Circular No. 32/2016/TT-BLDTBXH dated October 25, 2016 of the Ministry of Labor, War Invalids and Social Affairs guiding the management of employees and remunerations in deposit insurance of Vietnam

THE MINISTRY OF LABOR, WAR INVALIDS AND SOCIAL AFFAIRS

Circular No. 32/2016/TT-BLDTBXH dated October 25, 2016 of the Ministry of Labor, War Invalids and Social Affairs guiding the management of employees and remunerations in deposit insurance of Vietnam

Pursuant to the Government’s Decree No. 106/2012/ND-CP dated December 20, 2012 on the functions, missions, authority and organizational structure of the Ministry of Labor - Invalids and Social affairs;

Pursuant to the Government’s Decree No. 68/2013/ND-CP dated June 28, 2013 on details and guidelines for the implementation of the Law of Deposit insurance;

Pursuant to the Government’s Decree No. 51/2016/ND-CP dated June 13, 2016 on the management of employees and their remunerations in single-member limited liability enterprises in which the Government holds 100% of the charter capital;

Pursuant to the Government’s Decree No. 52/2016/ND-CP dated June 13, 2016 on the management of managerial personnel and their remunerations in single-member limited liability enterprises in which the Government holds 100% of the charter capital;

At the request of the Head of the Department of Labor - Salary;

Minister of Labor - Invalids and Social affairs promulgates the Circular on guidelines for the management of employees and remunerations in Deposit Insurance of Vietnam

Part 1. GENERAL PROVISIONS

Article 1. Scope of adjustment

This Circular stipulates guidelines for the management of employees and remunerations in Deposit Insurance of Vietnam.

Article 2. Subject of application

1.Employees working under a labor contract in conformity to the Labor Code.

2.Managerial personnel include the Chairperson and members of the Board of Directors, General Director, Director, Deputy General Directors, Vice Directors, Chief accountant, Controllers (except General Director, Director, Deputy General Directors, Vice Directors or Chief accountant employed under a labor contract).

3.Bodies, organizations and individuals involved in the management of employees and remunerations according to this Circular.

Part 2. MANAGEMENT OF EMPLOYEES AND THEIR REMUNERATIONS

Article 3. Management of employees, planning of salary budget, prepayment of salary from the budget, determination of salary budget attained, apportionment of salary and incentives.

1.Deposit Insurance of Vietnam shall manage employees, plan the average salary level and the salary budget, advance salary, determine the salary rate and the salary budget attained, apportion salary, determine the incentive budget and apportion incentives for employees according to Part 2; Article 9, Article 10, Article 13, Part 3 and Part 4 of the Circular No. 26/2016/TT-BLDTBXH dated September 01, 2016 by the Ministry of Labor - Invalids and Social affairs onthe management of employees and their remunerations in single-member limited liability enterprises in which the Government holds 100% of the charter capital (hereinafter referred to as the Circular No. 26/2016/TT-BLDTBXH).

2.Deposit Insurance of Vietnam shall specify the average labor output and profit in the following manner upon planning the average salary level and salary budget and defining the salary budget attained according to Section 1 of this Article:

a) The average labor output shall be based on the total turnover minus the salary-excluded total expenses according to the guidelines annexed to the Circular No. 26/2016/TT-BLDTBXH.

b) Profit is replaced by the total turnover minus total expenses.

The total turnover that computes labor output and profit shall consist of the total revenues from annual investments of idle funds before recorded as income; revenues from the deposit insurance operation and revenues from other activities as defined in financial management regulations of Deposit Insurance of Vietnam.

Article 4. Exclusion of object factors upon determination of employees’ salary

1.The following objective factors affecting labor output and total turnover minus total expenses shall be excluded from the calculation of the employees salary:

a) Objective factors specified in Section 1, Article 11 of the Circular No. 26/2016/TT-BLDTBXH.

b) The government s decisions intrude directly on Deposit Insurance of Vietnam’s total turnover minus total expenses; for instance, amendments to the deposit insurance fee framework or to the  payout cap; charter capital supplementation; revisions to the interest rate of Deposit Insurance of Vietnam s deposits in the State Bank; revisions to the deposit insurance fees chargeable by deposit insurance providers; changes to the interest rate of government bonds or treasury bills or cessation of issuance thereof; stipulation of the level of aids for insolvent deposit insurance providers, engagement in political missions, maintenance of social welfare, balancing of supply and demand in the economy, restructuring and settlement of bad debts of deposit insurance providers.

c) Deposit Insurance of Vietnam has to pay depositors premiums to deposit insurance providers, which shrinks the investment fund (due to the decrease in the specialized reserve fund).

2.Deposit Insurance of Vietnam has to quantify objective factor(s) that alter the labor output and total turnover minus total expenses to lessen or enlarge the factors that aggrandize or suppress the labor output and total turnover minus total expenses, respectively, upon the calculation of the average salary level and planning of the salary budget for employees.

3.Deposit Insurance of Vietnam has to reassess its actualization of objective factors affecting the labor output and total turnover minus total expenses attained in comparison with those planned in order to exclude such factors from the calculation of the actual salary budget for employees.

Part 3. MANAGEMENT OF REMUNERATIONS FOR MANAGERIAL PERSONNEL

Article 5. Adjustment and promotion of pay grade for managerial personnel

1.The adjustment and promotion of managerial personnel’s pay grade upon the re-ranking of Deposit Insurance of Vietnam or in other events shall be governed by Part 2, Circular No. 27/2016/TT-BLDTBXH dated September 01, 2016 by the Ministry of Labor - Invalids and Social affairs on guidelines for the delivery of remunerations to managerial personnel in single-member limited liability enterprises in which the Government holds 100% of the charter capital (hereinafter referred to as the Circular No. 27/2016/TT-BLDTBXH).

2.The pay grade for the Chairperson of the Board of Directors of Deposit Insurance of Vietnam, when defined according to Section 1 of this Article, shall be equal to that of the Chairperson of the Members Council or the Chairperson of the enterprise. The pay grade for members of the Board of Directors of Deposit Insurance of Vietnam shall be equal to that for members of the Members Council.

Article 6. Salary budgeting, determination and dispensing of remunerations and advances to managerial personnel

1.The planning of the salary budget, remunerations and average salary level; prepayment of remunerations; determination of the actual salary budget and incentive fund, and payment of remunerations and incentives to managerial personnel of Deposit Insurance of Vietnam shall be subject to Article 3, Article 9, Article 12, Article 14, Article 15, Article 16, Article 17, Article 18, Article 19 and Section 1, 3, 4, 5, 6, Article 10 of the Circular No. 27/2016/TT-BLDTBXH.

2.The average salary level shall be planned according to the following base salary and its increasing coefficient in adherence to the total turnover minus total expenses (referred to as H) if Deposit Insurance of Vietnam preserves and develops the state capital, the average labor output does not decline and the planned total turnover minus total expenses is higher than that attained in the immediately preceding year:

a) If the total turnover minus total expenses planned in the year is below VND 200 billion, H shall be no more than 0.5 times the base salary.

b) If the total turnover minus total expenses planned in the year ranges from VND 200 billion to less than VND 500 billion, H shall be no more than 0.7 times the base salary.

c) If the total turnover minus total expenses planned in the year is VND 500 billion or higher, H shall be no more than 1.0 times the base salary.

3.If the average labor output is lower than that attained in the immediately preceding year though Deposit Insurance of Vietnam preserves and grows the state capital while planning a higher total turnover minus total expenses than that attained in the immediately preceding year, the average salary level planned according to Section 2 of this Article shall be reduced by 0.5% for every 1% inferiority of the average labor output planned to that attained in the immediately preceding year.

4.If the average salary level planned according to Section 1 and Section 2 of this Article is lower than that attained in the immediately preceding year though Deposit Insurance of Vietnam preserves and enhances the state capital while planning a total turnover minus total expenses higher than or equal to that attained in the immediately preceding year, the average salary level planned shall be equal to that attained in the immediately preceding year.

5.Deposit Insurance of Vietnam shall adhere to the following rules when planning the salary budget, remunerations and average salary level; prepaying remunerations; determining the actual salary budget and incentive fund, and paying the remunerations and incentives to managerial personnel of Deposit Insurance of Vietnam according to Section 1, 2, 3 and 4 of this Article:

a) The average labor output and profit as the basis of the calculation of the salary budget, remunerations and average salary level shall be specified according to Section 2, Article 3 of this Circular.

b) The exclusion of objective factors affecting the labor output and total turnover minus total expenses shall be subject to Article 4 of this Circular.

Part 4. IMPLEMENTATION PROVISIONS

Article 7. Implementation organization

1.Board of Directors of Deposit Insurance of Vietnam shall be responsible for conducting the duties of the Members Council or Chairperson of the enterprise as defined in Article 18 of the Circular No. 26/2016/TT-BLDTBXH and Article 20 of the Circular No. 27/2016/TT-BLDTBXH. Remuneration reports to the agency representing the owner shall also be delivered to the Ministry of Labor - Invalids and Social affairs for joint supervision.

2.Controllers of Deposit Insurance of Vietnam shall be responsible for performing the Controller’s duties defined in Article 19 of the Circular No. 26/2016/TT-BLDTBXH and Article 21 of the Circular No. 27/2016/TT-BLDTBXH.

3.Vietnam State Bank shall be responsible for carrying out the duties of the agency representing the owner as defined in Article 20 of the Circular No. 26/2016/TT-BLDTBXH and Article 22 of the Circular No. 27/2016/TT-BLDTBXH.

4.Ministry of Labor - Invalids and Social affairs shall be responsible for:

a) Conducting the duties concerning the owner’s rights and obligations towards Deposit Insurance of Vietnam as assigned by the Government.

b) Cooperate with Vietnam State Bank in supervising the remunerations for employees and managerial personnel in Deposit Insurance of Vietnam; inspect the implementation of remuneration policies in Deposit Insurance of Vietnam.

Article 8. Effect

1.This Circular takes effect on December 10, 2016. Principles defined in this Circular come into force as of January 01, 2016.

2.Deposit Insurance of Vietnam shall specify the cost of shift meal for employees and managerial personnel according to Section 4, Article 22 of the Circular No. 26/2016/TT-BLDTBXH and Section 4, Article 25 of the Circular No. 27/2016/TT-BLDTBXH.

Deposit Insurance of Vietnam and other entities shall report difficulties that ensue during the process of implementation to the Ministry of Labor - Invalids and Social affairs for timely guideline and revision./.

The Minister

Dao Ngoc Dung