Enhancing income security measures and employability programs for the unemployed and vulnerable workers in Viet Nam

In Viet Nam, the 2008 global financial and economic crisis exacerbated several issues of the labour market and the labour law limits in terms of protection of those who lost their job. Many workers lost their jobs due to the economic slowdown leading to bankruptcy and lay-offs among enterprises in difficulties. Many other workers suffered of income losses as their working hours reduced. In January 2012, 1.3 million Vietnamese are unemployed, while more than 4.5 million others are seeking part-time jobs. As a response to the concern of major lays-off, Viet Nam implemented an unemployment insurance (UI) scheme with the issuance of the Decree 127 on December 2008. The Decree 127 guides the implementation of the UI-related provisions of the Social Insurance Law (2006). Premiums collection started in 2009, and first UI benefits were paid on 1 January 2010. As per June 2011, about 7.3 million workers were covered under the UI scheme, which represents 81 per cent of those legally covered but still less than 15 per cent of the active population. In addition, during the 18 months review of the UI scheme, the following priority issues have been identified: (1) Low efficiency of the claiming process; (2) Low coverage among the labour force;(3) Weak control and inspection mechanisms to enforce proper use of the scheme; (4) Lack of accurate financial projections in a context of extension of entitlements to 6 months; (5) Low availability and utilization of active labour market programmes provided such as vocational training and employment support services. To support the improvement process of UI policy and performance of the system, this project is designed for 3 years (2012-2014) with 3 following objectives: Immediate objective 1: By the end of the project, the UI policy, legislation and procedures are improved to ensure its functional efficiency, wider coverage of workers, equal and fair accesses of male and female workers to benefits and services. Immediate objective 2: By the end of the project, the financial sustainability of the UI scheme is reviewed and improved. Immediate objective 3: By the end of the project, active labour market policies and programmes (ALMPs) to promote employment and employability of the unemployed, those at risk to lose their job, vulnerable workers and unemployed youth are set up The Project is developed based on the final draft of the ILO – Vietnam Decent Work Country Programme for the period of 2012-2016 (Decent Work Country Programme or DWCP) that was agreed among ILO and its partners in Viet Nam. The Project will set in motion activities directly leading to Priority #02 of the DWCP “Promoting equitable and inclusive growth through social protection and addressing decent work needs of disadvantaged and vulnerable groups”, which is in turn incorporated in Focus Area 2 of the UN One Plan 2012-2016 for Viet Nam. The project will continue the on-going One-UN funded project “strengthening mechanisms for UI implementation” and also complements the three years ASEAN UI Project.

Project symbol

VIE/12/51/OUF

Admin unit

CO-Hanoi

Start date

02/12/2012

End date

28/02/2017

Total allocation

258597

Total expenditure

Status

Closed

258588

Development Partners

Multi Partner Trust Fund Office, UNDP

Country/Countries

Viet Nam

Outcomes

Creating and extending social protection floors