Circular No. 1/LDTBXH-TT guiding the implementation of Decision No. 217-HDBT dated November 14, 1987 of the Council of Ministers on labor - wages and social affairs.

 CIRCULAR

NUMBER 1-LDTBXH/TT OF JANUARY 9, 1988 GUIDING THE IMPLEMENTATION OF DECISION NO. 217-HDBT OF NOVEMBER 14, 1987 OF THE STATE COUNCIL ON LABOR - WAGES AND SOCIAL ISSUES

Pursuant to Part VIII on labor - wages and social issues of the regulations on new policies for planning and business accounting under socialism for state-owned enterprises as stipulated in Decision No. 217-HDBT dated November 14, 1987 of the State Council, the Ministry of Labor - War Invalids and Social Affairs guides the implementation as follows:

I. LABOR CONTRACT REGIME

(Article 47)

From now on, state-owned enterprises shall gradually implement the transition from the recruitment regime into state staff to the labour contract regime.

- For newly recruited workers from now onwards (including university, college, vocational high school graduates, trade school students, and management staff), the labor contract regime shall be implemented.

- For workers currently working at enterprises under the old labor contract regime or temporary recruitment, if the enterprise still has a need to employ them, they shall sign a new labor contract and implement the labor contract regime.

- For workers currently working at enterprises under the old labor contract regime or temporary recruitment, if the enterprise still has a need to employ them, they shall sign a new labor contract and implement the labor contract regime as stipulated in this circular.

- For current employees within the establishment, the enterprise shall, based on specific conditions, implement the transfer of individuals, units, or the entire workforce (excluding directors, deputy directors, and chief accountants) to the labor contract regime.

In cases 2 and 3 mentioned above, the time worked prior to that shall be accumulated.

1. Content of the labor contract.

The labor contract is a written agreement between the Enterprise Director and the worker regarding obligations and benefits, responsibilities and rights of both parties during the labor process, signed by the Director and the worker. In the contract, the worker commits to completing the work agreed upon in the labor contract in terms of quantity and quality, adhering to labor discipline, enterprise rules, safety procedures, and other regulations of the enterprise; the Enterprise Director commits to ensuring necessary conditions for the worker to complete the work agreed upon in the contract, ensuring workplace safety, hygiene, labor protection, and other state policies for workers.

2. Forms of labor contracts.

Depending on the nature of production and business, the Enterprise Director and the worker may agree to sign labor contracts in the following forms:

- Indefinite-term labor contracts apply to stable long-term jobs requiring specialized technical skills, expertise, and experience accumulated through labor. This form mainly applies to those who have completed training courses or traditional trades (without formal education) with high technical skills and expertise that the enterprise needs.

- Fixed-term labour contract, applicable to jobs with a defined completion time ranging from one to five years.

For the two forms of labor contracts mentioned above, the Enterprise Director and the worker shall review the implementation of the contract annually to agree on its continuation or termination.

- Job-specific or project-based labour contract under one year.

3. Standards for workers eligible to sign labor contracts.

- Having citizen rights and voluntarily willing to work.

- Having qualifications suitable for the enterprise's job requirements.

- Being in good health and at least 18 years old.

It is prohibited to employ workers under 18 years old for heavy, hazardous jobs affecting physical and mental development; for other jobs, enterprises may employ workers under 18 years old, but must obtain the consent of the People's Committee of the district or equivalent where the enterprise is located.

4. Procedures for signing labor contracts.

- Before signing the labor contract, the Enterprise Director is responsible for:

Introducing the worker to understand the content and requirements of the job to be performed; situations where temporary reassignment to other jobs or locations may occur; the duration of the contract; working conditions; safety procedures; labor discipline and enterprise rules; wage levels and payment methods, bonuses; other policies and benefits that the worker will enjoy.

Conducting health checks, assessing occupational qualifications, and organizing trial periods. The trial period shall not exceed 30 days. The wage during the trial period shall be agreed upon by the director and the worker.

- Workers are responsible for submitting to the enterprise an application for employment; a resume certified by the People's Committee of the commune, ward, town where they reside; a health certificate, academic or professional qualification certificates. For those already having a labor record book, they only need to submit an employment application and a health certificate to the enterprise.

- The labor contract shall be signed according to the prescribed model, bearing signatures of both parties, and made into two copies, one retained by the Enterprise Director and one by the worker.

5. Policies and benefits for workers employed under the labor contract regime.

a) Workers employed under indefinite-term or fixed-term labor contracts of one year or more shall enjoy wage, bonus, allowance, subsidy, labor protection, social insurance, collective welfare policies; purchase of foodstuffs; awards, promotion, salary increase, annual leave, personal leave, study opportunities, etc., according to the regime for state employees. They shall be issued a labor record book serving as the basis for implementing policies and benefits for workers. When retiring or losing their ability to work, the time worked in previous state agencies or enterprises shall be accumulated to calculate social insurance benefits (except in cases specified in Point 4, Section III of this Circular).

b) Workers employed under job-specific or project-based labour contracts under one year shall enjoy:

- Wage agreed upon by both parties, but the wage level shall not be lower than the minimum wage set by the state.

The wage level includes grade pay, allowances; price difference according to region (if applicable) like state employees; social insurance and other additional fees. Grade pay and allowances are based on the national wage scale and allowance system, with the price difference determined based on the guaranteed trading price of each locality minus the part included in the wage. Social insurance and additional fees are calculated at 25% to 30% of the grade pay. If implementing payment based on production, this wage amount shall be allocated to the production quota or time quota to determine the wage rate. The wage shall be accounted for in the product cost.

- In addition to wages, workers also enjoy bonuses, night shift allowances, meal allowances during shifts, overtime allowances, and material compensations (if any). The enterprise has the responsibility to provide work tools and personal protective equipment for workers. When terminating the contract, workers must return to the enterprise all equipment that has been provided. If workers damage such equipment, the enterprise will settle the depreciation based on mutual agreement.

II. RECRUITMENT OF LABOUR

(Article 45, 46)

1. During each planning period, the enterprise bases its recruitment needs on production and business tasks and labor norms and staffing standards to determine the demand for labor. On this basis, the enterprise determines additional labor needs and develops plans to recruit additional labor through three forms of employment contracts. Recruitment plans are submitted simultaneously with the complete plan scheme as stipulated in Article 4 of the attached Decision No. 217-HĐBT dated November 14, 1987 of the Council of Ministers to the People's Committee of the province, city, or special administrative region directly under the Central Government (through the Department of Labor, Invalids, and Social Affairs) where the enterprise is located for guidance on recruitment sources and to establish a balance of essential needs for workers. One month after receiving the report on the plan, if the Committee does not respond, the enterprise may implement the recruitment according to the reported plan. The results of recruitment must be reported to the People's Committee of the province, city, or special administrative region directly under the Central Government (through the Department of Labor, Invalids, and Social Affairs) to resolve the rights of workers such as registering household registration, food rations...

During the planning period, if urgent tasks require additional labor, the enterprise may recruit additional labor through temporary or specific task-based employment contracts.

2. Following the guidance of the labor management agency regarding the recruitment area, the enterprise may directly recruit or enter into contracts with labor recruitment agencies according to the enterprise's requirements. The enterprise has the right to refuse to accept individuals introduced by various levels including the labor management agency if they do not meet the criteria or if the enterprise does not have a need for them. Before recruiting additional labor, the enterprise must publicly post the number and criteria so that the workers in the enterprise are aware. When signing employment contracts without fixed term or with a term of one year or more, the enterprise must seek the opinion of the Enterprise Council.

Regarding the recruitment area, for general labor, local residents should be primarily recruited; in cases requiring technical labor, skilled labor, highly specialized personnel, or occupations that the local area cannot meet, the enterprise may recruit from other places. Enterprises located in northern mountainous provinces, Central Highlands, and new economic zones may recruit spouses or children from other provinces, including those engaged in agriculture.

Regarding the target group, based on the criteria, enterprises select in the following order:

- Employees currently working under a labor contract at the enterprise.

- Personnel transferred from other places.

- Graduates from regular training schools, graduates from training classes organized by the enterprise, and foreign cooperative workers who have completed their tasks.

- Children of workers in the enterprise.

- Other general laborers.

Among the above groups, priority should be given to recruiting disabled veterans who are still capable of working, spouses and children of martyrs or severely injured veterans, families with meritorious service to the revolution, soldiers and volunteers who have completed their missions and returned.

For labor in cities and towns, particular attention should be paid to those who are unemployed and have registered for job placement.

3. The enterprise must regularly change its operating areas such as construction, transportation, geology... When relocating part of the workforce to work outside the enterprise's location, the enterprise must report in advance to the People's Committee of the province, city, or special administrative region directly under the Central Government (through the Department of Labor, Invalids, and Social Affairs) about the number of people and duration of work so that the Committee can balance the essential needs for workers. During relocation, the enterprise can bring technical workers along; for general labor, recruitment should be done locally, and only if local recruitment cannot meet the needs, the enterprise may bring general labor from elsewhere.

The local area where the enterprise operates has the responsibility to resolve all benefits for the enterprise's workers such as temporary residence registration, sale of foodstuffs, consumer goods for these workers and their family members (if any) after completing the necessary procedures for relocation from another place.

III. TERMINATION OF EMPLOYMENT AND CONTRACTS

(Article 48, 49)

1. The General Director of the enterprise has the authority to terminate employment or terminate employment contracts for workers employed under employment contracts when they violate any of the following circumstances but have not reached the level of disciplinary action leading to termination of employment or are currently being investigated for criminal responsibility:

- Failure to complete assigned tasks due to personal reasons, despite warnings and continued recurrence.

- Stealing socialist property after education but failing to correct behavior.

- Workers voluntarily leaving work at the enterprise for three days within a month (cumulative), ten days within a year (cumulative) without valid reasons.

- Not adhering to the enterprise's internal regulations causing damage to production and the lives of workers. Refusal to comply with reasonable orders issued by the General Director if recognized by the collective.

- Seriously violating other terms of the signed employment contract.

In cases where production needs to be reduced, the enterprise must find every possible solution to maintain employment for workers; if unable to resolve, the enterprise may terminate employment or terminate employment contracts, and workers will enjoy the benefits stipulated in Point 4 below.

The General Director shall not terminate employment or terminate employment contracts during periods when workers are hospitalized or undergoing convalescence; pregnant women and those on maternity leave.

2. Workers in the establishment have the right to request termination of employment, and workers employed under employment contracts have the right to request early termination of employment contracts in the following situations:

- Need to change workplace when current work does not match their capabilities and health.

- When admitted to technical or vocational schools not arranged by the enterprise.

- When facing truly difficult family circumstances.

- When the enterprise seriously violates the terms agreed upon in the employment contract.

3. When the Director terminates employment or the employee requests termination of the labor contract, the party must notify the other party in writing at least thirty days in advance for indefinite-term and fixed-term contracts; at least seven days in advance for contracts based on specific tasks or projects lasting less than one year, starting from the date of receipt of the written notice.

Before the Director decides to terminate the employment of an employee, the opinion of the factory trade union executive board must be sought. In cases where the trade union executive board has not reached consensus, the Director has the right to make a decision and bear responsibility for that decision.

4. Upon making a decision to terminate employment or terminate the labor contract, the employee shall be entitled to a one-time allowance as follows:

- For each year of service, the employee shall receive one month's salary including allowances and price subsidies (if applicable), and shall be entitled to purchase 13 kilograms of food per month for six months at the guaranteed trading price, and shall also receive the difference between the price included in the salary and the actual price (to be paid by the enterprise), if the employee terminates the contract due to production reduction or enterprise dissolution, or in other cases specified in Point 2, Section III above.

- For each year of service, the employee shall receive half a month's salary including allowances and price subsidies (if applicable), and shall be entitled to purchase 13 kilograms of food per month for six months at the guaranteed trading price, and shall also receive the difference between the price included in the salary and the actual price (to be paid by the enterprise), if the employee terminates the contract in cases specified in Point 1, Section III above.

- The employee shall be provided with travel expenses for themselves and their family (if traveling together) to return to their place of residence according to the current regulations.

- Dependents who continue to purchase food for six months according to the standard and receive price subsidies (if applicable) for one dependent, while other dependents shall be assisted according to the current hardship allowance regulations.

Those who have received the one-time allowance mentioned above, if they return to work in state agencies or enterprises, will not be able to accumulate previous working time for social insurance purposes.

In cases where the labor contract is terminated here to continue working elsewhere, the previous working time will be accumulated, and they will not receive the aforementioned termination allowance.

5. Employees have the right to lodge complaints when their rights are violated according to the Law on Complaints and Appeals issued by the State Council on November 27, 1981, and Decree No. 58-HĐBT dated March 29, 1982, of the Council of Ministers guiding the implementation of the Law. Dispute resolution in cases of forced termination of employment shall still be carried out according to Decision No. 10-HĐBT dated January 14, 1985, of the Council of Ministers and Circular No. 2-TT/LN dated October 2, 1985, of the joint agencies of the People's Court - People's Procuracy - Ministry of Justice - Ministry of Labor - General Department of Vocational Training.

6. Employees working in enterprises, when called up for military service, shall have their labor contracts temporarily suspended; upon completion of their service and return, they shall resume their work at the enterprise.

IV. WAGES AND INCOME

(Article 50)

1. The Director of the enterprise has the authority to use the following funds to pay wages and bonuses to employees in the enterprise:

a) The wage fund is determined in accordance with the volume of products produced during the planned period and the unit cost (wage expense rate) in the product. The unit cost of wages in the product is determined based on the wage scale, salary table, and allowances prescribed by the State, and reasonable and strict labor norms. The unit cost of wages shall be adjusted when there are changes in labor norms or factors included in the unit cost of wages, and fluctuations in prices over different periods. The method of determining labor norms and unit costs of wages shall, for the time being, be implemented according to the guidelines set forth in Circular No. 3-TT/LB dated February 22, 1986, of the Joint Ministries of Labor - State Planning Commission.

b\) The bonus fund includes:

- Bonuses shall be extracted from the profits earned by the enterprise (production profits, auxiliary profits, savings on material consumption, application of scientific and technological progress, improvement of product quality...).

- Bonuses for encouraging export production.

- Bonuses for products awarded quality marks by authorized agencies.

- Bonuses from higher-level agencies.

- Bonuses from partner units for successfully implementing economic contracts.

- Other existing bonus systems if applicable.

c\) Remaining wage and bonus funds from the previous period.

2. Based on the wage fund determined as above, the Director of the enterprise has the authority to independently choose appropriate forms of payment (time-based wages, piece-rate wages, contract wages) and wage systems suitable for each group or individual employee in the enterprise; to classify and promote the wage grades of employees in accordance with technical standards for workers and professional standards for staff as required by production and according to the management level of superiors; to determine the wage level according to the current system for employees when temporarily transferred to other jobs; to reasonably adjust the incentive ratio for piece-rate wages for main and auxiliary workshops and important products to avoid averaging and achieve high economic efficiency. For enterprise managers and administrative staff, their wages and bonuses shall be linked to the production and business performance of the enterprise.

3. With the total bonus fund obtained from the sources mentioned above, the Director of the enterprise has the authority to independently choose the form of distribution of bonuses and stipulate appropriate criteria, conditions, and bonus levels for groups and individuals to promote production and avoid averaging.

4. The Director of the enterprise has the authority to extract a portion from the funds specified in Point 1, Section IV of this Circular to encourage employees who take on additional work, more difficult tasks, or have made significant contributions to the enterprise, such as:

- Allowance for兼任多种职业或工作的补贴。

- Paying higher salaries to skilled workers and staff members with special talents of the enterprise, those working in other units who have signed contracts with the enterprise as experts, consultants, collaborators, and performing other tasks that have truly contributed significantly to the enterprise's success.

- Paying salaries for additional days off granted by the enterprise Director beyond the annual leave entitlement for outstanding and excellent workers, model workers, and labor heroes.

- Awarding bonuses to those who find new sources of materials, raw materials, or new markets for products that bring about efficiency for the enterprise.

- Awarding bonuses to partner units that fulfill economic contracts with the enterprise well.

- Awarding bonuses to units and individuals who excel in occupational safety and health work.

5. The Director of the enterprise is responsible for accurately accounting for all financial resources generated as mentioned above; is responsible for establishing rules regarding wage and bonus payments. These rules must be publicly announced within the enterprise.

6. The income level of each person in the enterprise depends on their productivity, quality, and work efficiency, as well as that of the entire unit, without setting a maximum income level. The income includes wages, bonuses, and allowances as prescribed in Points 2, 3, and 4, Section IV of this Circular.

V. WORKING CONDITIONS AND LABOR PROTECTION

(Article 51)

1. Plans for labor safety, hygiene, and improvement of working conditions are integral parts of the production, technical, financial, and social plans of the enterprise. The enterprise has the responsibility to develop and organize the implementation of such plans effectively.

2. The enterprise is obligated to comply strictly with laws, regulations, standards for labor protection, safety, hygiene, working conditions, and technical safety norms; it must ensure the good operational status of production machinery, equipment, safety devices, and hygiene facilities. When modernizing technological processes, machinery, equipment, constructing new or expanding workshops..., it must meet safety and hygiene requirements.

3. The General Director of the enterprise is responsible for organizing training and education for management staff, technical staff, and workers to understand and comply with labor protection regulations, safe and hygienic working methods, and their duties and authorities regarding labor protection; they must regularly organize inspections to enforce these regulations throughout the enterprise.

4. The enterprise shall not assign workers to work under conditions posing a risk of fatal accidents or acute poisoning; workers have the right to refuse such work when requested by the enterprise without being considered a violation of labor discipline. In cases where safety is not ensured leading to workplace accidents, the General Director of the enterprise shall be held responsible.

5. The enterprise must properly implement the system of providing personal protective equipment and material benefits for workers engaged in hazardous and toxic jobs.

The enterprise has the right to purchase personal protective equipment independently to ensure quality, specifications, and usage duration requirements.

6. The implementation of labor protection regulations and safe and hygienic working methods must be concretized into specific indicators in the regular competition content for every individual from leadership cadres to workers, with strict rewards and penalties.

7. The General Director of the enterprise is responsible for reporting and ensuring the accuracy of reports on labor safety, hygiene, and workplace accidents, occupational diseases to higher-level management agencies and local Labor, Invalids, and Social Affairs offices.

VI. SOCIAL INSURANCE

(Article 52)

The enterprise has the responsibility to fully and timely contribute to the social insurance fund and implement the State's social insurance system, and has the right to use collective welfare funds for improving the spiritual and material living standards of workers.

VII. IMPLEMENTATION ORGANIZATION

1. The Ministry of Labor, Invalids, and Social Affairs requests relevant sectors and localities to guide subordinate units in implementing this Circular; if there are different provisions, they must obtain the agreement of the Ministry of Labor, Invalids, and Social Affairs.

2. The Director of the Department of Labor, Invalids, and Social Affairs is responsible for assisting provincial, municipal, and central special zone People's Committees and the Director of the Department of Labor Wages in assisting the Minister and the head of the competent bureau in guiding, urging, inspecting, and periodically reporting on the implementation of this Circular to the Ministry of Labor, Invalids, and Social Affairs.

3. This Circular is to be disseminated to all workers in the enterprise and takes effect from the date of issuance. Previous regulations contrary to this Circular are hereby abolished.