Circular No. 06/2005/TT-BLDTBXH guiding the method for establishing labor norms in state-owned companies pursuant to Government Decree No. 206/2004/NĐ-CP dated December 14, 2004.

CIRCULAR

Guidelines on the method for establishing labor norms in state-owned enterprises

  pursuant to Decree No. 206/2004/NĐ-CP

dated December 14, 2004 of the Government

_____________________

Implementing Decree No. 206/2004/NĐ-CP dated December 14, 2004 of the Government on Labor Management, Wages, and Income in State-Owned Enterprises, the Ministry of Labor, Invalids and Social Affairs guides the method for establishing labor norms as follows:

I. SCOPE AND APPLICABLE SUBJECTS

The scope and subjects to which the provisions of this Circular apply are state-owned enterprises operating under the Law on State-Owned Enterprises, including:

1. State-owned enterprises:

a) State-owned corporations:

- State-owned corporations established under the Law on State-Owned Enterprises 1995 and State-owned corporations decided to be invested in and established by the State under the Law on State-Owned Enterprises 2003;

- Corporations formed by companies investing and establishing themselves (corporations under the parent company - subsidiary model);

- Corporations engaged in investment and business with state capital.

b) Independent state-owned companies.

2. Independent accounting member companies of State-owned corporations decided to be invested in and established by the State.

The above-mentioned state-owned corporations shall be referred to as enterprises.

II. PRINCIPLES

1. All products and services must have labor norms. When there are changes in production and business technology, the labor norms must be adjusted accordingly.

2. The comprehensive labor norm for a unit product (including converted products) or according to staffing levels must be formed from the basic work norms (technical basic work norms, auxiliary basic work norms, service basic work norms), staffing levels of each department, and management labor.

For the comprehensive labor norm for a unit product, during the process of calculating and establishing the norm, it must be based on technical parameters specified for the product, the production process technology, equipment working conditions, combined with advanced experiences that can be widely applied, and requirements for organizing production, labor organization, and management.

3. When establishing comprehensive labor norms, the loss of labor for by-products, major repairs of machinery, equipment, factories, construction projects, manufacturing, and installation of equipment shall not be included. These labor losses for such types of work will be established as separate comprehensive labor norms.

4. When establishing comprehensive labor norms, the company must simultaneously determine the complexity level of labor and the average job grade according to the weighted average method.

III. METHODS

Based on technology, production and business processes, labor organization, and products produced and traded, the company selects one of the two methods for establishing comprehensive labor norms as follows:

1. Method for establishing comprehensive labor norms for a unit product (or converted product):

The comprehensive labor level is calculated using the following formula:

d.1. Amount of taxable income in Vietnam:_sp= T_cn + T_pv + T_ql

Where:

d.1. Amount of taxable income in Vietnam:_sp: Comprehensive labor level for a unit product (unit of measurement is hours - person/unit product);

- T_cn: Technical labor level;

- T_pv: Auxiliary and service labor level

- T_ql: Management labor level

- T_cn,d.1. Amount of taxable income in Vietnam:_pv , and T_qlare determined as follows:

a. Technical labor level (T_cn): calculated as the total time spent on performing technical basic works to produce the product under defined organizational and technical conditions.

b. Auxiliary and service labor level (T_pv): calculated as the total time spent on performing auxiliary and service basic works to produce the product under defined organizational and technical conditions. T_pvis calculated from the auxiliary and service time per basic work or as a percentage of T_cn.

c. Management labor level (T_ql): calculated as the total time spent on management labor for producing the product. T_qlis calculated from the management labor time quota or as a percentage of the technical labor level plus the auxiliary and service labor level (T_cn + T_pv).

Specific calculation methods for parameters T_cn, T_pv, T_qland conversion of products are guided at Point 4, Point 5, Section 1 of the Appendix attached to this Circular.

2. Method for establishing comprehensive labor norms according to staffing levels:

The comprehensive labor level is calculated using the following formula:

L_db = L_{c Qu} + L_pv + L_bs+ L_ql

Where:

-_db: Staffing level of the company (unit of measurement is person).

-_ch: Main staffing level;

-_pv: Auxiliary and service staffing level;

-_bs:Supplementary staffing level to implement rest days and hours according to labor laws for main and auxiliary/service staff;

-_ql:Management staffing level.

L_{c Qu}, L_pv, L_bs, L_ql are determined as follows:

a. Main staffing level (L_{c Qu}): calculated based on the reasonable number of main staff quotas of each team, squad, workshop, branch, store, or equivalent organization within the company's member units. The main staff quota of each unit is determined based on production and business tasks, workload balanced with production organization and labor organization conditions.

b. Auxiliary and service staffing level (L_pv): calculated based on the number of auxiliary and service staff quotas of each team, squad, workshop, branch, store, or equivalent organization within the company's member units. Based on the workload of auxiliary and service tasks, production and business technology, and labor organization of each unit within the company, L_pv is calculated by quota or as a percentage (%) of L_ch.

c. Supplementary staffing level (L_bs): calculated when determining the main staffing level and auxiliary/service staffing level without considering the supplementary staff needed to implement rest days and hours according to labor laws for main and auxiliary/service staff. L_bs is calculated as follows:

- For companies not operating on holidays, festivals, and weekly rest days, the supplementary staffing level is calculated as follows:

Number of rest days according to labor laws, including:

+ Annual leave days with pay averaged annually for one main and auxiliary/service staff member;

+ Personal leave days with pay averaged annually for one main and auxiliary/service staff member based on the previous year's statistics;

+ Reduced daily working hours for people engaged in particularly arduous, toxic, and dangerous work (converted to days) averaged annually for one main and auxiliary/service staff member;

The maternity leave period shall be averaged annually for each main and auxiliary worker within the established quota.

- For companies with occupations or jobs that require continuous work throughout the year, the additional workers within the quota shall be calculated as follows:

d) Quota management staff (L_ql): shall be calculated based on the total number of management staff within the quota of the company. The category of management staff of the company is determined according to Section c, Point 1, Section I of the Appendix issued together with this Circular.

IV. IMPLEMENTATION

1. Responsibilities of the company:

a) Based on the guidance provided in this Circular, the company has the responsibility to organize the establishment or modification and supplementation of the existing labor level system (detailed levels and aggregate levels) to ensure suitability. For newly established or modified detailed labor levels, the company must trial them for a maximum of three months before officially implementing them.

b) Annually, the company must evaluate the implementation of the labor level system to improve its quality. If the actual implemented labor level is lower than 5% or higher than 15% compared to the assigned level, the company must review and adjust it appropriately within three months.

c) When establishing, modifying, supplementing, and trialing the labor level system, the company must seek opinions from the Company Trade Union Executive Committee and publicly announce it within the company.

2. Responsibilities of the Ministry managing the industry, People's Committees of provinces and centrally governed cities:

a) Guide companies under their management to establish and perfect the labor level system to suit the production organization and labor organization of the company;

b) Inspect the establishment and implementation of labor levels in companies in accordance with labor laws.

3. Responsibilities of the Ministry of Labor, Invalids, and Social Affairs:

a) Study and supplement the labor level setting methods to suit practical conditions and the modernization process of production and business technology;

b) Guide, inspect, and audit the establishment and implementation of labor levels in state-owned enterprises in accordance with labor laws.

V. IMPLEMENTATION PROVISIONS

1. This Circular takes effect fifteen days after its publication in the Official Gazette and replaces Circular No. 14/LDTBXH-TT dated April 10, 1997, issued by the Ministry of Labor, Invalids, and Social Affairs, guiding the method of establishing labor norms for state-owned enterprises.

The provisions of this Circular shall be implemented from January 1, 2005.

2. The Vietnam Development Fund and the Vietnam Deposit Insurance Corporation, which currently apply salary systems similar to those of state-owned enterprises as stipulated in Decision No. 17/2000/QD-TTg dated February 3, 2000, and Decision No. 88/2001/QD-TTg dated June 5, 2001, of the Government, shall apply the provisions of this Circular.

3. State-owned enterprises operating under the Law on Enterprises and other economic sectors' enterprises may apply the provisions of this Circular.

During the implementation process, if there are any difficulties, the relevant ministries, sectors, provincial people's committees, centrally governed city people's committees, and state-owned enterprises are requested to report to the Ministry of Labor, Invalids, and Social Affairs for consideration and resolution./.