JOINT CIRCULAR No. 15/1996/TTLT/BTC-BLDTBXH of the Ministry of Labor - Invalids and Social Affairs and the Ministry of Finance on guiding the special ranking for state-owned enterprises and salary grading for management officials of state-owned enterprises ranked specially.

JOINT CIRCULAR

Joint Circular No. 15/1996/TTLT/BTC-BLDTBXH dated June 25, 1996 issued by the Ministry of Labor, War Invalids and Social Affairs and the Ministry of Finance on guiding special ranking for state-owned enterprises and salary grading for management officials of state-owned enterprises ranked specially by the State.

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Implementing Decree No. 26/CP dated May 23, 1993 of the Government on the temporary regulations on new wage system in enterprises and Decision No. 185/TTg dated March 28, 1996 of the Prime Minister on state-owned enterprises with special ranking, after exchanging opinions with relevant ministries and sectors, the Joint Ministry of Labor, War Invalids and Social Affairs and Finance guides the special ranking for state-owned enterprises and salary grading for management officials of state-owned enterprises ranked specially by the State as follows:

I. SPECIAL RANKING FOR STATE-OWNED ENTERPRISES:

1. Conditions:

State-owned enterprises eligible for special ranking must meet one of the following three conditions:

a. State-owned corporations established pursuant to Decision No. 91/TTg dated March 7, 1994 of the Prime Minister on piloting the establishment of business groups;

b. State-owned corporations established pursuant to Decision No. 90/TTg dated March 7, 1994 of the Prime Minister on continuing to reorganize state-owned enterprises, having a statutory capital of 500 billion Vietnamese dong or more;

c. Independent state-owned enterprises must satisfy all three of the following conditions:

- Playing a significant role in the national economy;

- Having a statutory capital of 500 billion Vietnamese dong or more;

- The position of General Director being appointed by the Prime Minister.

2. Procedure for submitting special ranking applications:

Based on the conditions set out in Point 1, Section I, relevant ministries, sectors, provincial/municipal People's Committees under the central government shall conduct reviews and prepare files to be submitted to the Joint Ministry of Labor, War Invalids and Social Affairs and Finance for examination, which will then be reported to the Prime Minister for decision.

The procedures and file requirements are specified as follows:

a. For state-owned corporations established pursuant to Decision No. 91/TTg dated March 7, 1994 of the Prime Minister: when there is a Decision of the Government, it is not necessary to prepare a file but only to submit the establishment Decision to the Joint Ministry for reporting to the Prime Minister to rank specially.

b. For state-owned corporations established pursuant to Decision No. 90/TTg dated March 7, 1994 of the Prime Minister and independent state-owned enterprises:

- A letter of request from the ministry, sector, or provincial/municipal People's Committee under the central government sent to the Joint Ministry;

- The decree or decision establishing the enterprise, and the decree or decision approving the charter and operation of the enterprise;

- The business capital of the enterprise (including fixed and circulating capital) has been reassessed according to Decision No. 1104 TC/TCDN dated October 17, 1995 of the Ministry of Finance on inspecting and reassessing capital and assets of state-owned enterprises and has been reviewed and confirmed in writing by the system of the State Capital and Asset Management Agency at enterprises.

Specifically for independent state-owned enterprises, the file needs to include an additional explanatory note on the significant role of the enterprise in the national economy, reflected in the following aspects:

+ The role of the enterprise in developing the national economy and society, stabilizing social life, ensuring national defense and security;

+ The scope and scale of operations of the enterprise (operating area; domestic and international scope);

+ Business efficiency: revenue, profit, tax payment...;

+ Employment, job creation, and income of workers;

+ The Prime Minister's decision appointing the General Director.

The financial indicators mentioned above are calculated up to the time of filing the application and must be confirmed by the agency managing capital and assets of state-owned enterprises.

II. TRANSFER OF SALARY AND POSITION ALLOWANCE FOR MANAGEMENT OFFICIALS OF STATE-OWNED ENTERPRISES THAT HAVE BEEN RANKED SPECIALLY:

1. General Principles:

- Management officials holding positions of General Director, Deputy General Director, Chief Accountant shall be assigned a corresponding position salary according to the management position salary table prescribed in Decree No. 26/CP dated May 23, 1993 of the Government.

- Officials holding positions of Department Head, Deputy Department Head or equivalent shall be assigned a specialized profession salary and position allowance according to the leadership position allowance table of specially ranked enterprises prescribed in Decree No. 26/CP dated May 23, 1993 of the Government.

- When ceasing to hold a position, they shall not enjoy the salary or position allowance of specially ranked enterprises and shall receive the salary and position allowance corresponding to their work and position; the level of salary or position allowance according to specially ranked enterprises shall not be retained as a basis for transferring to another equivalent salary level.

2. Transfer of Salary for General Directors, Deputy General Directors, and Chief Accountants:

When an enterprise has a decision of the Prime Minister to rank specially, officials appointed to hold positions of General Director, Deputy General Director, and Chief Accountant shall be assigned a corresponding position salary according to the management position salary table as prescribed:

a. If the current salary coefficient or the sum of the specialized profession salary coefficient and position allowance and retention difference coefficient (if any) is lower than the coefficient of the first grade, then the salary shall be transferred to the first grade coefficient and the time for considering the next salary increase shall be counted from the date of the decision to assign the specially ranked enterprise salary. In case the total salary coefficient (including the salary coefficient plus position allowance and retention difference coefficient (if any) currently enjoyed is lower than the first grade coefficient, but the difference is not equal to 70% of the difference between the first grade coefficient and the second grade coefficient, then the time for considering the next salary increase shall be counted from the date of the previous salary assignment.

Example 1: Comrade A is appointed to hold the position of Deputy General Director, currently assigned a salary coefficient of 5.15 (Grade 3/4 Senior Specialist in Enterprise) and a position allowance of 0.5; the total current salary coefficient is 5.65 (5.15 + 0.5), then the salary shall be transferred to Grade 1 corresponding to the position of Deputy General Director, which is 6.03. The time for considering the next salary increase shall be counted from the date of the decision to assign the Grade 1 salary, with a salary coefficient of 6.03.

Example 2: Comrade B, formerly the Director of a Class 1 enterprise with a grade 2/2 salary level and a salary coefficient of 6.03 and a retention differential coefficient of 0.46 from June 1994. When appointed as the Director of a State-owned enterprise of special class, he was transferred to a grade 1 salary level prescribed for the Director position, with a salary coefficient of 6.72. The time for considering the next salary increase will be calculated from June 1994, because [(6.72 - 6.49) / (7.06 - 6.72)] x 100% = 68% < 70%

b. If the position salary coefficient or the professional and vocational salary coefficient plus the position allowance and the retention differential coefficient (if applicable) currently enjoyed equals the grade 1 salary coefficient, then transfer to grade 1 and the time for considering the next salary increase will be calculated from when the previous salary grade decision was made.

Example 3: Comrade C, formerly the Director of a Class I enterprise, with a grade 2/2 salary level and a salary coefficient of 6.03 from May 1995. Now appointed to hold the position of Deputy General Manager of a State-owned enterprise of special class, he is assigned a grade 1 salary level of the State-owned enterprise of special class, with a salary coefficient of 6.03. The time for considering the next salary increase will be calculated from May 1995.

c. If the position salary coefficient or the professional and vocational salary coefficient plus the position allowance and the retention differential coefficient (if applicable) currently enjoyed is higher than the grade 1 salary coefficient but lower than the grade 2 salary coefficient, then assign to grade 1 and enjoy the retention differential coefficient. The time for considering the next salary increase will be calculated from when the previous salary grade decision was made. When the salary is increased to grade 2, the retention differential coefficient will cease to be enjoyed.

Example 4: Comrade H, a Professor at a University, in January 1994 was assigned a salary coefficient of 5.6 (grade 9.9 scale for Associate Professor and Senior Lecturer) and had a position allowance of 0.6; the current total salary coefficient is 6.20 (5.6 + 0.6), now appointed to hold the position of Deputy General Manager, he is transferred to grade 1, the Deputy General Manager position, with a salary coefficient of 6.03 and enjoys a retention differential coefficient of 0.17 (because the current total salary coefficient is 6.2, which is higher than the grade 1 Deputy General Manager salary coefficient of 6.03, but lower than grade 2: 6.34). The time for considering the next salary increase will be calculated from January 1994.

d. If the position salary coefficient or the professional and vocational salary coefficient plus the position allowance and the retention differential coefficient (if applicable) currently enjoyed equals the grade 2 salary coefficient, then transfer to grade 2. In cases where the current total salary coefficient is higher than the grade 2 salary coefficient, still assign to the grade 2 salary coefficient and enjoy the retention differential coefficient.

Example 5: Comrade D is currently the Department Head, assigned a salary coefficient of 6.67 (grade 6/7 scale for Senior Administrative and Public Service Specialist), and has a position allowance of 0.8; the current total salary coefficient is 7.47 (6.67 + 0.8), now appointed to hold the position of General Manager, he is transferred to grade 2, the General Manager position, with a salary coefficient of 7.06 and enjoys a retention differential coefficient of 0.31 (7.47 - 7.06).

Example 6: Comrade K is currently assigned a salary coefficient of 5.85 (grade 4/7 scale for Senior Administrative and Public Service Specialist) and has a position allowance of 0.7; the current total salary coefficient is 6.55 (5.85 + 0.7), now appointed to hold the position of Deputy General Manager, he is transferred to grade 2, the Deputy General Manager position, with a salary coefficient of 6.34 and enjoys a retention differential coefficient of 0.21 (6.55 - 6.34).

3- For the positions of Department Head, Deputy Department Head, and equivalent positions in enterprises of special class, the salary is set according to the professional and vocational scale and grade and enjoy the position allowance issued together with Decree No. 26/CP dated May 23, 1993 of the Government "Provisional Regulations on the new wage system in enterprises."

The specific amount of the position allowance is as follows:

- For Department Heads and equivalent positions, the position allowance is 0.6 of the minimum wage.

- For Deputy Department Heads and equivalent positions, the position allowance is 0.5 of the minimum wage.

4- For the positions of Director, Deputy Director, Chief Accountant, Department Head, Deputy Department Head, and equivalent positions in member enterprises of State-owned enterprises of special class, the enterprise classification and salary assignment shall comply with the provisions of Circular Joint No. 21/LB-TT dated June 17, 1993 of the Joint Ministry of Labor - Invalids and Social Affairs - Finance.

III- IMPLEMENTATION

1- Based on the provisions of this Circular, it is requested that Ministries, sectors, Provincial People's Committees directly under the Central Government prepare files to propose the classification of enterprises of special class for State-owned Corporations and independent State-owned enterprises meeting the conditions stipulated.

2- After being decided by the Prime Minister to classify enterprises of special class, Ministries, sectors, Provincial People's Committees directly under the Central Government will forecast salaries for leadership positions in enterprises of special class, prepare lists according to the model specified in this Circular, send letters to the Ministry of Labor - Invalids and Social Affairs for review and agreement, and then issue decisions on salary assignments according to the current management hierarchy of cadres.

This Circular takes effect from March 28, 1996.

During implementation, if there are any difficulties, it is requested that Ministries, sectors, and localities report them to the Joint Ministry of Labor - Invalids and Social Affairs - Finance for consideration and resolution.