Circular No. 04/2020/TT-BLDTBXH provides guidance on implementing the provisions regarding piece-rate unit prices, actual wage funds for employees, and management boards as stipulated in Articles 7 and 8 of Decree No. 20/2020/NĐ-CP dated February 17, 2020, of the Government on piloting labor management, wages, and bonuses for certain state-owned corporations and companies.

CIRCULAR

Guidelines forimplementing the provisions on unit price of wage packages, actual wage fund of employees, and Management Board stipulated in Article 7 and Article 8of Decree No. 20/2020/NĐ-CP dated February 17, 2020 of the Government to implement pilot management of labor, wages, and bonusesfor certain state-owned economic groups and corporationsPilot management of labor, wages, and bonuses for certain state-owned economic groups and corporations

Pursuant to Decree No. 14/2017/NĐ-CP dated February 17, 2017, of the Government, stipulating the functions, tasks, powers, and organizational structure of the Ministry of Labor, Invalids, and Social Affairs;

Pursuant to Decree No. 20/2020/NĐ-CP dated February 17, 2020 of the Government to implement pilot management of labor, wages, and bonuses for certain state-owned economic groups and corporations;The Minister of Labor, Invalids and Social Affairs issues this Circular

Pursuant to the proposal of the Director of the Directorate of Labor Relations and Wages;

guiding the implementation of the provisions on unit price of wage packages, actual wage fund of employees, and Management Board stipulated in Article 7 and Article 8 of Decree No. 20/2020/NĐ-CP dated February 17, 2020 of the Government to implement pilot management of labor, wages, and bonuses for certain state-owned economic groups and corporations. This Circular guides the determination of the unit price of wage packages according to Article 7 and the determination of the actual wage fund according to Article 8 for employees and Management Boards of companies specified in Clause 1, Clause 2, and Clause 3 of Article 1 of Decree No. 20/2020/NĐ-CP dated February 17, 2020 of the Government to implement pilot management of labor, wages, and bonuses for certain state-owned economic groups and corporations (hereinafter referred to as Decree No. 20/2020/NĐ-CP). of of Decree No. 20/2020/NĐ-CP dated February 17, 2020 of the Government to implement pilot management of labor, wages, and bonusesThe scope of application of this Circular is as prescribed in Article 2 of Decree No. 20/2020/NĐ-CP.

Article 1. Scope of Regulation

Article 3. Unit Price of Wage Package

Article 2. Applicability

The unit price of wage package (hereinafter referred to as unit price) for employees and Management Board in 2020 as stipulated in Article 7 of Decree No. 20/2020/NĐ-CP shall be determined according to the following formula:

1. The maximum unit price applicable for 2020 and calculated based on the following indicators:

a) For the Parent Company - Vietnam Post and Telecommunications Group (hereinafter referred to as VNPT), the unit price is calculated as a percentage (%) of total revenue minus total costs excluding wages (corresponding unit of measurement is VND/100 VND of total revenue minus total costs excluding wages). Total revenue and total costs are calculated according to the regulations of the Government on state capital investment in enterprises and financial management for enterprises wholly owned by the State, and the guidance documents of the Ministry of Finance, excluding revenue and costs of affiliated public service units under VNPT.

Where:

b) For the Parent Company - Vietnam Airlines Corporation (hereinafter referred to as VNA), the unit price is calculated based on the indicator of ton-kilometer with revenue from air cargo transportation (corresponding unit of measurement is VND per ton-kilometer with revenue from air cargo transportation). The indicator of ton-kilometer with revenue from air cargo transportation is determined according to the common standards of the International Civil Aviation Organization (ICAO) applicable to air cargo carriers.

c) For the Parent Company - Vietnam Air Traffic Management Corporation (hereinafter referred to as VATM), the unit price is calculated based on the indicator of converted air traffic control kilometers (corresponding unit of measurement is VND per converted air traffic control kilometer). The indicator of converted air traffic control kilometers is calculated based on the total number of converted air traffic control kilometers per flight route of all flights; wherein the number of converted air traffic control kilometers per flight route is calculated by multiplying the actual air traffic control distance (unit: kilometer) by the conversion factor of the aircraft type and multiplied by the complexity factor of air traffic control on each flight route. The method for determining the number of converted air traffic control kilometers is established by VATM and submitted to the Ministry of Transport for approval.

2. TCTKL2018 and TCTKL2019: Indicator of wage package (for VNPT it is total revenue minus total costs excluding wages, excluding revenue and costs of affiliated public service units; for VNA it is total ton-kilometers with revenue from air cargo transportation; for VATM it is total converted air traffic control kilometers) actually achieved in 2018 and 2019.

3. QTL2018 and QTL2019: Actual total wage and bonus fund for safety (if any) implemented in 2018 and 2019 for employees working under labor contracts and Management Board in accordance with the law, including:

a) Actual total wage and bonus fund for safety implemented in 2018 and 2019 for employees, including the wage fund as prescribed in Circular No. 26/2016/TT-BLDTBXH dated September 1, 2016 of the Ministry of Labor, Invalids and Social Affairs guiding the implementation of labor, wage, and bonus management for employees working in limited liability companies wholly owned by the State with 100% state capital and Circular No. 28/2016/TT-BLDTBXH dated September 1, 2016 of the Ministry of Labor, Invalids and Social Affairs guiding the implementation of provisions on labor, wages, remuneration, and bonuses for companies with controlling shares or contributions from the State, and bonus fund for safety (if any).

b) Actual total wage and bonus fund for safety implemented in 2018 and 2019 for the Management Board, calculated as the sum of actual payments made to the General Director, Deputy General Directors, and Chief Accountant according to the company's salary payment regulations.

4. Supplementary wage fund added to the unit price of wage package for each company is determined as follows:

a) For VNPT, the supplementary wage fund is determined at most equal to the difference between the average wage in 2018 and 2019 paid by companies in the market and the average wage paid by VNPT for direct employees performing high-tech products in the same position, multiplied by the average number of direct employees performing high-tech products employed by VNPT in 2018 and 2019 who have lower wages than those paid by companies in the market.

High-tech products are determined according to the List of High-Tech Products issued by the Prime Minister or relevant ministries and agencies. The average wage of direct employees performing high-tech products paid by companies in the market is based on the Wage Report published by the market research company collected and reported by VNPT to the owner's representative body together with the unit price of wage package.

a) For VNPT, the supplementary wage fund shall be determined at a maximum equal to the difference between the average wages in 2018 and 2019 paid by companies on the market and those paid by VNPT for direct labor performing high-tech products in the same position, multiplied by the average number of VNPT employees directly performing high-tech products who have lower wages than those paid by companies on the market in 2018 and 2019.

High-tech products shall be identified based on the List of High-Tech Products issued by the Prime Minister or relevant ministries. The average wage of direct labor performing high-tech products paid by companies on the market shall be based on the Wage Report published by the market research company and collected by VNPT, which is reported together with the unit price to the representative body of the owner.

b) For VNA, the supplementary wage fund shall be determined at most by the difference between the average wages in 2018 and 2019 of foreign pilots and Vietnamese pilots performing the same position paid by VNA, multiplied by the average number of Vietnamese pilots employed by VNA in 2018 and 2019 who have lower wages than foreign pilots.

c) For VATM, the supplementary wage fund shall be determined at most by the difference between the average number of workers expected to be used in 2020 according to the requirements of the competent state agency for aviation security and safety purposes and the average number of workers used each year in 2018 and 2019, multiplied respectively by the actual average wage and safety bonus levels implemented in 2018 and 2019 of VATM.

d) The supplementary wage fund added to the unit price specified in points a and b of this Clause and point c of this Clause is the maximum amount for the company to supplement into the unit price, ensuring that the unit price after adding the supplementary wage fund does not result in a profit (before tax) plan for 2020 (after excluding objective factors as prescribed) being lower than the average profit achieved during the period from 2018 to 2019.

5. The wage fund according to the unit price in 2020 of the company shall be determined as follows:

Where:

a) QTL2020: Wage fund according to the unit price in 2020.

b) DGkhoan: Unit price as stipulated in Clause 1 of this Article.

c) TCTKL2020: Labor cost index implemented in 2020.

Article 4. Implementation of the wage fund for employees and the Management Board

1. The company shall determine and exclude objective factors (if any) directly affecting labor productivity and profit in 2020 compared to the labor productivity and profit achieved during the period from 2018 to 2019 before calculating the wage fund implementation in 2020 on the principle that the impact of objective factors on labor productivity and profit must be specifically quantified; deducting the part of objective factors increasing and adding the part of objective factors decreasing labor productivity and profit in 2020.

2. The wage fund implementation in 2020 of the company shall be determined by the wage fund according to the unit price as per formula (2) and adjusted according to the average labor productivity and pre-tax profit as follows:

a) In the case where the increase (in percentage terms) in the average wage in 2020 is lower than the increase (in percentage terms) in the average labor productivity and profit achieved in 2020 equal to the average achievement during the period from 2018 to 2019, the wage fund implementation in 2020 shall be equal to the wage fund according to the unit price; if the increase in the average wage in 2020 is equal to or higher than the increase in the average labor productivity, the wage fund implementation must be adjusted to ensure that the increase in the average wage is lower than the increase in the average labor productivity.

b) In the case where the profit achieved in 2020 is lower or higher than the average achievement during the period from 2018 to 2019, after adjusting the wage fund implementation according to point a of this Clause, the company shall adjust according to profit as follows:

- In the case where the company has a profit achievement higher than the average achievement of the period from 2018 to 2019, it may supplement the wage fund implementation according to the principle: for every 1% excess profit, up to 2% of the wage fund implementation can be supplemented, but not exceeding 20% of the excess profit and not more than two months' average wage of the total number of actual workers used on average annually.

- In the case where the company has a profit achievement lower than the average achievement of the period from 2018 to 2019, the company must reduce the wage fund implementation according to one of the following two methods: either reducing by the percentage rate equal to the percentage decrease between the profit achievement lower than the average profit achievement of the period from 2018 to 2019; or reducing by the absolute value equal to the difference between the profit achievement in 2020 lower than the average profit achievement of the period from 2018 to 2019. The reduction of both methods shall not exceed two months' average wage of the total number of actual workers used on average in 2020 and ensure that the wage fund implementation is not lower than the wage fund calculated based on the average wage level in the labor contract.

The average wage, average labor productivity, and average profit achievement shall be determined according to the Appendix attached hereto.

Article 5. Effective Date

1. This Circular takes effect from July 10, 2020.

2. The provisions on the unit price and the wage fund implementation for employees and the Management Board stipulated in this Circular shall be applied from January 1, 2020 to December 31, 2020.

3. Companies currently implementing the midday meal allowance not exceeding 730,000 VND per person per month shall continue to implement until new regulations are issued.

During the implementation process, if there are any difficulties, agencies and units are advised to report to the Ministry of Labor - Invalids and Social Affairs for timely guidance and supplementation./.