Circular No. 31/2016/TT-BLDTBXH dated October 25, 2016 of the Ministry of Labor, War Invalids and Social Affairs on management of employees, salary, remuneration and bonus by organizations that are incorporated and operate as wholly state-owned single-member limited liability companies under the law on securities

THE MINISTRY OF LABOR, WAR INVALIDS AND SOCIAL AFFAIRS

Circular No. 31/2016/TT-BLDTBXH dated October 25, 2016 of the Ministry of Labor, War Invalids and Social Affairs on management of employees, salary, remuneration and bonus by organizations that are incorporated and operate as wholly state-owned single-member limited liability companies under the law on securities

Pursuant to the Government s Decree No. 106/2012/ND-CP dated December 20, 2012, defining the functions, rights, responsibilities and organizational structure of the Ministry of Labor, War Invalids and Social Affairs;

Pursuant to the Government ‘s  Decree No. 51/2016/ND-CP dated June 13, 2016 on management of employees, salaries, bonuses of employees  in wholly state-owned single member limited liability companies;

Pursuant to the Government ‘s  Decree No. 52/2016/ND-CP dated June 13, 2016 on providing for salary, remuneration and bonus to managers single member limited liability companies of which charter capital is wholly owned by the State;

Upon request of  Directors of the Departments of Labor and Wages; the Minister of Labor, War Invalids and Social Affairs hereby issues this Circular providing guidance on management of employees, salary, remuneration and bonus by organizations that are incorporated and operate as wholly state-owned single-member limited liability companies under the Law on Securities.

Section 1. GENERAL PROVISIONS

Article 1. Scope of adjustment

This Circular provides guidance on management of employees, salary, remuneration and bonus by organizations that are incorporated and operate as wholly state-owned single-member limited liability companies under the Law on Securities, including:

1. The Stock Exchange of Hanoi.

2. The Stock Exchange of Ho Chi Minh.

3. The Vietnam Securities Depository.

Organizations that are incorporated and operate as single-member limited liability companies whose charter capital is wholly owned by the State as prescribed in clauses 1, 2 and 3 of this Article shall be referred to as securities trading organizations.

Article 2. Subjects of application

1. Contract employees

2. Members of Control Boards (hereinafter referred to as “comptroller”).

3. Full-time and part-time executive officers, including full-time and part time members of Boards of Directors, Directors General, Deputy Directors General and Chief Accountants.

4. Entities participating in the management of employees, salaries, remunerations and bonuses of employees prescribed hereof.

Section 2.MANAGAMENT OF EMPLOYEES AND COMPTROLLERS, EMPLOYEES AND COMPTROLLERS’ SALARIES AND BONUSES

Article 3. Salary classification, comptrollers’ salaries and bonuses

1. Comptroller’s salaries shall be classified according to the pay scale and payroll compiled by the securities trading organization under the Government’s Decree No.49/2013/ND-CP dated May 14, 2013 detailing a number of Articles of the Labor articles of the Labor Code on wages and salaries and Circular No./2015/TT-BLDTBXH dated April 22, 2015 by the Ministry of Labor, War Invalids and Social Affairs providing guideline for formulation of pay scale and payroll for employees in state-owned single-member limited liability companies.

2. Comptrollers’ salaries and bonuses shall be paid from employee payroll and bonus budget as stipulated in Article 4 hereof.

3. According to regulations on bonus and salary payment, the Board of Directors shall give salary advances, determine and pay salaries and bonuses to comptrollers based on the performance of the control Board and specific comptrollers.

Article 4. Management of employees, determination and payment of salaries, bonuses and salary advance

1. Securities trading organizations shall manage their employees, determine planned payroll budget, piece rate, salary advances and realized payroll and pay salaries and bonuses under section2, Article 9, 10 and 13 Section 3 and 4 of the Circular No. 26/2016/TT-BLDTBXH dated September 01, 2016 by the Ministry of Labor, War Invalids and Social Affairs providing guideline for management of employees, and salaries and bonuses paid to employees in wholly State-owned single-member limited liability companies (hereinafter referred to as “ Circular No.26/2016/TT-BLDTBXH”).

2. For the purpose of determination of the planned average pay rate according to the average productivity and profit under Article 9 of the Circular No.26/2016/TT-BLDTBXH, the average labor productivity shall depend on the total revenue. To be specific:

a) The planned average labor productivity shall be determined according to the following function:

(1)

Where:

W_kh: Planned average labor productivity

ΣT_kh: Total estimated revenue

L_bqkh: Estimated averaged number of employees, calculated according to clause 1 of the Annex to Circular No.26/2016/TT-BLDTBXH.

b) The annual realized average labor productivity (or of the immediately preceding year) is determined according to the following function:

(2)

Where:

W_th:  Annual average realized labor productivity (or of the immediately preceding year).

ΣT_th: Total annual realized revenue (or of the immediately preceding year).

L_bqth: Actual average number of employees in the year (or the immediately preceding year), calculated according to clause 1 of the Annex to Circular No.26/2016/TT-BLDTBXH.

The total revenue (from securities activities, services, finance and other sources of revenue according to the financial regulations) shall be determined in accordance with regulation on financial management of the securities trading organization.

Article 5. Exclusion of objective factors when determining salary budget to employees

1. Objective factors which affect the securities trading organization’s labor productivity and profit prescribed in Article 11 of the Circular No.26/2016/TT-BLDTBXH shall be ignored.

2. In addition to objective factors prescribed in clause 1 of this Article, there are also those causing decreases or increases in revenues from securities activities that affect labor productivity or profits. To be specific:

a) The Stock Exchange’s  revenue from securities activities is affected by the variations of the number of  companies that are listed, register for transactions and have abilities to meet  listing requirements; trading volume and price; number of trading members; value of wining bonds, capital mobilization by issuing bonds; price of Government bonds, treasury bills; value of securities ownership transfer via transaction system of the Stock Exchange; auctioned share volume and value; account balance and transferred balance of future contracts and value of mortgaged assets.

b) For Securities Depositories, their revenue from securities activities is affected by: Volume of annual realized deposited securities; value of first-time registered Government securities in the year and number of stakeholders and number of additional registration; face value and coupon of bonds , treasury bills; the number of times for exercising rights and corresponding number of stakeholders, number and value of security transfer ; value of transfer of security ownership over-the counter of the Stock Exchange; number of depository members, number of correction of securities trading errors, account balances for future contracts; transferred balance  of future contracts and value of mortgaged assets.

For the purpose of determination of average pay rate and payroll budget, in case the revenue from securities activities increases by 7% or more due to objective factors prescribed in point a and b, clause 2 of this Article, the revenue in excess to 7% increase shall not be included in the revenue from securities activities, which is the basis for determination of labor productivity and profit. Where the revenue from securities activities decreases by 3 % or more, it shall be taken into account as the basis for determination of labor productivity and profit.

Section3. MANAGEMENT OF SALARY, REMUNERATION AND BONUS PAID TO MANAGERS

Article 6. Classification of salaries paid to full-time members of Boards of Directors, Directors General, Deputy Directors General and Chief Accountants

1. Salaries of full-time manager shall be classified in accordance with Section 2 of the Circular No.27/2016/TT-BLDTBXH dated  September 01, 2016 by the Ministry of Labor, War Invalids and Social Affairs providing guideline for salaries, remunerations and bonuses paid to managers of wholly state-owned single-member limited liability company (hereinafter referred to as “ Circular No.27/2016/TT-BLDTBXH).

2. The full-time chairman of Boards of Directors shall have the same pay rates as full-time Chairman of Member’s Councils or full-time presidents of companies; full-time members of Boards of Directors shall have the same pay rate as full-time members of Member’s Councils.

Article 7. Determination of salary, remuneration and bonus budgets and payment of salary, remuneration and bonus

1. The planned payroll and remuneration budgets, realized payroll, remuneration and bonus budget and payment of salaries, remunerations and bonuses to members of Boards of Directors, Directors General, Deputy Directors General and Chief Accountants shall be determined and conducted in accordance with Articles 3, 9, 11, 12, 14, 15, 16, 17, 18 and clauses 1, 3, 4, 5 and 6 Article 10 of the Circular No.27/2016/TT-BLDTBXH.

2.Where designating companies have managed to conserve and develop state-owned capital, discharge their debt obligations to the state budget in accordance with laws and regulations, prevent any reduction in labor productivity and have planned profits greater than that earned in the immediately preceding year, the planned average pay rate of a manager shall be determined according to the following function:

TL_bqkh=TL_cb+H_lnxTL_cb(3)

Where:

- TL_bqkh:Planned average pay rate

- TL_cb: Basic pay rate calculated in accordance with clause 1 Article 10 of the Circular No.27/2016/TT-BLDTBXH.

- H_ln: Salary increase factor in comparison with the basic pay rate associated with profits: if the planned profit is less than 100 billion dong, H_lnshall be equal to 0.5; if the planned profit varies from 100 billion dong to smaller than 200 billion dong, H_lnshall be equal to 0.7; if the planned profit is 200 billion dong or more, H_lnshall be equal 1.0.

The average labor productivity shall be determined in accordance with clause 2 Article 4 hereof.

Article 8.  Exclusion of objective factors for determination of salary, remuneration budget

1. Objective factors which affect the labor productivity and profit prescribed in Article 13 of the Circular No.27/2016/TT-BLDTBXH shall be ignored.

2. In addition to objective factors prescribed in clause 1 of this Article, those causing decreases or increases in revenues from securities activities that affect  labor productivity or profits as prescribed in clause 2 Article 5 hereof shall be ignored.

Section 4. IMPLEMENTATION AND EFFECT

Article 9. Implementation organization

1. Directors General of securities trading organizations shall take on obligations specified in Article 17 of the Circular No.26/2016/TT-BLDTBXH dated September 01, 2016 by the Ministry of Labor, War Invalids and Social Affairs.

2. Every Board of Directors of securities trading organization shall:

a) Take on obligations as Members’ Council or Chairman prescribed in Article 18 of the Circular No.26/2016/TT-BLDTBXH and Article 20 of the Circular No.27/2016/TT-BLDTBXH. Submit salary and bonus reports to the owner’s representative agency and the Ministry of Labor, War Invalids and Social Affairs for supervision.

b) Estimate payroll budget and salary advances to comptrollers and to employees at the same time.

c) Submit a realized payroll and bonus plans, comptroller’s performance evaluation reports and employees’ salary and bonus report to the owner’s representative agency at the same time

d) Determine comptrollers’ salaries and bonuses, pay salaries and bonuses to comptrollers and take on obligations assigned after submitting reports to the owner’s representative agency.

3. Comptrollers shall take on obligations to inspection, supervision, verification and make proposals for management of employees, salaries and bonuses under the Charter of the securities trading organization stipulated by the Ministry of Finance.

4. Every representative agency of securities trading organization (the Ministry of Finance) shall:

a) Take on obligations prescribed in Article 20 of the Circular No.26/2016/TT-BLDTBXH and Article 22 of the Circular No.27/2016/TT-BLDTBXH. Give opinions of the annual bonus and payroll budget to the securities trading organization and the Ministry of Labor, War Invalids and Social Affairs for supervision.

b) Take delivery of, review and give opinions of objectives factor affecting the labor productivity and profit as the basis for determination of employees and managers’ salaries.

c) Take delivery of and take into due account of comptrollers’ salary and bonus plans. Where the comptroller’s salary and bonus is determined in contravention of regulations of laws, the representative agency shall direct the Board of Directors to make amendments under regulations of laws.

Article 10. Effect

1. This Circular takes effect December 10, 2016. Policies on management of employees, salaries, remunerations and bonuses shall apply on January 01, 2016.

2. The Circular No.43/2013/TT-BLDTBXH dated December 30, 2013 by the Ministry of Labor, War Invalids and Social Affairs providing guidelines for management of employees, salaries, remunerations and bonuses by organizations that are incorporated and operate as state-owned single-member limited liability companies under the Law on Securities shall expire from the effective date of this Circular.

3. Full-time managers of such organizations shall classify salaries according to the rating of the securities trading organization. After 03 years from the effective date of this Circular, securities trading organizations shall rank salaries according to general provisions of the State.

4. The expenditures for managers and employees’ mid-shift meals shall be conformable to clause 4 Article 22 of the Circular No.26/2016/TT-BLDTBXH and clause 4 Article 25 of the Circular No.27/2016/TT-BLDTBXH dated September 01, 2016 by the Ministry of Labor, War Invalids and Social Affairs.

Any issue arising in the course of implementation of this Circular should be promptly reported to the Ministry of Labor, War Invalids and Social Affairs.

For the Minister

The Deputy Minister

Pham Minh Huan