Laws of Vietnam

DECREE No.28-CP OF MARCH 28, 1997 OF THE GOVERNMENT ON RENOVATING THE MANAGEMENT OF WAGES AND INCOMES IN THE STATE ENTERPRISES

THE GOVERNMENT

At the proposal of the Minister of Labor, War Invalids and Social Affairs,

DECREES:

Article 1.- To set the minimum wage level for calculating wage unit prices in State Enterprises, as follows:

1. The State enterprises shall be entitled to apply regulating coefficient for increasing the minimum wage by not more than 1.5 times of the minimum wage prescribed by the State as basis for calculating wage unit prices. The Ministry of Labor, War Invalids and Social Affairs shall base on the cost of living, the labor wages on the market in each region, branch and the business efficiency to provide detailed guidance for the State enterprises in the application of such regulating coefficient.

2. When such increase regulating coefficient is applied, the principle of not reducing the State budget remittances, especially not reducing the profit remittance as compared to the previous year, must be ensured, except for cases where the State readjusts the selling prices of products or prices of services of enterprises.

3. Annually, based on the price rise index and the economic growth rate, the Minister of Labor, War Invalids and Social Affairs shall, after consulting the Ministry of Finance and the Vietnam General Confederation of Labor, adjust the minimum wage coefficient for calculating appropriate wage unit prices.

Article 2.- The contribution and enjoyment of social insurance and medical insurance by employees and officials in the State enterprises shall still be calculated according to the wage coefficient prescribed in Decree No.26-CP of May 23, 1993 of the Government and the common minimum wage level prescribed by the Government.

Article 3.- The award funds and welfare funds of enterprises shall be implemented in compliance with provisions of Clauses 4 and 5, Article 33 of the Regulation on Financial Management and Business Cost-Accounting at State Enterprises issued together with Decree No.59-CP of October 3, 1996 of the Government.

Article 4.- The Ministry of Labor, War Invalids and Social Affairs shall set the form of wage book to be uniformly applied in the State enterprises. The monthly wages and net incomes of the employees shall be fully recorded in the wage books of the enterprises in accordance with regulations of the Ministry of Labor, War Invalids and Social Affairs to serve as basis for supervising and inspecting the implementation of wage policy and payment of personal income tax as prescribed by the State.

Article 5.- The setting, approval and management of wage unit prices of the State enterprises must satisfy the following requirements:

1. The wage unit prices must be set on the basis of the advanced average labor norm of the enterprises and salary indices prescribed by the State.

2. Ensuring the reasonable average wage relationship among the State enterprises; the highest average wage level actually paid by any enterprise must not exceed the double of the common average wage in all enterprises which are assigned wage unit prices, and ensuring the principle that the wage increase rate must be lower than the labor productivity increase rate.

3. Enterprises having not set labor norms and having no approved wage unit prices shall make the final account of wage fund to be paid only on the total number of laborers actually employed, with the average wage coefficient decided by the unit price-assigning agency and the common minimum wage prescribed by the Government.

Article 6.- The Managing Board or the Director of a State enterprise (for enterprises having no managing board) shall have to:

1. Reorganize the management of labor, labor norms, wages and bonuses in accordance with the stipulations of the Government.

2. Set and register labor norms under the guidance of the Ministry of Labor, War Invalids and Social Affairs.

3. Set wage unit prices on the basis of labor norms and wage indices prescribed by the Government and then submit them to the competent agency for approval in the first quarter of each plan year at the latest.

4. Coordinate with the Executive Committee of the Trade Union in elaborating and publicizing the regulation on wage and bonus payment in the enterprise. Such regulation must ensure the principle of distribution according to labor contribution, wage and bonuses paid to each employee according to his/her labor productivity and work efficiency, encouraging employees with high professional and technical skills.

The regulation on wage and bonus payment must be made known to each employee in the enterprise and registered together with the labor regulation at the provincial/municipal Service of Labor, War Invalids and Social Affairs in accordance with provisions of the Labor Code.

Article 7.- The State management agencies shall have the following responsibilities and powers:

1. The Ministry of Labor, War Invalids and Social Affairs shall:

- Provide enterprises with guidance on methods to set labor norms and register such labor norms at the competent agency.

- Provide enterprises with guidance on methods to set wage unit prices, wage indices, minimum wage regulating coefficient according to the locality or branch for calculating wage unit prices.

- Manage and assign wage unit prices to enterprises of the special category under Decision No.185-TTg of March 28, 1996 of the Prime Minister.

- Announce the common average wage level of all enterprises which are assigned unit prices so as to adjust the highest average wage level actually paid.

- Guide other ministries, branches and localities in supervising and adjusting the labor norms and wage unit prices of the enterprises to ensure reasonable wages and incomes.

2. The Ministries managing branches or sectors shall carry out the registration and management of labor norms and assign wage unit prices to enterprises under their management.

3. The Labor, War Invalids and Social Affairs Services of the provinces and cities directly under the Central Government shall carry out the registration and management of labor norms and assign wage unit prices to the State enterprises under the management by the local administration and joint stock companies with more than 50% capital thereof contributed by State enterprises located in such localities.

4. Annually, the Ministries managing branches or sectors, the Labor, War Invalids and Social Affairs Services of the provinces and cities directly under the Central Government shall have to report to the Ministry of Labor, War Invalids and Social Affairs on the result of registration of labor norms, wage unit prices, on the wage and income situation in the enterprises under their management.

Article 8.- The Ministries managing branches or sectors, the provincial/municipal Services of Labor, War Invalids and Social Affairs, the State enterprises shall organize and consolidate the labor-wage managing system so as to fulfill the managerial tasks and requirements under the Labor Code and the Law on State Enterprises, set labor norms, organize and distribute labor force, set wage unit prices and pay wages according to the productivity, quality and business efficiency of each unit and each laborer in accordance with the State’s provisions.

Article 9.- The Ministry of Labor, War Invalids and Social Affairs shall, after consulting the Ministry of Finance and the Vietnam General Confederation of Labor, concretely guide the implementation of this Decree.

Article 10.- This Decree takes effect from January 1st, 1997. The earlier provisions which are contrary to this Decree are now annulled.

Article 11.- The Ministers, the Heads of the ministerial-level agencies, the Heads of the agencies attached to the Government, the Presidents of the People’s Committees of the provinces and cities directly under the Central Government shall have to implement this Decree.

On behalf of the Government

For the Prime Minister

Deputy Prime Minister

PHAN VAN KHAI