Joint Circular No. 23/2005/TTLT/BLDTBXH-BTC guides the ranking and salary grading for full-time members of the Board of Directors, General Directors, Directors, Deputy General Directors, Deputy Directors, and Chief Accountants of state-owned companies.

 

JOINT CIRCULAR

GUIDELINES FOR RANKING AND SALARY GRADING FOR FULL-TIME BOARD MEMBERS, GENERAL MANAGERS, MANAGERS, DEPUTY GENERAL MANAGERS, DEPUTY MANAGERS, AND CHIEF ACCOUNTANTS IN STATE ENTERPRISES

Implementing Clause 3, Article 7, Decree No. 205/2004/NĐ-CP dated December 14, 2004 of the Government on the wage scale system and allowance system in state enterprises, the Ministry of Labor, Invalids and Social Affairs and the Ministry of Finance jointly issue guidelines for ranking enterprises and salary grading for full-time board members, general managers, managers, deputy general managers, deputy managers, and chief accountants as follows:

I. OBJECTS AND CONDITIONS FOR ENTERPRISE RANKING

1. Objects:

The objects subject to this regulation are enterprises established and operating under the Law on State-Owned Enterprises, including:

a) Independent state-owned enterprises;

b) Member enterprises (both independent accounting and dependent accounting) of state-owned holding companies;

c) Parent companies operating under the parent company-subcompany model as stipulated in Decree No. 153/2004/NĐ-CP dated August 9, 2004 of the Government.

These enterprises are referred to collectively as enterprises.

2. Conditions:

Enterprises must meet both of the following conditions to be eligible for ranking:

a) Enterprise ranking criteria have been issued jointly by the Ministry of Labor, Invalids and Social Affairs and the Ministry of Finance based on proposals from relevant ministries (Annex 01 attached);

b) The year of ranking does not fall within the list of ownership form conversion (shareholding, transfer, sale); management method change (contracting, leasing); restructuring (merger, consolidation, division); dissolution, bankruptcy.

II. METHODS OF RANKING AND PROCEDURES FOR ENTERPRISE RANKING

1. Ranking methods:

a) Based on the ranking criteria in Annex 01 and the ranking guidance in Annex 02, enterprises shall implement the ranking process according to the following provisions:

- For enterprises that have already been officially ranked by competent authorities, they must re-rank within one year from the effective date of this Circular and submit to the competent authority for decision;

- For newly established enterprises that have not yet been ranked, they must immediately conduct ranking upon the effective date of this Circular and submit to the competent authority for decision;

- For newly established enterprises, they shall temporarily rank at Level II or Level III based on the ranking criteria issued by the competent authority and submit to the competent authority for decision. After one year from the temporary ranking date, they must conduct formal ranking.

b) Three years (36 months) after the ranking decision date, enterprises must re-rank and submit to the competent authority for decision.

For temporarily ranked enterprises, if the new ranking level is equal to or lower than the temporary ranking level, the re-ranking period will start from the temporary ranking date.

c) The ranking methods specified in points a and b above only apply to enterprises ranked at Levels I, II, and III.

For holding companies and enterprises that have been specially ranked by the Prime Minister according to the criteria set out in Decision No. 185/TTg dated March 28, 1996 of the Prime Minister, or those ranked as holding companies by relevant ministries, provincial people's committees, such enterprises retain their original ranking levels.

For holding companies (including enterprises) meeting the ranking criteria set out in Decision No. 185/TTg, they should propose to the joint ministries to report to the Prime Minister for special ranking.

2. Procedures and Documents for Ranking:

a) Responsibilities of the enterprise: based on the provisions in Part I above, the enterprise shall conduct ranking and submit a letter along with the required documents listed below to the competent superior authority for ranking decisions (relevant ministry; provincial people's committee; board of directors of holding companies established pursuant to Decision No. 91/TTg dated March 7, 1994 of the Prime Minister). In cases where the enterprise ranks at Level I, it must report to the competent superior authority to register with the Ministry of Labor, Invalids and Social Affairs, and the Ministry of Finance. The application documents include:

- Application letter;

- Point calculation table according to ranking criteria (Form 01); Summary table of actual average number of employees (Form 03); List of dependent member units (Form 04);

- Certified copy of the establishment decision and business registration certificate;

- Certified copies of financial statements for the two preceding years and the plan for the ranking year.

Financial statements must be prepared in accordance with Decision No. 167/2000/QĐ-BTC dated October 25, 2000 and Circular No. 23/2005/TT-BTC dated March 30, 2005 of the Ministry of Finance (if audited, attach a certified copy of the audit report).

b) Relevant ministries, provincial people's committees, boards of directors of holding companies established pursuant to Decision No. 91/TTg dated March 7, 1994 of the Prime Minister shall be responsible for:

- Receiving and reviewing the ranking application documents and issuing decisions on ranking at Levels II and III for enterprises under their management within 15 days from receipt of complete documents.

- Receiving and submitting a letter (with attached documents) to the Ministry of Labor, Invalids and Social Affairs and the Ministry of Finance for registration for enterprises applying for Level I ranking and issuing a Level I ranking decision after receiving confirmation from the Ministry of Labor, Invalids and Social Affairs and the Ministry of Finance.

- Annually in the fourth quarter, compiling the number of holding companies and enterprises ranked under their management (using Form 05 and Form 06) and reporting to the Ministry of Labor, Invalids and Social Affairs.

c) The Ministry of Labor, Invalids and Social Affairs and the Ministry of Finance shall be responsible for receiving registration documents for Level I ranking and issuing a response within one month from receipt of complete documents.

III. SALARY GRADING BASED ON RANK

1. Principles:

Salary grading for full-time board members, general managers, managers, deputy general managers, deputy managers, and chief accountants (referred to collectively as company management officials) shall be based on the following principles:

a) The company is ranked at which level shall be determined according to the position held to assign a corresponding salary grade from the salary table for members of the Board of Directors or from the salary tables for General Director, Director, Deputy General Director, Deputy Director, Chief Accountant. When the company's rank changes (upgraded or downgraded), the salary assignment will also change accordingly;

b) When a management staff no longer holds positions under the two aforementioned salary tables, they must be assigned a salary based on their new job responsibilities, without retaining the previous salary grade;

c) The entity that appoints the positions under the two aforementioned salary tables shall also decide on the salary assignment.

2. Salary Assignment:

The salary assignment shall be carried out according to the following provisions:

a) When the company's rank does not change, a management staff currently receiving a salary grade corresponding to a certain position shall retain that salary grade.

b) When the company is upgraded from a lower rank to a higher rank, a management staff currently receiving a salary grade corresponding to a certain position shall be assigned to that position according to the following regulations:

- Grade 1 of the lower rank shall be assigned to Grade 1 of the higher rank, with the time for the next salary increase calculated from the date of the decision to assign Grade 1 of the higher rank;

- Grade 2 of the lower rank shall be assigned to Grade 1 of the higher rank, if the time spent at Grade 2 of the lower rank is less than three years, the time for the next salary increase shall be calculated from the date of the decision to assign Grade 2 of the lower rank;

- Grade 2 of the lower rank shall be assigned to Grade 2 of the higher rank, if the time spent at Grade 2 of the lower rank is three years or more, or if the coefficient of the position grade 2 of the lower rank plus the retention difference coefficient (if any) is higher than the coefficient of Grade 1 of the higher rank.

In case a management staff has a position coefficient plus the retention difference coefficient (if any) higher than the coefficient of Grade 2 of the higher rank, they shall be reassigned to Grade 2 of the higher rank and enjoy the recalculated retention difference coefficient based on the transferred salary grade (if any).

c) When the company is downgraded from a higher rank to a lower rank, a management staff currently receiving a salary grade corresponding to a certain position shall be assigned to that position according to the following regulations:

- Grade 1 of the higher rank shall be assigned to Grade 1 of the lower rank, with the time for the next salary increase calculated from the date of the assignment to Grade 1 of the lower rank;

- Grade 2 of the higher rank shall be assigned to Grade 2 of the lower rank.

d) For newly appointed management staff who assume a certain position, they shall be assigned to that position according to the company's rank as follows:

- Assigned to Grade 1, if the coefficient before appointment is equal to or lower than the coefficient of Grade 1. The time for the next salary increase shall be calculated from the date of assignment to Grade 1. If the difference between the coefficient before appointment and the coefficient of Grade 1 is less than 70% of the difference between the coefficients of Grades 1 and 2, the time for the next salary increase shall be calculated from the date of the previous salary assignment;

- Assigned to Grade 2 if the coefficient before appointment is higher than the coefficient of Grade 1.

e) For management staff no longer holding positions under the two aforementioned salary tables, they shall be reassigned a salary based on their new job and position, without retaining the old coefficient or transferring to a new equivalent coefficient.

Example: Mr. M, currently assigned to Grade 2, Director of a Company Rank II with a coefficient of 6.31 (before being assigned to his position, Mr. M was assigned to Grade 4, Senior Specialist with a coefficient of 4.10 since December 1996). In October 2005, Mr. M was transferred to Head of Planning Department of the Holding Company, his salary reassignment shall be carried out as follows:

Taking the professional coefficient of Mr. M before being assigned to his position as a Senior Specialist, Grade 4 with a coefficient of 4.10 (as stipulated in Decree No. 26/CP dated May 23, 1993 of the Government), he shall be reassigned to a new coefficient of 4.99 (as stipulated in Decree No. 205/2004/NĐ-CP dated December 14, 2004 of the Government). The time spent at the coefficient of 4.10 until ceasing to hold a managerial position is 8 years and 10 months (from December 1996 to October 2005), so Mr. M shall be reassigned to Grade 6, Senior Specialist with a coefficient of 5.65 and enjoy the position allowance of Head of Department of the Holding Company. The remaining time not sufficient for another grade increase (8 years and 10 months - 6 years/2 grades = 2 years and 10 months) shall be retained until reaching 3 years (36 months) when he can be promoted to the next grade, with the time for the next salary increase calculated from the date of promotion.

3. Salary Assignment for Management Staff of Holding Companies:

a) For Holding Companies and companies that have been decided by the Prime Minister to be ranked as special; those companies that have been ranked as Holding Companies by the Ministry managing the sector or the People's Committee of the province before this Circular takes effect, management staff currently holding a position and assigned a salary grade shall be reassigned to a new salary grade according to the guidance provided in point 2 above;

b) For companies included in the overall plan, undergoing transformation and operating under the parent company - subsidiary model as stipulated in Decree No. 153/2004/NĐ-CP dated August 9, 2004 of the Government, and approved by the Prime Minister, from the effective date of this Circular until the end of 2006, management staff shall temporarily be assigned salaries according to the provisions in Document No. 4532/VPCP-VX dated August 12, 2005 of the Office of the Government, specifically:

- For Holding Companies, independent state-owned companies, and independent accounting subsidiaries, management staff of the parent company currently holding a position shall be assigned a salary corresponding to that position according to the enterprise rank assigned before transitioning to operate under the parent company - subsidiary model.

- For independent state-owned enterprises and independent accounting subsidiaries of special-class holding companies currently ranked at level I, if they meet all three conditions: state capital of 100 billion VND, annual tax payment to the state budget of 30 billion VND, and profit of 30 billion VND or more, they shall report to the Ministry managing the industry, the People's Committee of the province, and the Board of Directors of the holding company established pursuant to Decision No. 91/TTg dated March 7, 1994 of the Prime Minister, along with a letter and attached documents (a copy of the overall plan for transitioning to the parent company-subcompany model approved by the Prime Minister; the decision on ranking at level I and the financial statements of the parent company for the two most recent consecutive years before consolidation with the financial statements of subsidiary companies) to register with the Ministry of Labor, Invalids, and Social Affairs to rank salaries for management personnel according to the holding company level and equivalent to the provisions set out in paragraph b, point 2, Section III of this Circular.

From 2007 onwards, management personnel of the aforementioned companies will be ranked according to the company level as guided by the Ministry of Labor, Invalids, and Social Affairs.

IV. EFFECTIVE DATE OF IMPLEMENTATION

1. This Circular shall take effect fifteen days after its publication in the Official Gazette.

Abolish Circular Jointly Issued No. 17/1998/TTLT-BLDTBXH-BTC dated December 31, 1998, and Circular Jointly Issued No. 10/2000/TTLT-BLDTBXH-BTC dated April 4, 2004, of the Ministry of Labor, Invalids, and Social Affairs and the Ministry of Finance guiding the ranking of state-owned enterprises.

2. State-owned enterprises operating under the Law on Enterprises and other economic sectors' enterprises when applying the provisions of this Circular must strictly comply with the regulations on ranking and salary grading as stipulated in this Circular. However, enterprises belonging to other economic sectors do not need to go through the registration process with the Ministry of Labor, Invalids, and Social Affairs and the Ministry of Finance or submit to state agencies for determination of their ranking as prescribed in this Circular.

During implementation, if there are any difficulties, the Ministries managing the industries, the People's Committees of the provinces, and the Boards of Directors of holding companies established pursuant to Decision No. 91/TTg dated March 7, 1994 of the Prime Minister are requested to reflect these issues to the Ministry of Labor, Invalids, and Social Affairs and the Ministry of Finance for study and resolution.

 

Appendix No. 01

RANKING CRITERIA FOR COMPANIES

(Annexed to Circular No. 23/2005/TTLT-BLDTBXH-BTC
dated August 31, 2005)

 

1. MECHANICAL INDUSTRY

 

RANKING POINT FRAMEWORK

 

 

2. METALLURGY INDUSTRY

 

RANKING POINT FRAMEWORK

 

 

3. ELECTRICITY INDUSTRY (ELECTRICITY PRODUCTION AND DISTRIBUTION)

 

RANKING POINT FRAMEWORK