Joint Circular No. 23/1997/TTLT-BLDTBXH-BTC guiding the salary classification for managerial staff and leadership staff of enterprises established pursuant to Decision No. 90/TTg dated March 7, 1993.

JOINT CIRCULAR

Guidelines for determining salaries for managerial and leadership staff of enterprises established pursuant to Decision No. 90/TTg dated March 7, 1993

Pursuant to Decision No. 90/TTg dated March 7, 1993

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Implementing Decree No. 110/1997/NĐ-CP dated November 18, 1997 of the Government on supplementing the coefficient of management position salary levels and leadership position allowances for enterprises, after exchanging opinions with relevant ministries, the Ministry of Labor, Invalids and Social Affairs and the Ministry of Finance provide guidelines for determining salaries for managerial staff of enterprises established pursuant to Decision No. 90/TTg dated March 7, 1993 of the Prime Minister as follows:

I. APPLICABLE OBJECTS:

The applicable subjects are managerial and leadership staff of State-owned corporations registered and established according to Article 5 of Decision No. 90/TTg dated March 7, 1993 of the Prime Minister on restructuring state-owned enterprises (referred to as Corporation 90/TTg), which do not meet the conditions to be classified as special category enterprises under Decision No. 185/TTg dated March 28, 1996 of the Prime Minister.

Article 5 of Decision No. 90/TTg of the Prime Minister mentioned above is specified as follows:

a) The Corporation is a state-owned enterprise having at least five affiliated units related to each other in technology, finance, investment programs, development, service provision including supply, transportation, consumption, information, and training.

b) The entire Corporation has a statutory capital of 500 billion VND, for some Corporations in specific industries, the statutory capital may be lower but cannot be less than 100 billion VND.

c) The Corporation implements economic accounting in one of the following two forms:

- Accounting for the entire Corporation, affiliated units report accounts;

- Comprehensive accounting with classification and delegation to affiliated units.

d) There are economic and technical justifications for establishing the Corporation and a business plan for the Corporation, along with appraisals of these justifications.

e) There is a staffing plan for leadership and management personnel meeting standards and having sufficient capacity to manage all activities of the Corporation.

g) There is a charter of organization and operation that has been approved by the supervising authority and adhered to in practice.

II. TRANSITION TO SALARIES AND POSITION ALLOWANCES FOR MANAGEMENT AND LEADERSHIP STAFF OF CORPORATION 90/TTG:

When Corporation 90/TTg meets the conditions and is determined by the competent ministry or agency, or the Chairman of the People's Committee of a province or centrally-administered city to rank salaries according to Decree No. 110/1997/NĐ-CP dated November 18, 1997 of the Government, the transition to new salaries shall be implemented for management and leadership staff of the Corporation as follows:

1/ General principles:

- Management staff holding positions such as General Director, Deputy General Director, Chief Accountant shall be ranked according to the corresponding position titles as stipulated in Article 1 of Decree No. 110/1997/NĐ-CP dated November 18, 1997 of the Government.

- Leadership staff holding positions such as Department Head, Deputy Department Head or equivalent shall be ranked according to the professional and technical salary scale for administrative and service staff in enterprises issued together with Decree No. 26/CP dated May 23, 1993 of the Government and shall enjoy leadership position allowances as stipulated in Article 1 of Decree No. 110/1997/NĐ-CP dated November 18, 1997 of the Government.

- Upon ceasing to hold a position, they shall not enjoy the salary or position allowance of Corporation 90/TTg and shall receive salary and position allowance according to their current job and position; the previous salary or position allowance level of Corporation 90/TTg shall not be retained as a basis for transitioning to an equivalent salary level.

2/ Transition to salaries for General Director, Deputy General Director, Chief Accountant:

a) If the current coefficient of the position salary or total coefficient of professional and technical salary plus position allowance and retention coefficient (if any) is lower than the coefficient of the first grade, then they shall be ranked at the first grade and the time for the next salary review shall be calculated from the date of the decision to rank the new salary coefficient. In case the total salary coefficient (including the salary coefficient plus position allowance and retention coefficient, if any) currently enjoyed is lower than the coefficient of the first grade, but the difference is not equal to 70% of the difference between the first and second grades, the time for the next salary review shall be calculated from the date of ranking the old salary coefficient.

Example 1: Comrade A was appointed as Deputy General Director and currently holds a salary coefficient of 4.86 since July 1994 (grade 2/4 in the senior specialist cadre scale in enterprises) and enjoys a position allowance of 0.5; the total salary coefficient currently enjoyed is 5.36 (4.86 + 0.5). Therefore, he shall be ranked at the first grade corresponding to the Deputy General Director position with a salary coefficient of 5.72. The time for the next salary review shall be calculated from the date of the decision to rank the first grade salary coefficient.

Example 2: Comrade B, formerly Director of a Class I enterprise, held a grade 2/2 salary with a coefficient of 6.03 and a retention coefficient of 0.24 since June 1995; the total salary coefficient currently enjoyed is 6.27. Upon being appointed as General Director of Corporation 90/TTg, he shall be ranked at the first grade with a salary coefficient of 6.34. The time for the next salary review shall be calculated from June 1995, because:

b) If the current coefficient of the position salary or total coefficient of professional and technical salary plus position allowance and retention coefficient (if any) is equal to the coefficient of the first grade, then they shall be ranked at the first grade and the time for the next salary review shall be calculated from the date of the decision to rank the old salary grade.

Example 3: Comrade C, formerly Director of a Class I enterprise, held a grade 1/2 salary with a coefficient of 5.72 since May 1995. Now appointed as Deputy General Director of Corporation 90/TTg, he shall be ranked at the first grade of Deputy General Director with a salary coefficient of 5.72. The time for the next salary review shall be calculated from May 1995.

c) If the current coefficient of the position salary or total coefficient of professional and technical salary plus position allowance and retention coefficient (if any) is higher than the coefficient of the first grade but lower than the coefficient of the second grade, they shall be ranked at the first grade and enjoy the retention coefficient. The time for the next salary review shall be calculated from the date of the decision to rank the old salary grade. When promoted to the second grade, the retention coefficient shall cease to be enjoyed.

Example 4: Comrade D, Associate Professor at a University, in January 1994 was assigned a salary coefficient of 5.31 (rank 8/9 for the Associate Professor and Senior Lecturer grade) and received a position allowance of 0.5; the current total salary coefficient enjoyed is 5.81 (5.31 + 0.5), then appointed to the position of Deputy General Director, would be reassigned to rank 1 with the Deputy General Director position salary coefficient of 5.72 and enjoy a retention differential coefficient of 0.09 (since the current total salary coefficient enjoyed is 5.81 higher than the Deputy General Director rank 1 salary coefficient of 5.72 but lower than the Deputy General Director rank 2 salary coefficient: 6.03). The time for the next salary increase review will be from January 1994.

d) If the position salary coefficient or the total professional and vocational salary coefficient plus position allowance and retention differential coefficient (if any) currently enjoyed equals the second-level salary coefficient, then reassign to rank 2. In case the current total salary coefficient is higher than the second-level salary coefficient, then assign to the second-level salary coefficient and enjoy the retention differential coefficient. Example 5: Comrade H, Associate Professor, University President, currently assigned a salary coefficient of 5.85 (rank 4/7 for the high-level specialist grade under the administrative pay scale - 01) and has a position allowance of 0.9; the current total salary coefficient enjoyed is 6.75 (5.85 + 0.9), then appointed to the position of General Director, would be reassigned to rank 2 with the General Director position salary coefficient of 6.72.

Example 6: Comrade K, Department Head, currently assigned a salary coefficient of 6.26 (rank 5/7 for the high-level specialist grade under the administrative pay scale - 01) and has a position allowance of 0.8; the current total salary coefficient enjoyed is 7.06 (6.26 + 0.8), then appointed to the position of General Director, would be reassigned to rank 2 with the General Director position salary coefficient of 6.72 and enjoy a retention differential coefficient of 0.34 (7.06 - 6.72).

e) In the case where a company ranked first re-registers and establishes a Holding Company 90/TTg, the salary assignment for Holding Company management staff shall be as follows:

- For the Director of a first-ranked company appointed to the position of Holding Company General Director, reassign to rank I with a salary coefficient of 6.34. The time for the next salary increase review will be from when the new salary coefficient rank is assigned.

- For the Director of a first-ranked company appointed to the position of Holding Company Deputy General Director, reassign to the corresponding rank of the Deputy General Director position, rank 1 to rank 1, rank 2 to rank 2.

- For the Deputy Director of a first-ranked company appointed to the position of Holding Company Deputy General Director, reassign to rank I of the Deputy General Director position with a salary coefficient of 5.72. The time for the next salary increase review will be from when the new salary coefficient rank is assigned.

3/ For the positions of Department Head, Deputy Department Head, and equivalent positions in Holding Company 90/TTg, the salary shall be assigned according to the professional and vocational grade and rank based on the professional and technical, executive, and service pay scale issued together with Decree No. 26/CP dated May 23, 1993 of the Government, and enjoy leadership position allowances as stipulated in Article 1 of Decree No. 110/1997/NĐ-CP dated November 18, 1997 of the Government, with specific allowances as follows:

- For Department Heads and equivalent positions, the position allowance is: 0.5 based on the minimum wage.

- For Deputy Department Heads and equivalent positions, the position allowance is: 0.4 based on the minimum wage.

4/ The salary coefficient for management staff and leadership position allowances stipulated in Article 1 of Decree No. 110/1997/NĐ-CP dated November 18, 1997 of the Government shall not be applied to increase the salary ranks of management and leadership staff of enterprises classified as first-ranked enterprises according to Circular No. 21/LB-TT dated June 2, 1993 of the Ministry of Labor - Invalids and Social Affairs - Finance.

5/ For the positions of General Director, Deputy General Director, Chief Accountant, Department Head, Deputy Department Head, and equivalent positions in member enterprises of Holding Company 90/TTg, the classification of member enterprises and the assignment of salaries for the aforementioned positions shall be carried out in accordance with the provisions of Joint Circular No. 21/LB-TT dated June 17, 1993 of the Ministry of Labor - Invalids and Social Affairs - Finance.

III. IMPLEMENTATION

1/ Based on the guidance and regulations set forth in this Circular, relevant Ministries managing industries and sectors, People's Committees of provinces and centrally-administered cities shall propose salary assignments for management staff of Holding Company 90/TTg and submit written communications to the Ministry of Labor - Invalids and Social Affairs for consideration. After receiving written comments from the Ministry of Labor - Invalids and Social Affairs, relevant Ministries managing industries and sectors, People's Committees of provinces and centrally-administered cities shall issue decisions on salary assignments according to the current hierarchical management of cadres.

The accompanying request letter should include:

- A certified copy of the decision to establish Holding Company 90/TTg;

- A list proposing salary assignments for management staff of Holding Company 90/TTg by relevant Ministries managing industries and sectors, People's Committees of provinces and centrally-administered cities according to the model specified in this Circular.

2/ This Circular takes effect from December 3, 1997.

During implementation, if there are any difficulties, relevant Ministries managing industries and sectors, People's Committees of provinces and centrally-administered cities are requested to report to the Ministry of Labor - Invalids and Social Affairs for consideration and resolution.