Decree No. 206/2004/ND-CP dated December 14, 2004 of the Government on labor, salary and income management in state-owned companies

DECREE

ON LABOR, SALARY AND INCOME MANAGEMENT IN STATE-OWNED COMPANIES

GOVERNMENT

Pursuant to the Law on Organization of Government dated December 25, 2001
Pursuant to the Labor code dated June 23, 1994; the Law on amendment and supplement of a number of articles in Labor code dated April 02, 2002
Pursuant to the Law on State-owned enterprises dated November 26, 2003
At the proposal by the Minister of Ministry of Labor, War Invalids and Social Affairs

DECREES

Article 1.Scope of application of regulations on labor, salary and income management in this decree shall include:

1. State-owned companies:

- State owned general corporations;

- Independent State-owned companies

2. Financially independent member the company under the general corporation that was established and invested by the State.

The afore-mentioned corporations and the company shall hereinafter be referred to as the company.

Article 2.Objects of application shall include labors who work on contractual basis  as stipulated in the Labor Code and Deputy General directors, deputy directors, Chief accountants (exclusive of Deputy General directors, deputy directors, Chief accountants who work on contractual basis)

Article 3.Labor management

1. On the basis of the company’s annual workload, quality, requirements as entailed by its annual business and production plan, the company shall make plan of labor use and register the plan with the ownership representative before implementing it.

2. On the basis of the registered plan of labor use, the company shall directly conduct recruitment in accordance with the company’s internal recruitment regulations and sign labor contracts as required by Labor Code;

3. Each year it is responsibility of the company to evaluate the plan of labor use and to provide welfare for redundant employees in accordance with the Labor Code.

Article 4.The company shall use the coefficient of at most twice as much as the general minimum salary level as stipulated by the Government as the basis to salary determination. Once this coefficient is to be employed, the company must meet the following requirements:

1. To make financial contribution to the state budget as required by the Law

2. The average rate of pay raise must be lower than the average rate of productivity increase;

3. Planned profit must be not lower than the realized profit in the previous year except special cases as provided for the Government regulations.

Article 5.The determination of salary units and salary management by the company must be in accordance with the following regulations:

1. Salary unit must be determined on the basis of advanced labor norms and of salary parameters that are in accordance with conditions defined in article 4 of this decree.

2. Salary unit must be registered with the ownership representative before being applied.

Salary unit for the company a special type and in the company operating for public interest that  play an important role in national economy will be appraised by Ministry of Labor, War Invalids and Social Affairs, Ministry of Finance for reporting to the Prime Minister.

3. Salary fund to be used shall be determined according to degree of accomplishment of the production, business, productivity targets and realized profit and  salary will be paid to labors in accordance with the company’s’ internal regulations.

Article 6.Bonus

1. Bonus from the company’s bonus fond shall be determined in accordance with the provisions in Decree No 199/2004/ND-CP dated 3 December 2004 by the Government promulgating the regulations on financial management in State-owned companies and on the management of the State-owned capital invested in other enterprises

2. Bonus for laborers shall be granted in accordance with the company’s regulations on bonus

Article 7.The general director and director of the company shall be responsible for:

1. Making a plan of profit; plan of using laborers; salary unit and registering with the ownership representative in the first quarter each year and sending local taxation office the company’s salary unit as the basis to  for tax purposes;

2. Determining the company’s salary fund and bonus fond to be used;

3. Establishing labor norms; criteria and standards for technical workers; professional criteria and standards for the company’s staff and employees; norms for salary increment; norms for salary payment, norms for bonus payment in accordance with the provisions by the law in such a way that can be ensure democracy, equality, transparency and can encourage talented people, people with advanced professional and technical skill, high productivity to make greater contributions to the company.

4. Strengthening organizational structure and ensuring of sufficient number of qualified officers responsible for labor and salary affairs in the company as required by the ownership representative;

5. Reporting on business results, profits, labor, salary, bonus of the previous year to the representative of the Ownership representative and provincial department of Labor, War Invalids and Social Affairs in their province in first quarter of the planned year.

Article 8.The ownership representative shall have the following responsibility

1. Board of directors:

a) approving the profit plan; plan on using labor force; labor norms; salary unit; criteria and standards for technical levels of workers; professional standards of  the company’s employees and staff; regulations on salary increment, salary category promotion; salary budget, bonus fund, the company’s regulations on bonus  and salary payment;

b) Directing, monitoring and supervising the implementation of this decree;

c) reporting on salary unit applied in the company of special type and the company operating for public interest with important role in the national economy to Ministry of Labors, War invalids and Social Affairs and Ministry of Finance;

d) Deciding on the company’s organizational structure and number of civil workers responsible for labor and salary affairs in the company;

e) Reporting on the result of production, business and profits, the use of labor force, salary, bonus of the previous year to Ministry of Labor, War Invalids and Social Affairs or the line ministry, People’s committees in provinces and cities under central government in the first quarter of the planned year

2. Line ministries, People’s committee in provinces and cities under the central government

a) Receiving the registered profit plan, plan on labor use; salary unit, regulation on salary payment, bonus and reports on the results of production, business, profits, use of labor force, bonus and salary payment in the year before the planned year sent by the companies under its authority  

b) Directing, inspecting and supervising the implementation of regulations in this decree

c) Co-operating with Ministry of Labor, War Invalids and Social Affairs and Ministry of Finance to appraise the salary unit applied for the company of special type and the company operating for public interest with an important role in the national economy

d) Reporting the result in production, business, profits, labor force, salary, bonus of the year before the planned year to leaders of Ministry of Labor, War Invalids and Social Affairs in the first quarter of the planned year

Article 9. Ministry of Labor, War Invalids and Social Affairs shall be responsible for:

1.  providing guidelines for  developing labor norms; criteria and standards on technical levels of workers; professional and specialist criteria and standards for employees and staff; productivity; average salary level; salary units and regulations on salary payment, regulations on bonus in companies;

2. Being the main responsible party and co-operating with Ministry of Finance to appraise the salary unit applied in the company of special type and the company operating for public interest with important role in the national economy.

Article 10.This Decree shall take effect in 15 days after it has been published in the Official Gazette and supersede the Government Decree 28/CP dated 28 March 1997 and the Government Decree 03/2001/ND-CP dated 11 January 2001 on reforms in salary and income management in State-owned enterprises.

The provision in the Decree shall be applied as of 01 January 2005.

Article 11.Ministers, heads of Ministerial equivalents,  Heads of agencies directly under the government and Presidents of People’s Committees in Provinces and cities under central government shall be responsible for implementing this Decree./.