CIRCULAR

AMENDING THE LABOR, WAR INVALIDS AND SOCIAL AFFAIRS MINISTRYS CIRCULAR No. 13/2003/TT-BLDTBXH AND CIRCULAR No. 14/2003/TT-BLDTBXH OF MAY 30, 2003, WHICH GUIDE THE IMPLEMENTATION OF A NUMBER OF ARTICLES OF THE GOVERNMENTS DECREE No. 114/2002/ND-CP OF DECEMBER 31, 2002, REGARDING WAGES

In furtherance of the Governments Decree No. 114/2002/ND-CP of December 31, 2002, detailing and guiding the implementation of a number of articles of the Labor Code regarding wages, the Ministry of Labor, War Invalids and Social Affairs issued Circular No. 13/2003/TT-BLDTBXH of May 30, 2003, guiding the implementation of a number of articles of Decree No. 114/2002/ND-CP regarding wages of laborers working in enterprises operating under the Enterprise Law (below referred to as Circular No. 13/2003/TT-BLDTBXH for short), and Circular No. 14/2003/TT-BLDTBXH of May 30, 2003, guiding the implementation of a number of articles of Decree No. 114/2002/ND-CP regarding wages of laborers working in Vietnam-based foreign-invested enterprises and foreign or international agencies and organizations (below referred to as Circular No. 14/2003/TT-BLDTBXH for short).

In the course of implementation, some provinces, cities and enterprises have asked for more specific regulations on the formulation of wage scales and tables and increase of wage grades in the above Circular No. 13/2003/TT-BLDTBXH and Circular No. 14/2003/TT-BLDTBXH. In order to creat conditions for enterprises to strictly implement the provisions of law, ensuring laborer interests; after consulting the Vietnam General Labor Confederation, the Vietnam Chamber of Commerce and Industry and concerned ministries and branches, the Ministry of Labor, War Invalids and Social Affairs guides amendments as follows:

1. To amend Clauses 1 and 2, Section III of Circular No. 13/2003/TT-BLDTBXH and Clauses 1 and 2, Section III of Circular No. 14/2003/ND-BLDTBXH as follows:

1. Wage scales and tables under Clauses 1 and 3, Article 5 of Decree No. 114/2002/ND-CP are specified as follows:

a/ Enterprises shall formulate wage scales and tables, technical criteria and grades, titles and professional criteria as a basis for signing labor contracts and collective labor agreements, identifying wage funds, paying wages, increasing wage grades and settling other benefits for laborers.

b/ The formulation of wage scales and tables must adhere to the principle prescribed in Clause 1, Article 5 of Decree No. 114/2002/ND-CP, specifically:

- The difference between two wage grades should encourage laborers to improve their professional and technical qualifications, accumulate their experience and develop their talent; the difference between two consecutive wage grades must be at least 5%;

- The lowest wage grade in a salary scale or table applicable to laborers practicing occupations or doing jobs that require skill training must be at least 7% higher than the region-based minimum wage level prescribed by the Government;

- The wage level applicable to hazardous and dangerous or extremely hazardous and dangerous occupations or jobs must be at least 5% higher than that applicable to occupations or jobs under normal working conditions. The list of hazardous and dangerous or extremely hazardous and dangerous occupations and jobs is provided by the Ministry of Labor. War Invalids and Social Affairs.

c/ Enterprises shall select the method specified in Appendix 1 to this Circular (not printed herein) or apply other appropriate methods to formulate wage scales and tables.

d/ When formulating or modifying wage scales or tables, enterprises shall consult grassroots trade-union executive committees or provisional trade-union executive committees and publicize them within enterprises.

dd/ Enterprises shall register wage scales and tables (including modified ones) with stale management agencies in charge of labor in provinces or centrally run cities where they are headquartered before publicizing them within enterprises for application, specifically:

- Enterprises set up after the effective date of this Circular shall, within 6 months after starting operation, formulate and register their wage scales and tables;

- Operating enterprises which have formulated their wage scales and tables but not yet registered or have registered their wage scales and tables which, however, are inconsistent with the provisions of this Circular shall, within 3 months from the effective date of this Circular, register their wage scales and tables or modify and re-register them according to regulations.

A dossier of registration of wage scales and tables comprises:

- An official letter of application for registration;

- Wage scales and tables formulated or modified by the enterprise;

- A list of criteria and conditions for each title or group of titles of occupations and jobs in wage scales and tables;

- Opinions of the enterprises grassroots trade-union executive committee or provisional trade-union executive committee.

e/ Within 15 working days after receiving a complete registration dossier, the state management agency in charge of labor in the province or centrally run city where the enterprise is headquartered shall notify in writing that the enterprises wage scales and tables have been registered. Also within this time limit, if detecting that the enterprises wage scales and tables have been formulated and registered inconsistently with the provisions of Clauses 1 and 2, Section III of this Circular, the agency shall request in writing the enterprise to re-formulate those wage scales and tables according to regulations. The provincial/municipal state management agency in charge of labor shall keep secret the enterprises registered wage scales and tables.

2. Wage-based allowances

Enterprises may set wage-based allowances or apply the wage-based allowance regimes prescribed by the Government for state companies in order to attract or encourage laborers practicing occupations or doing jobs that require a higher responsibility or in more hazardous and dangerous working conditions or environment, which, however, have not set been specified in wage levels of wage scales and tables formulated by enterprises.

Enterprises shall register wage-based allowances together with their wage scales and tables with local state management agencies in charge of labor.

2. To amend Clause 4, Section V of Circular No. 13/2003/TT-BLDTBXH and Clause 4, Section V of Circular No. 14/2003/TT-BLDTBXH as follows:

4. Wage-grade increase

Wage-grade increase under Clause 2, Article 6 of Decree No. 114/2002/ND-CP is specified as follows:

a/ Enterprises shall coordinate with grassroots trade-union executive committees or provisional trade-union executive committees in elaborating regulations on annual wage-grade increase within enterprises. Those regulations must ensure fairness and incentive for laborers with high professional and technical qualifications and good skills and many contributions to enterprises, and be publicized within enterprises.

Wage-grade increase regulations must specify:

- Persons eligible for wage-grade increase;

- Conditions and criteria for wage-grade increase and ahead-of-time wage-grade increase; applicable to each title or each group of titles of occupations or jobs;

- Wage-grade increase duration applicable to each title or each group of titles of occupations or jobs;

- Time for consideration of annual wage-grade increase for laborers.

b/ Annually, based on wage-grade increase regulations, enterprises shall draw up wage-grade increase plans and increase wage grades for laborers and publicize them within enterprises.

c/ Regulations on wage-grade increase for laborers must be indicated in labor contracts and collective labor agreements.

3. This Circular takes effect 15 days after its publication in CONG BAO.

To annul Clauses 1 and 2, Section III, and Clause 4, Section V, of Circular No. 13/2003/TT-BLDTBXH of May 30, 2003, of the Ministry of Labor, War Invalids and Social Affairs, guiding the implementation of a number of articles of the Governments Decree No. 114/2002/ND-CP of December 31, 2002, regarding wages of laborers working in enterprises operating under the Enterprise Law; Clauses 1 and 2, Section III, and Clause 4, Section V, of Circular No. 14/2003/TT-BLDTBXH of May 30, 2003. of the Ministry of Labor, War Invalid and Social Affairs, guiding the implementation of a number of articles of the Governments Decree No. 114/2002/ND-CP of December 31, 2002, regarding wages of laborers working in Vietnam-based foreign-invested enterprises and foreign or international agencies and organizations.

In the course of implementation, line management ministries, provincial/municipal Peoples Committees and enterprises should report arising problems to the Ministry of Labor, War Invalids and Social Affairs for consideration and settlement.