Workers' Protection Fund in Case of Business Bankruptcy: International Experience and Implications for Vietnam

This study highlights the essential need to establish hedge funds to protect workers in the event of business bankruptcy, addressing the persistent problem of unpaid social insurance contributions affecting workers' rights in Vietnam. Based on the 2025 Rehabilitation and Bankruptcy Law, key personnel from Huy & Partners emphasized the priority right to pay wages and insurance contributions, as well as early intervention measures to protect workers. The study references several ILO standards and hedge fund models in France, Germany, and the United Kingdom to draw lessons on providing immediate financial support when businesses become insolvent. This leads to important implications for Vietnam, including reaffirming the priority right to payment and establishing a subrogation mechanism for the fund's management. This hedge fund should be integrated into the existing social insurance system, utilizing a portion of existing insurance contributions to ensure sustainable liquidity. The authors also suggest applying technology for faster online payments, helping workers access their benefits promptly without having to wait for complex bankruptcy procedures. Last but not least, the reserve fund should only act as a "last resort" to prevent businesses from abusing or exploiting the policy.

KEYWORDS: Hedge fund, Social insurance, Employees, companies, Bankruptcy.

This paper was presented at the conference titled 'Protecting the Rights, Wages, and Social Insurance of Employees in Cases of Enterprise Bankruptcy, Dissolution, or Absconded Employers', held at Ton Duc Thang University, Ho Chi Minh City in April 2026. It is part of a series of activities under the National-level Scientific Research Project commissioned by the Vietnam General Confederation of Labour (Grant No. ĐTNV.09/24-CĐ), led by Dr. Vu Anh Duc.