Decree No. 206/2004/ND-CP on management of labor, wages, and income in state-owned companies

DECREE

Regulations on labor management, wages, and income in state-owned companies

Management of labor, wages, and income in state-owned companies

THE GOVERNMENT

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

Pursuant to the Labor Code on June 23, 1994; Law Amending and Supplementing Certain Articles of the Labor Code on April 2, 2002;

Pursuant to the State Enterprise Law dated November 26, 2003;

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

DECREE:

Article 1. The scope of application of the regulations on labor management, wages, and income under this Decree includes:

1. State-owned enterprises:

State-owned corporations;

Independent state-owned companies.

2. Independent accounting subsidiaries of State-owned corporations established by the State's decision to invest and establish.

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

Article 2. The subjects to which these regulations apply include employees working under employment contracts as stipulated by the Labor Code and Deputy General Directors, Deputy Directors, Chief Accountants (excluding Deputy General Directors, Deputy Directors, and Chief Accountants working under contracts).

Article 3. Labor management

1. Based on workload, quality, requirements, and production and business tasks, each company shall determine its annual labor usage plan and register with the owner's representative before implementation;

2. On the basis of the registered labor usage plan, the company shall directly recruit workers according to its recruitment regulations and sign employment contracts in accordance with the provisions of labor laws;

3. Each year, the company has the responsibility to evaluate the labor usage plan and handle the benefits for workers without work in accordance with the provisions of labor laws.

Article 4. Companies may apply an adjustment factor not exceeding twice the national minimum wage set by the Government as the basis for calculating the unit price of wages. When applying this adjustment factor, the company must ensure the following conditions:

1. Pay taxes to the state budget as prescribed by law;

2. The average wage increase must be lower than the average productivity increase;

3. Planned profit must not be lower than the actual profit achieved in the previous year, except in special cases as prescribed by the Government.

Article 5. The construction of the unit price of wages and the management of wages in companies must comply with the following provisions:

1. The unit price of wages shall be established based on advanced labor norms and appropriate wage factors in accordance with the provisions of Article 4 of this Decree;

2. The unit price of wages must be registered with the owner's representative before implementation;

For special-class companies and companies performing public service activities that have a significant position in the national economy, the unit price of wages shall be reviewed and reported to the Prime Minister by the Ministry of Labor, War Invalids and Social Affairs and the Ministry of Finance.

3. The actual wage fund shall be determined based on the degree of completion of production and business targets, labor productivity, realized profits, and payment of wages to workers according to the company's wage regulations.

Article 6. Bonus system

1. The bonus fund from the company's commendation fund shall be determined in accordance with the provisions of Government Decree No. 199/2004/NĐ-CP dated December 3, 2004, on the financial management regulations of state-owned companies and the management of state capital invested in other enterprises;

2. Bonuses for workers shall be implemented according to the company's bonus regulations.

Article 7. The General Director, Director of the company shall be responsible for:

1. In the first quarter of each year, develop the profit plan; the labor usage plan; the unit price of wages and register with the owner's representative. At the same time, send the unit price of wages to the local tax authority as the basis for taxation;

2. Determine the actual wage fund and bonus fund of the company;

3. Establish labor norms; technical grade standards for skilled workers; professional and vocational standards for civil servants and staff; regulations on salary grade promotion and wage increase; wage and bonus regulations in accordance with the law, ensuring democracy, fairness, transparency, and encouraging those with talent, high professional and technical skills, and high labor productivity who contribute significantly to the company;

4. Consolidate the organizational structure and strengthen the number and quality of civil servants engaged in labor and wage work at the company in accordance with the provisions of the owner's representative;

5. In the first quarter of each year, report to the owner's representative and the provincial Department of Labor, War Invalids and Social Affairs the results of production, business, profit, labor, wages, and bonuses of the previous year compared to the planned year of the company.

Article 8. The owner's representative shall be responsible for:

1. The Board of Directors of the company:

a) Approve the profit plan; the labor usage plan; labor norms; the unit price of wages; technical grade standards for skilled workers; professional and vocational standards for civil servants and staff; regulations on salary grade promotion and wage increase; wage and bonus funds and wage and bonus regulations of the company;

b) Direct, inspect, and supervise the implementation of the provisions of this Decree;

c) Report to the Ministry of Labor, War Invalids and Social Affairs and the Ministry of Finance on the unit price of wages for special-class companies and companies performing public service activities that have a significant position in the national economy;

d) Decide on the organizational structure and staffing of civil servants engaged in labor and wage work at the company;

đ) In the first quarter of each year, report to the Ministry of Labor, War Invalids and Social Affairs or the sectoral management ministry, or the provincial People's Committee the results of production, business, profit, labor, wages, and bonuses of the previous year compared to the planned year of the company.

2. Sectoral management ministries, provincial People's Committees:

a) Receive registration of profit plans; labor usage plans; unit prices of wages; wage and bonus regulations and reports on the results of production, business, profit, labor, wages, and bonuses of the previous year compared to the planned year of companies under their management;

b) Guide, inspect, and supervise the implementation of the provisions of this Decree;

c) Coordinate with the Ministry of Labor, War Invalids and Social Affairs and the Ministry of Finance to review the unit price of wages for special-class companies and companies performing public service activities that have a significant position in the national economy;

d) In the first quarter of each year, report to the Ministry of Labor, War Invalids and Social Affairs the results of production, business, profit, labor, wages, and bonuses of the previous year compared to the planned year of companies under their management.

Article 9. The Ministry of Labor, Invalids and Social Affairs is responsible for:

1. Guide the methods for establishing labor norms; technical grade standards for skilled workers; professional and vocational standards for civil servants and staff; labor productivity; average wages; unit price of wages and wage and bonus regulations of the company;

2. To主持，与财政部合作审定特别类公司和承担对国民经济有重要地位的公益事业公司的工资单价。

Article 10. This Decree takes effect fifteen days after its publication in the Official Gazette and replaces Government Decree No. 28/CP dated March 28, 1997, and Government Decree No. 03/2001/NĐ-CP dated January 11, 2001, on wage management reform and income management in state-owned enterprises.

The provisions of this Decree shall be implemented as of January 1, 2005.

Article 11. Ministers, Heads of ministerial-level agencies, Heads of government agencies, and Chairpersons of provincial People's Committees directly under the central government are responsible for implementing this Decree.