Decree No. 50/2013/ND-CP dated May 14, 2013 of the Government providing the management of employment, wages and bonuses for employees working in state-owned one-member limited liability companies

THE GOVERNMENT

Decree No. 50/2013/ND-CP of May 14, 2013, providing the management of employment, wages and bonuses for employees working in state-owned one-member limited liability companies

Pursuant to the December 25, 2001 Law on Organization of the Government;

Pursuant to the June 18, 2012 Labor Code;

Pursuant to the November 29, 2005 Law on Enterprises;

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

The Government promulgates the Decree providing the management of employment, wages and bonuses for employees working in state-owned one-member limited liability companies.

Article 1. Scope of regulation

This Decree provides the management of employment, wages and bonuses for employees working in state-owned one-member limited liability companies (below referred to as companies for short).

Article 2. Subjects of application

1. Employees working under labor contracts as prescribed by the Labor Code.

2. Members’ Councils or company presidents, controllers, general directors or directors.

3. State management agencies, agencies or organizations assigned or decentralized to exercise the rights and perform the obligations of the company owner (below referred to as owner for short).

Article 3. Employment management

1. Companies shall make recruitment and employment decisions on the basis of reviewing their employees, determining working positions and titles, ensuring the efficient recruitment and employment in association with the process of employment arrangement and company restructuring.

2. Based on their production and business plans and strategies and employment situation in the preceding year, companies shall determine their employment plans and report them to their owners and organize the recruitment according to their recruitment regulations and sign labor contracts as prescribed by law.

3. In the fourth quarter every year, companies shall assess the implementation of employment plans as a basis for the formulation of plans for the subsequent year. If the recruitment exceeds the planned target, thus leading to unemployment and termination of labor contracts, companies shall fully provide benefits to laid-off employees in accordance with the labor law and account such benefits in their business costs.

Article 4. Wage scales, wage tables and wage allowances

Companies shall formulate wage scales, wage tables and wage allowances under the Government’s Decree detailing a number of articles of the Labor Code regarding wages, and arrange wages for their employees from the wage scales and tables promulgated by the Government under Decree No. 205/2004/ND-CP of December 14, 2004, to the wage scales and tables issued by the companies.

Article 5. Determination of planned wage funds

1. Based on their production and business plans and projected achievement of wage-related norms as prescribed in Article 6 of this Decree, companies shall decide on their planned wage funds and wage advances not exceeding 80% of the implemented wage funds of the preceding year for payment to their employees.

2. Depending on practical conditions, companies shall determine wage unit prices corresponding to production and business plan targets or product and service units which are used to administer their production and business activities.

Article 6. Determination of implemented wage funds

1. The implemented wage fund for employees are determined on the basis of the actual average number of employees and the average wage paid amount.

2. The average paid wage amount for calculation of the wage fund is determined on the basis of the preceding year’s average paid wage amount, labor productivity and profits earned in the year as compared to the labor productivity and profits earned in the preceding year on the principles that:

a/ If the labor productivity and earned profits in the year increase, the payable wage amount will be increased over that of the preceding year, if the labor productivity rises 1%, the wage increase must not exceed 0.8% and the average wage increase rate (according to labor productivity and profits) must be lower than the labor productivity increase rate;

b/ If the labor productivity and earned profits in the year decrease, the payable wage amount will decrease compared to that of the preceding year;

c/ If neither profits nor losses are made, the payable wage amount will equal the average wage level under labor contracts (the prescribed wage level).

3. When determining the average payable wage amount under Clause 2 of this Article:

a/ Companies may exclude the objective elements affecting their profits and labor productivity, including: the State’s intervention to stabilize the market, corporate income tax preferences, accelerated depreciation for quick capital recovery; the company’s production of products and provision of services at prices set or managed by the State, implementation of social security programs under the Government’s regulations, production and business expansion, new investment; difference in actually paid prizes compared to the previous year’s payment, for lottery business companies;

b/ For companies manufacturing products and providing public services under orders placed by the State, or companies operating for non-profit purposes, the profit norms are replaced by product and service volume or task performance norms;

c/ Companies shall review the average paid wage amount in 2012, ensuring compliance with the principles defined in Clause 2 of this Article, and use it as a basis for determining the average wage amount payable in 2013.

4. Based on the implemented wage funds as prescribed in Clause 1 of this Article and the advanced wage funds for employees under Article 5 of this Decree, companies shall determine the remaining wage funds they can pay. If the advanced and paid amounts exceed the implemented wage funds, they shall refund the deficit amount from the wage funds of the following year.

Article 7. Wage distribution

1. Based on the implemented wage funds, companies may make deductions to set up reserve funds for addition to the wage funds of the following year and payment of wages to their employees according to their payment regulations. The reserve fund of a company must not exceed 17% of its implemented wage fund. For companies conducting seasonal production and business activities, the reserve funds must not exceed 20% of the implemented wage fund.

2. Companies shall formulate wage payment regulations according to working positions and titles, ensuring satisfactory payment (without limit) to persons with talents, high professional and technical qualifications and great contributions to their companies.

3. Companies may not use the employees’ wage funds for payment to members of the Members’ Councils or company presidents, controllers, general directors or directors, deputy general directors or deputy directors, and chief accountants.

Article 8. Bonuses

1. The employees’ bonus funds are deducted from the commendation and welfare funds of companies according to the Government’s regulations.

2. Employees’ bonuses are paid under the commendation regulations of the companies.

Article 9. Implementation responsibilities

1. General directors or directors shall:

a/ Draw up employment plans and submit them to the Members’ Councils or company presidents for approval, and report them to the owners for monitoring, inspection and supervision; organize the implementation of these plans and take responsibility before the Members’ Councils or the company presidents for recruitment and employment;

b/ Review and define professional and working positions and titles; formulate wage scales, wage tables, wage allowances, and working position-based wage systems and submit them to the Members’ Councils or company presidents for approval, and arrange the wages for their companies’ employees;

c/ Determine the planned wage funds and submit them to the Members’ Councils or company presidents for decision to advance or pay wages to employees;

d/ Determine the implemented wage funds, based on the level of fulfillment of production and business plans, and submit them to the Members’ Councils or company presidents for decision; decide on the deduction for the wage reserve after consulting the company’s trade union executive committee; and distribute wages to employees according to their companies’ wage payment regulations;

dd/ Set labor norms corresponding to production and business plan tasks; criteria of professional titles and tasks, professional standards; wage raising and wage rank upgrading regulations; wage payment regulations, bonus regulations in accordance with law, ensuring democracy, publicity, transparency and consultation of the grassroots trade union executive committees, and publicize them in their companies before implementation;

e/ Periodically report to the Members’ Councils or company presidents on the situation of employment, wage and bonus; provide adequate employment, wage and bonus reports, documents and data to the controllers upon request

2. The Members’ Councils or company presidents shall:

a/ Decide on production and business plans, employment plans, wage scales, wage tables, wage allowances, working position-based wage systems, planned wage funds and implemented wage funds according to production and business targets as prescribed by this Decree;

b/ Report to their owners and concurrently to controllers for inspection and supervision the schemes on determination of planned wage funds and implemented wage funds within 10 days after decision. Parent company-state economic groups, parent companies of special-grade corporations and corporations performing public-duty tasks, which play a key role in the economy, shall concurrently send these schemes to the Ministry of Labor, War Invalids and Social Affairs for monitoring;

c/ Strengthen their companies’ organizational apparatus and personnel performing labor- and wage-related tasks to implement the contents on labor, wage and bonus management under this Decree;

d/ Annually in the fourth quarter, report to their owners on the situation of their employees’ employment, wages and incomes in the preceding year.

3. Controllers shall:

a/ Examine, supervise and periodically report to the owners on the task performance by the Members’ Councils or company presidents, general directors or directors as prescribed by this Decree. If detecting any contents contrary to regulations, request the Members’ Councils or company presidents to direct the modification and adjustment thereof. If their request is not satisfied, report it to the owners for timely handling;

b/ Within 15 days after receiving reports of the Members’ Councils or company presidents, scrutinize and appraise the determination of the implemented wage funds for reporting to the owners and take responsibility for the accuracy and truthfulness of their appraisal.

4. The owners shall:

a/ Receive reports of the Members’ Councils or company presidents, controllers on the implemented wage funds and objective factors affecting the profits (if any), for scrutiny, examination and supervision;

Within 30 days after receiving reports on detection of contents contrary to regulations, request in writing the Members’ Councils or presidents of companies to direct the modification and adjustment; and at the same time, decide on disciplinary forms, such as postponement of wage increase or wage upgrading, wage downgrading, wage, bonus and remuneration reduction, on the chairpersons of the Members’ Councils or presidents of companies, depending on the severity of their mistakes and wrongdoings;

b/ Annually organize inspection and supervision and take responsibility before the Government and the Prime Minister for the implementation of employment and wage policies at the companies under their management;

c/ In the second quarter every year, send summarization reports to the Ministry of Labor, War Invalids and Social Affairs on their companies’ employment, wages and bonuses of the preceding year and their making of wage plans and their wage funds of the planning year.

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

a/ Assume the prime responsibility for, and coordinate with related ministries in, guiding the employment, wage and bonus management under this Decree;

b/ Guide companies in formulating wage scales, wage tables and wage allowances under the Government’s regulations; labor norms; and determining the average planned wage levels and labor productivity for determination of wage funds;

c/ Assume the prime responsibility for, and coordinate with the owners in, selecting and guiding a number of companies in determining on a pilot basis wage funds according to working positions and titles, suitable to the corresponding wages of working positions and titles in the labor market;

d/ Coordinate with the owners in supervising the wages of parent company-state economic groups, parent companies of special-grade corporations and corporations performing public-duty tasks which play a key role in the economy;

dd/ Inspect and examine companies in implementing employment, wage and bonus policies. If detecting the wage funds which have been determined in contravention of regulations, ask the owners to direct companies to adjust these funds or make refunds according to regulations;

e/ Periodically send summarization reports on the companies’ employment, wage and bonus situation to the Prime Minister.

Article 10. Effect

1. This Decree takes effect on July 1, 2013. The provisions of this Decree apply from May 1, 2013.

2. This Decree replaces the following:

a/ The Government’s Decree No. 86/2007/ND-CP of May 28, 2007, providing the management of employment and wages in one-member limited liability companies with 100% of charter capital owned by the State;

b/ The Government’s Decree No. 141/2007/ND-CP of September 5, 2007, prescribing the wage regimes applicable to state-owned parent companies and affiliated companies in economic groups;

c/ Clause 6, Article 20 of the Government’s Decree No. 25/2010/ND-CP of March 19, 2010, on conversion of state companies into one-member limited liability companies owned by the State and the management of State-owned one-member limited liability companies;

d/ Point b, Clause 5, Article 18 of the Government’s Decree No. 101/2009/ ND-CP of November 5, 2009, on the experimental establishment and organization, operation and management of state-run economic groups.

3. The Parent Company-Military Telecommunications Group may continue applying the provisions of the Government’s Decree No. 65/2011/ND-CP of July, 29, 2011, on the trial  wage management applicable to the Parent Company- Military Telecommunications Group in the 2011- 2013 period, for determining wages in 2013.

4. General directors or directors, deputy general directors or deputy directors and chief accountants working under labor contracts in state-owned one-member limited liability companies will be paid with wages and bonuses on the principle of agreement, which are separated from the wage and bonus funds of employees and accounted in the business costs of their companies.

5. Organizations and units currently applying the wage regimes like state companies or state-owned one-member limited liability companies under regulations issued by competent state agencies shall manage the employment, wages and bonuses for their employees under this Decree.

6. The Members’ Councils or presidents of parent companies of the companies defined in Article 1 of this Decree, shall, based on the contents of employment, wage and bonus management prescribed in this Decree, organize the management of employment, wages and bonuses for employees working in one-member limited liability companies under their ownership.

7. For organizations established and operating after the model of state-owned one-member limited liability companies in accordance with the Securities Law, pursuant to the provisions of this Decree, the Ministry of Labor, War Invalids and Social Affairs shall, after reaching agreement with the Ministry of Finance, guide the management of employment, wages and bonuses of employees suitable to the characteristics of these organizations’ operation.

8. Political organizations and socio-political organizations may consider and decide on the application of this Decree to employees working in one-member limited liability companies under their ownership.

9. Agencies or organizations representing the state capital at companies with dominant shares or contributed capital of the State shall direct the representatives, in pursuance to the provisions of this Decree, to participate in deciding on or proposing to the Management Boards or the Members’ Councils of these companies to decide on the management of employment, wages and bonuses in these companies suitable the practical conditions and ensuring the joint management of the State.

10. Ministers, heads of ministerial-level agencies, heads of government-attached agencies, chairpersons of provincial-level People’s Committees, the Members’ Councils or presidents of state-owned one-member limited liability companies shall implement this Decree.-

On behalf of the Government
Prime Minister
NGUYEN TAN DUNG