012) said that: “Many workers registered higher UI premiums in the six months before an active unemployment to high unemployment allowance (Law on Social Insurance prescribe the monthly unemployment allowance is equivalent to 60% of the average monthly salary or remuneration of six consecutive months before unemployment on which UI premiums are based) in order to profit”

The Ministry of Labor, Invalids and Social Affairs stated that: “Along with the payment of unemployment benefit, the consultancy, job placement and vocational training support is considered an important task of UI policies to help workers quickly reintegrate into the labor market However, the fact held at the local shows, after three

years of implementation, the unemployed are only interested in getting as many grants, but not really interested in the roots of the policy is supported vocational assistance, counseling, introduction of new jobs, so the efficiency of this work is too low” (www.molisa.gov.vn)

To explain for this, the Ministry of Labor, Invalids and Social Affairs said that

“The low level of support vocational training, vocational training support time short, causing difficulties for the workers” (www.molisa.gov.vn)

(Law on social insurance - Article 8 Vocational training support - Persons who are on unemployment allowance shall be supported in vocational training for a period of

no more than six months The support level is equivalent to the level of expense for short-term vocational training in accordance with the law on vocational training)

Nhung Dang (2011) said: “Most workers are only interested in money for unemployment benefits but have not seen the need and the importance of vocational training support This shows that the propagation of UI policy has not been properly, leading to workers is vague about the UI”

Moreover, Giang Tay (2010) also wrote: “The re-training and job placement for workers in recent years has not done much, causing the UI regime is such as food aid accounts by paying subsidies for the unemployed”

Procedures for unemployment insurance regimes

Under the provisions in Article 126 of Law on Social Insurance:

- Laborers shall submit dossiers to the social insurance organization, includes: + The written request for enjoyment of UI indemnities, made according to a form set by the social insurance organization

+ A copy of the expired labor contract, working contract or the agreement on termination of the labor contract, working contract or the certification by the last employing unit of the lawful unilateral termination of the labor contract or working contract

- The social insurance organization shall settle the case within twenty days after the date of receipt of the valid dossier; in case of non-settlement, it shall reply in writing, clearly stating the reason therefore

According the guiding documents of the Law social insurance about UI, process UI payments been concretized as follows:

- The employers go to the social insurance agencies to closing social insurance book, certification contribution UI time and get back social insurance book;

- The unemployed met their employers to grab social insurance books; The unemployed go to The Center for Job placement (belonging Department of Labor - Invalids and Social) for unemployment registration;

- The unemployed proposed dossiers to requesting unemployment benefits at the Center for job placement;

- The Center for Job placement considers the dossiers to submit The Department of Labor - Invalids and Social to decide;

- The Department of Labor - Invalids and Social make Decision insurance unemployment enjoyment and send it to The Center for Job placement and the unemployed;

- The Center for Job placement send the decisions and paid listing to The social insurance Agency of provinces or city;

- The unemployed go to The social insurance agency of district (or province)

to get the health insurance card, unemployment allowance or receive monthly

payments through bank account (ATM card) and submit social insurance book (to determine receive benefits), submit old health insurance card (if any) or to receive money from the Representative payment in commune

- Monthly, the unemployed notified their employment status to The Center for Job placement

It can be said that Vietnam is a country where UI is done later - 2009 The countries that made the UI earliest are Denmark - 1907; Canada - 1940; France - 1958

Ministry of Labors - Invalids and Social Affairs (2011) compared UI of Vietnam and other countries around the world as follows:

In Vietnam, the UI participants who are working under labor contracts or work contract and employers who have 10 or more workers In Denmark, UI participants have graduate students seeking employment or in Bahrain UI participants have people are looking for work at the first time

In Vietnam, officials have work contract involved UI and elected representatives are not involved In Denmark the Danish allows both elected officials and military to participate UI In Canada, the army was involved, elected representatives are not allowed In contrast, in Bahrain, the Army was not involved, the elected representatives are allowed This is completely different to Argentina, South Korea, and Thailand They do not prescribe government officials, elected representatives, the military involved UI

In addition, foreign workers are not entitled to participate in UI in Vietnam This

is similar to provisions in Argentina, Thailand, In contrast, in Bahrain, Canada, Denmark, France and South Korea, foreign workers are allowed to join the UI

In many countries, including Vietnam, the number of work months needed to be entitled to UI is within 24-36 months 12 months preceding the job loss In Canada is

420-700 hours (approximately 12-20 weeks); in France is 4 months within 28 months preceding the job loss if younger than 50, or 4 months within 36 months preceding the loss if older work; in South Korea is 180 days in the 18 months preceding the job loss;

in Thailand is six months within 15 months preceding the job loss

Unemployment benefit level in Vietnam is 60% of monthly salary Meanwhile, this allowance is 50% in Argentina for the first 4 months then lower, 60% for the first time a job in Bahrain, 55% in Canada, the highest is 90% Danish; in France is 75% for low income and 57% for high income, 50% for the unemployed in South Korea and Thailand

Duration of unemployment allowance in Vietnam is 3 - 12 months This time

is different in other countries, such as 4 - 12 months in Argentina, but older workers can be added 6 months and 6 months in Bahrain and Thailand; 14 - 45 weeks in Canada; 24 months in Denmark; 4 - 24 months in France, 3 - 8 months in Korea

Agencies operate UI in each country is different In Vietnam, the social insurance agencies are responsible for collection and payment of unemployment benefits, the Department of Employment is responsible for processing applications for insurance, Department of Labor - Invalids and Social Affairs is responsible for making decision In Argentina, the tax office is responsible for collecting money to pay UI, Social Security agency is responsible for processing applications for insurance, making decisions and paying UI In Bahrain, Social Security agency is responsible for collecting UI and UI paid, the Ministry of Labor is responsible for handling applications for UI and enjoying making decisions In Canada, the tax office

is responsible for collecting UI as Argentina but is responsible for order processing, decision making and payment of unemployment benefits is the Canadian service In