Consolidated Document number 2651/VBHN-BLDTBXH stipulates the management of labor, wages, and bonuses for employees working in a state-owned limited liability company with 100% state capital.

DECREE

Provisions on labor management, wages, and bonuses for employees working in a state-owned joint stock company with 100% state capital contribution

Decree No. 51/2016/NĐ-CP dated June 13, 2016, of the Government stipulates labor management, wages, and bonuses for employees working in a state-owned joint stock company with 100% state capital contribution, effective from August 1, 2016, amended and supplemented by:

Decree No. 21/2024/NĐ-CP dated February 23, 2024, of the Government amends and supplements some articles of Decree No. 51/2016/NĐ-CP dated June 13, 2016, of the Government stipulating labor management, wages, and bonuses for employees working in a state-owned joint stock company with 100% state capital contribution and Decree No. 52/2016/NĐ-CP dated June 13, 2016, of the Government stipulating wages, remuneration, and bonuses for managers of state-owned joint stock companies with 100% state capital contribution, effective from April 10, 2024.

Pursuant to the Law on Government Organization dated June 19, 2015;

Based on the Labor Code dated June 18, 2012;

Based on the Enterprise Law dated November 26, 2014;

Pursuant to the Law on Management and Use of State Capital for Investment in Business Operations dated November 26, 2014;

Decree No. 07/2021/NĐ-CP

The Government promulgates a decree stipulating labor management, wages, and bonuses for employees working in a state-owned joint stock company with 100% state capital contribution^[1]

Chapter I. GENERAL PROVISIONS

Article 1. Scope of Regulation

This Decree stipulates labor management, wages, and bonuses for employees working in a state-owned joint stock company with 100% state capital contribution, including:

1. A state-owned joint stock company with 100% state capital contribution that is the parent company of a state economic group, the parent company of a state corporation, or a parent company within a group of parent companies - subsidiary companies.

2. An independent state-owned joint stock company with 100% state capital contribution.

The state-owned joint stock company referred to in Clauses 1 and 2 of this Article hereinafter shall be called the company.

Article 2. Applicability

1. Employees work under labor contracts as prescribed by the Labor Code.

2. Members of the Board of Directors or the Chairman of the company, Head of the Supervisory Board, Supervisors, General Director, Company Director.

3. Ministries, ministerial-level agencies, government-affiliated agencies, provincial People's Committees, municipal People's Committees directly under the central government, or organizations established according to the provisions of the law assigned by the Government to perform the rights and responsibilities of the owner representative towards the company (hereinafter collectively referred to as the owner representative agency).

4. Agencies, organizations, and individuals related to labor management, wages, and bonuses for employees at the company.

Article 3. Labor Management

1. The company must develop an annual labor plan as a basis for recruitment and utilization of labor.

2. The labor plan is developed based on production and business plans, organizational structure, rational labor rearrangement (especially reviewing management levels and streamlining indirect labor), and labor norms of the company.

3. The total number of workers in the annual labor plan under normal production and business conditions shall not exceed 5% compared to the average actual number of workers used in the immediately preceding year (after organizational restructuring and rearrangement as provided for in Clause 2 of this Article).

4. The annual labor plan is prepared by the General Director or the Director and submitted to the Board of Directors or the Chairman of the company for approval. The Chairman of the Board of Directors or the Chairman of the company, the General Director, and the Director shall be responsible for the labor plan of the company.

5. The Chairman of the Board of Directors or the Chairman of the company must report to the owner representative agency for comments before approving the labor plan. The owner representative agency has the responsibility to review and comment on the company's labor plan. For the parent company of State Economic Groups, the parent company of Special-Class State Corporations, and State Corporations performing public service tasks that play a crucial role in the economy, they must simultaneously submit the labor plan to the Ministry of Labor, Invalids, and Social Affairs for consolidation and general supervision.

6. Based on the labor plan, the General Director or the Director organizes recruitment, deployment, and utilization of labor, ensuring transparency and fairness in accordance with the law and the recruitment and utilization regulations, and the Charter of the company.

7. Annually, the Board of Directors or the Chairman of the company directs the General Director or the Director to evaluate the implementation of the labor utilization plan, determine responsibilities in recruitment and utilization of labor, and resolve all entitlements and benefits for employees whose labor contracts are terminated.

8. In cases where recruitment exceeds the plan or does not comply with the plan, leading to unemployed workers who must have their labor contracts terminated, the General Director or the Director shall be responsible to the Board of Directors or the Chairman of the company, and the Board of Directors or the Chairman of the company shall be responsible to the owner representative agency and shall not be entitled to bonuses, salary increases, extension of salary increase periods, or reduction in salary levels. This is considered a criterion for evaluating the performance of managers according to Decree No. 97/2015/NĐ-CP dated January 19, 2015, of the Government on managing personnel holding positions in state-owned joint stock companies with 100% state capital contribution.

9. Encouraging the company to reasonably arrange and utilize labor, economize on labor to increase labor productivity and wages for employees.

Article 4. Salary scale, salary table, and salary allowances^[2]

1. Based on production organization, labor organization, the company establishes and promulgates the salary scale, salary table, and salary allowances as the basis for determining salaries, paying salaries, and implementing regulations for employees according to labor laws.

2. The levels of salary in the salary scale, salary table, and salary allowances are determined by the company, but must ensure that the salary fund calculated based on these salary levels does not exceed the planned salary fund for employees as stipulated in this Decree.

3. When establishing or amending the salary scale, salary table, and salary allowances, the company must seek opinions from employee representative organizations at the workplace, conduct dialogue sessions at the workplace as prescribed, report to the authority representing the owner for comments, and publicly announce within the company before implementation.

Article 5. Determining the planned salary fund

1. The planned salary fund is determined based on the planned number of workers and the average planned salary level as stipulated in Clause 2 of this Article.

2. The average planned salary level is determined based on the salary level in the labor contract, the actual average salary level achieved according to the business results of the previous year, and linked to the planned production and business targets of the company as follows:

a) For companies with profits, the average planned salary level is set higher than the average salary level in the labor contract, based on the actual average salary level achieved according to the business results of the previous year, linked to the increase/decrease in labor productivity (calculated as total revenue minus total costs excluding salaries or sales volume) compared to the previous year's plan, following the principle: if planned productivity and profit increase, the maximum salary increase shall not exceed the increase in productivity; if productivity increases but planned profit does not increase, the maximum salary increase shall not exceed 80% of the increase in productivity; if productivity increases but planned profit decreases, the maximum salary increase shall not exceed 50% of the increase in productivity; if productivity decreases, the salary shall decrease compared to the previous year's actual performance.

b) For companies without profit or loss (excluding objective cases stipulated in Clause 3 of this Article), the average planned salary level is set equal to the average salary level in the labor contract and the salary for holidays, festivals, paid leave days, and additional salary for night work and overtime work as prescribed by the Labor Code.

c) For companies reducing losses compared to the previous year's actual performance or newly established companies, the salary is determined based on the degree of reduced losses or the planned production and business targets, ensuring overall proportionality, and reporting to the authority representing the owner for review before making a decision.

3. When determining the planned salary fund, the company excludes objective factors affecting labor productivity and planned profit compared to the previous year's actual performance, including:

a)^[3] State adjustments to prices, production and business quotas (for products and services priced or production and business quotas regulated by the State), corporate income tax incentives, increases or decreases in state capital, requirements for the company to relocate or reduce production and business locations, policy and mechanism adjustments directly impacting the company's labor productivity and profit indicators, participation in implementing political tasks, national defense security, social welfare assurance, supply-demand balance for the economy as decided by the Prime Minister; implementing investment, receiving or transferring state capital ownership rights according to government directives or Prime Minister's instructions; receiving, purchasing, selling, writing off, deferring, and handling debts, assets, purchasing and selling products and services as required by competent state agencies or prescribed by law; implementing retroactive provisions as prescribed by the Government; increasing depreciation to recover capital quickly as prescribed by tax laws; adjusting business policies according to requirements of competent state agencies, Agreements, Treaties, or international organization regulations that Vietnam is a member; implementing restructuring plans, supplementing or divesting investment in other enterprises; new investments, expanding production and business operations; adjusting or newly generating financial risk reserves and credit risk reserves as prescribed by law; providing products and services priced by the state and price adjustment mechanisms but not fully adjusted to cover reasonable actual production and business costs when price formation factors change as prescribed by the Price Law; allocating costs for unsuccessful oil exploration and exploitation projects as prescribed by the Government; determining corporate income tax according to oil contracts for oil exploration, exploitation companies as prescribed by tax laws; recognizing purchase debt transactions, debt resolution not recorded in revenue and profit for debt purchase and sale companies as prescribed by law; fluctuations in revenue from securities market organization activities and securities custody business activities; differences in bonus payments compared to the previous year for lottery businesses; changes in mining environment and conditions for mining companies.

b)^[4] c) Natural disasters, fires, epidemics, wars, and other unforeseeable objective reasons.

4. When the company implements public goods products and services ordered by the State, assigned plans, or tendered contracts, the corresponding planned salary fund for the volume of public goods products and services is determined based on the volume of public goods products and services ordered by the State, assigned plans, or tender contracts.

4. When a company implements public goods products and services ordered by the State, assigned through plans, or awarded through bidding, the planned wage fund corresponding to the volume of public goods products and services shall be determined based on the volume of such products and services ordered by the State, assigned through plans, or pursuant to the bidding contract.

5. A state-owned production and business company that has production and business quotas leading to labor productivity not increasing or increasing less than the forecast consumer price index for the year as stipulated in the National Assembly's Resolution on the annual socio-economic development plan shall be entitled to a maximum average wage increase not exceeding the increase in the consumer price index.

6. In cases where a company adjusts its production and business plans, it must also adjust its average wage level and planned wage fund to ensure compliance with the conditions set forth in this Article.

7. Based on the production and business plan, the company determines the wage rate corresponding to the planned productivity target or unit product/service according to actual needs to manage production and business activities and advance wages to employees.

Article 6. Determination of Actual Wage Fund

1. The actual wage fund is determined based on the planned number of workers as stipulated in Clause 2, Article 3 of this Decree and the average wage level linked to the degree of completion of the labor productivity target and planned profit according to the principles set out in Clauses 2 and 3 of Article 5 of this Decree.

2. The company must assess the implementation of objective factors affecting actual labor productivity and profit compared to the plan to exclude them when determining the actual wage fund.

3. Based on the actual wage fund and the temporarily advanced wage fund for employees, the company determines the remaining wage fund to be enjoyed. If the temporarily advanced and paid amount exceeds the actual wage fund, it must be repaid from the next year's wage fund.

Article 7. Distribution of Wages

1. Based on the actual wage fund, the company may establish a reserve fund to supplement the wage fund of the following year. The company's reserve fund shall not exceed 17% of the actual wage fund. For companies engaged in seasonal production and business, the reserve fund shall not exceed 20% of the actual wage fund as stipulated in Clause 1 of Article 6 of this Decree.

2. The company establishes a wage payment regulation based on position and job title, ensuring fair remuneration (without a maximum limit) for individuals with talent, professional qualifications, and significant contributions to the company.

3. The company distributes wages to employees according to the company's wage payment regulations. The employee wage fund shall not be used to pay members of the Board of Members or the Chairman of the Company, Supervisors, General Directors, Directors, Deputy General Directors, Deputy Directors, Chief Accountants.

Article 8. Bonuses

1. Employee bonus funds are extracted from the company's award and welfare fund as prescribed by the Government.

2. Employee bonuses are implemented according to the company's bonus regulations.

Article 9. Implementation responsibilities

1. General Director, Director:

a) In the first quarter of each year, establish labor norms, labor plans, planned wage fund, and the previous year's actual wage fund, submit for approval by the Board of Members or the Chairman of the Company; decide on wage reserves after receiving opinions from the Company Trade Union Executive Committee.

b) Organize the establishment, determination, review of positions, job titles, work tasks, salary scales, allowances, salaries based on positions, job titles, work tasks, qualification standards, professional and vocational standards, salary adjustment regulations, wage payment regulations, bonus regulations as prescribed by law, ensuring democracy, transparency, and participation of the Company Trade Union Executive Committee before publicizing within the company.

c) Implement temporary wage advances and distribute wages and bonuses to employees according to the company's wage payment and bonus regulations.

d) Regularly report to the Board of Members or the Chairman of the Company on labor, wage, and bonus situations; provide complete reports, documents, and data on labor, wages, and bonuses to the Head of the Supervisory Board or Supervisor upon request.

2. Board of Members or Chairman of the Company:

a) In the first quarter of each year, report to the owner's representative body for comments on the labor plan; approve the production and business plan, labor norms, labor plans, planned wage fund, and the previous year's actual wage fund.

b) Report to the owner's representative body and simultaneously send the Supervisor the labor norms, labor plans, planned wage fund, and the previous year's actual wage fund for inspection and supervision within ten days from the date of approval.

For the parent company of State-owned Economic Groups, the parent company of Special-Class Joint Stock Companies, and Joint Stock Companies performing important public service functions, the reports on labor and wages at points a and b of Clause 2 of this Article shall be simultaneously sent to the Ministry of Labor, Invalids, and Social Affairs for monitoring and supervision.

c) Improve the organizational structure and personnel responsible for labor and wage management in the company to implement the labor and wage management contents as prescribed in this Decree.

d) Publicize the total number of workers, wage fund, bonus fund, average wage, and the previous year's average income of employees on the company's website in accordance with the law, and report to the owner's representative body.

3. Head of the Supervisory Board, Supervisor:

a) Inspect, supervise, and regularly report to the owner's representative body on the implementation by the Board of Members or the Chairman of the Company, General Director, and Director as prescribed in this Decree. If non-compliance is found, they should propose corrective measures to the Board of Members or the Chairman of the Company. If the proposal is not implemented, they should report to the owner's representative body for timely handling.

b) Within fifteen days of receiving the report from the Board of Members or the Chairman of the Company, conduct a review and verification of the determination of the actual wage fund to report to the owner's representative body and bear responsibility for the accuracy and truthfulness of the verification report.

4. Owner's Representative Body:

a) Receive reports from the Board of Members or the Chairman of the company, the Inspector regarding labor standards, labor plans, planned salary funds, actual salary funds of the previous year, and objective factors affecting labor productivity and profits (if any) for review, inspection, and supervision.

In case of discovering contents that do not comply with regulations, within thirty days from the date of receiving the report, issue a document requesting the Board of Members or the Chairman of the company to supplement or adjust the information. At the same time, depending on the level of violation, decide on disciplinary measures such as no salary increase, extending the salary grade promotion period, reducing salary, bonuses, remuneration, demoting salary grades, reprimand, warning, dismissal, or termination of employment for the Chairman of the Board of Members or the Chairman of the company according to the provisions of the law.

b) Chair and coordinate with the Ministry of Labor, Invalids, and Social Affairs to inspect and supervise salaries of state-owned enterprise parent companies, parent companies of special-class State-owned corporations, and State-owned corporations performing public service roles that are crucial to the economy.

c) Regularly organize inspections and supervisions annually and be responsible before the Government and the Prime Minister for the implementation of labor policies and salaries of companies under their ownership.

d) By no later than May each year, compile and send the Ministry of Labor, Invalids, and Social Affairs the situation of labor, salaries, and bonuses of the previous year and the construction of salary plans and salary funds for the planning year of companies under their management.

5. The Ministry of Labor, Invalids, and Social Affairs:

a) Chair and coordinate with relevant ministries to guide the implementation of labor management, salaries, and bonuses as stipulated in this Decree.

b) Coordinate with the agency representing the owner to supervise labor and salaries of state-owned enterprise parent companies, parent companies of special-class State-owned corporations, and State-owned corporations performing public service roles that are crucial to the economy.

c) Organize audits and inspections of the implementation of labor policies, salaries, and bonuses of companies. In case of discovering incorrect determination of salary funds, provide comments for the agency representing the owner to instruct the company to adjust or recalculate according to regulations.

d) Compile the situation of salaries and bonuses of companies and regularly report to the Prime Minister.

Article 10. Effective Date^[5]

1. This Decree takes effect from August 1, 2016. The provisions of this Decree shall be implemented from January 1, 2016.

2. This Decree replaces Decree No. 50/2013/NĐ-CP dated May 14, 2013, of the Government on the management of labor, salaries, and bonuses for employees working in state-owned limited liability companies.

3. The Military Telecommunications Corporation continues to apply pilot management of salaries for employees according to the regulations of the Government.

4. For General Directors, Directors, Deputy General Directors, Deputy Directors, and Chief Accountants working under labor contracts in state-owned limited liability companies holding 100% of the charter capital, salaries and bonuses shall be implemented based on agreed principles, separated from the employee salary and bonus fund, and recorded as business expenses of the company.

5. The Board of Members or the Chairman of the parent company at Article 1 of this Decree shall organize the management of labor, salaries, and bonuses for employees working in companies held 100% of the charter capital by the parent company based on the content of labor management, salaries, and bonuses stipulated in this Decree.

6. For organizations established and operating under the model of state-owned limited liability companies holding 100% of the charter capital according to the Securities Law, Law on Credit Institutions, Deposit Insurance Law, non-budgetary state financial funds, and state asset management organizations currently applying the salary mechanism of state-owned limited liability companies holding 100% of the charter capital, the Ministry of Labor, Invalids, and Social Affairs shall guide labor management, determine salaries linked to labor productivity and operational efficiency suitable to the specific characteristics of these organizations, after reaching consensus with relevant ministries.

7. Political organizations and political-social organizations shall consider and decide on the application of the provisions of this Decree for employees working in companies held 100% of the charter capital by political organizations and political-social organizations.

8. Ministers, heads of ministerial-level agencies, heads of government-affiliated agencies, Chairmen of provincial People's Committees, centrally governed cities, the Board of Members or the Chairman of state-owned limited liability companies holding 100% of the charter capital are responsible for implementing this Decree./.

^{_____________________________}

^[1] Decision No. 21/2024/NĐ-CP dated February 23, 2024 of the Government amending and supplementing some articles of Decree No. 51/2016/NĐ-CP dated June 13, 2016 of the Government on the management of labor, salaries, and bonuses for employees working in state-owned limited liability companies holding 100% of the charter capital and Decree No. 52/2016/NĐ-CP dated June 13, 2016 of the Government on salaries, remuneration, and bonuses for managers of state-owned limited liability companies holding 100% of the charter capital (hereinafter referred to as Decree No. 21/2024/NĐ-CP), effective from April 10, 2024, is based on the following grounds:

"Pursuant to the Law on Organization of the Government dated June 19, 2015; the Law Amending and Supplementing Certain Articles of the Law on Organization of the Government and the Law on Organization of Local Administration dated November 22, 2019;

Pursuant to the Labor Code on November 20, 2019;

Pursuant to the Law on Enterprises dated June 17, 2020;

Law on Management and Use of State Capital for Investment in Production and Business Activities of Enterprises dated November 26, 2014;

Decree No. 07/2021/NĐ-CP

The Government issues a Decree amending and supplementing some Articles of Decree No. 51/2016/NĐ-CP dated June 13, 2016, of the Government on labor management, salary, and bonuses for employees working in state-owned joint stock companies with 100% state capital, and Decree No. 52/2016/NĐ-CP dated June 13, 2016, of the Government on salaries, remuneration, and bonuses for managers of state-owned joint stock companies with 100% state capital.

^[2] This is amended according to Clause 1, Article 1 of Decree No. 21/2024/NĐ-CP, which takes effect from April 10, 2024.

^[3] This point is amended and supplemented according to Clause 2, Article 1 of Decree No. 21/2024/NĐ-CP, which takes effect from April 10, 2024.

^[4] This point is amended and supplemented according to Clause 2, Article 1 of Decree No. 21/2024/NĐ-CP, which takes effect from April 10, 2024.

^[5] Articles 3 and 4 of Decree No. 21/2024/NĐ-CP take effect from April 10, 2024, and are stipulated as follows:

“Article 3. Effectiveness

1. This Decree takes effect from April 10, 2024.

2. The regimes regarding the salary fund, payment of salaries, remuneration, and bonuses stipulated in Clause 2, Article 1, Clauses 3, 4, 6, 7, and 10, Article 2 of this Decree shall be implemented from January 1, 2024.

Article 4. Responsibilities for Implementation

1. The Ministry of Labor - Invalids and Social Affairs shall take the lead and coordinate with relevant ministries to guide the implementation of the provisions of this Decree.

2. State financial funds outside the budget that are currently applying the salary mechanism under Clause 6, Article 10 of Decree No. 52/2016/NĐ-CP shall continue to apply a maximum additional salary coefficient not exceeding 1.0 times the basic salary level to determine the salary of managers and Supervisors of the fund.

3. For securities trading departments, the Vietnam Securities Depository and Central Counterparty Corporation, when there are objective factors specified in Point b, Clause 2, Article 1 of this Decree; Point b and Point c, Clause 2, Article 6 of Decree No. 59/2021/NĐ-CP dated June 18, 2021, of the Government on certain special contents regarding financial management mechanisms and performance evaluation for the Vietnam Securities Exchange and the Vietnam Securities Depository and Central Counterparty Corporation, causing revenue fluctuations of more than 7% increase or more than 3% decrease, then the portion of revenue increase over 7% (in the case of revenue increasing by more than 7%) or the portion of revenue decrease over 3% (in the case of revenue decreasing by more than 3%) must be excluded from the revenue index used as the basis for determining labor productivity, profit linked to employee salaries, managers, and Supervisors.

4. For organizations stipulated in Clause 6, Article 10 of Decree No. 51/2016/NĐ-CP, Clause 6, Article 10 of Decree No. 52/2016/NĐ-CP, and the Vietnam Social Policy Bank, the Ministry of Labor - Invalids and Social Affairs shall guide labor management, salaries, remuneration, and bonuses according to the salary mechanism prescribed by the Government in Decree No. 51/2016/NĐ-CP, Decree No. 52/2016/NĐ-CP, and this Decree, linked to labor productivity, operational efficiency, and suitable to the specific nature of these organizations, including entrusting the Ministry of Labor - Invalids and Social Affairs to annually receive, review, inspect, and supervise reports on labor plans and employee salary funds; receive, consider, and approve salary funds, remuneration, and bonuses for managers and Supervisors of the Vietnam Social Policy Bank after consulting with the Ministry of Finance and the State Bank of Vietnam.

5. Entrust the Ministry of Labor - Invalids and Social Affairs to manage salaries for the Vietnam Television Station based on the salary mechanism prescribed in Decree No. 51/2016/NĐ-CP and this Decree, linked to labor productivity and operational efficiency, and suitable to the specific nature of the station, according to the provisions of Clause 9, Article 2 of Decree No. 60/2022/NĐ-CP dated September 8, 2022, of the Government on the functions, tasks, powers, and organizational structure of the Vietnam Television Station and related laws. of managing salaries for the Vietnam Television Station according to the salary mechanism prescribed in Decree No. 51/2016/NĐ-CP and this Decree, linked to labor productivity and operational efficiency, and suitable to the specific nature of the Station.