CIRCULAR

Guidelines for the allocation of union funds

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Implementing the Trade Union Law issued pursuant to Decree No. 108-SL/L10 dated November 5, 1957, the Ministry of Finance has issued Circulars No. 07-HCP dated April 3, 1959, No. 76-TC/HCVX dated April 16, 1970, No. 13-TC/HCVX dated April 1, 1975, and Circular No. 87-TC/HCVX dated December 2, 1975 guiding the submission of trade union funds, which have created conditions for the trade unions to manage their funds centrally and uniformly, serving promptly the various activities of trade unions at all levels.

Since the implementation of the economic and financial management decentralization system at the district level, some localities have not complied with the regulations, with some places submitting late, insufficiently, or incorrectly to the wage fund, affecting the financial management work of the trade unions.

Implementing Decision No. 219-CP dated May 29, 1981 of the Council of Ministers on temporary wage supplements for state workers and officials, while awaiting research on proposals to supplement the submission of trade union funds under new circumstances, after reaching consensus with the Vietnam General Confederation of Labor, the Ministry of Finance guides the uniform allocation of trade union funds nationwide as follows:

I - BASIS FOR CALCULATING THE UNION FUND AMOUNT:

According to Article 19 of Chapter III of Decree No. 188-TTg dated September 9, 1958, the trade union fund is set at 2% of the total wages paid to all workers and officials, regardless of whether they are within or outside the establishment.

Circular No. 186-TTg dated July 2, 1971, the Prime Minister stipulated that "the State sets aside 2% of the wage fund to ensure the expenditure needs of the trade union system, including expenditures for mass cultural activities, sports... Based on the planned wage fund, the State budget directly transfers this amount into the trade union fund."

To implement the above regulations accurately when calculating the trade union fund, it is necessary to ensure the correct calculation of the total wage fund.

According to the Government's regulations, the wage fund includes:

1- Wages in the production sector (including monthly and daily wages based on established salary scales and wage tables issued by the State, and piecework wages).

2- Wages of workers and officials in the public service and administrative sectors.

3- Daily wages paid to auxiliary workers.

4- Wages paid to workers and officials during periods of involuntary downtime due to external factors (lack of raw materials, power sources, etc.). The wages of workers and officials during periods of study leave or performing public duties also belong to the total wage fund.

5- Allowances specified to be included in the total wage fund.

Implementing Decision No. 219-CP dated May 29, 1981 of the Council of Ministers on temporary wage supplements for state workers and officials, in Circular No. 07-LD/TT dated June 1, 1981 of the Ministry of Labor, it was stipulated that the temporary allowance should also be included in the wage fund, so when calculating the trade union fund, it is necessary to include this temporary allowance in the total wage fund.

II - REGIME FOR ALLOCATING UNION FUNDS:

According to the regulations, the trade union fund is transferred directly from the State budget into the trade union fund.
To align with the organizational structure and functions of the Vietnam General Confederation of Labor and trade unions at all levels, the method of transferring the trade union fund is defined as follows:

1- For the portion to be submitted according to the planned wage fund of enterprises, industrial, agricultural, forestry, and other organizations under central management will be transferred quarterly by the Ministry of Finance from the central budget to the Vietnam General Confederation of Labor.

2- In provinces and cities, quarterly, based on the total planned wage fund, the provincial and city finance departments must ensure the allocation from the provincial or city budget to submit the trade union fund to enterprises, industrial, agricultural, forestry, and other organizations under provincial management.

3- For districts, given the initial implementation of financial management decentralization and the fact that the trade union system is not yet consolidated in many places, localities need to consider specific circumstances to address the submission of the trade union fund as follows:

a) In districts where there is a trade union system, the submission of the trade union fund for organizations and units under district management will be covered by the district budget. The district finance department must ensure the correct submission of the trade union fund according to policy and regulations.

b) In districts where the trade union system is not established or is not capable of managing the trade union fund, the districts need to request the Provincial People's Committee to decide temporarily to cover the trade union fund for the district from the provincial budget. Therefore, the submission of the trade union fund for these types of districts will be implemented by the provincial finance departments.

4- For political parties and mass organizations, associations... the submission of the trade union fund will only apply to those organizations that have established trade unions. As the wage fund of political parties, mass organizations, and associations does not fall within the State's planned wage fund, the submission of the trade union fund will be guided by the Vietnam General Confederation of Labor.

5- For joint ventures that have not implemented the monthly wage system and wage tables of the State, the wage fund of these enterprises is not reflected in the State's overall planned wage fund, then the submission of the trade union fund will be carried out by the enterprise directors according to the guidelines of the Vietnam General Confederation of Labor.

6- For newly formed production bases (if any) where the wage fund is calculated separately and not included in the total planned wage fund, the director or person responsible for organizing production will carry out the submission of the trade union fund according to the guidelines of the Vietnam General Confederation of Labor.

III - EXPENDITURE OF THE TRADE UNION FUND:

According to the regulations of the General Confederation of Labor, the trade union fund is used for the following needs:

1- Expenditure on the dedicated machinery for trade union work (salaries and allowances, expenses for trade union activities such as purchasing furniture, equipment, repairing buildings, offices...).

2- Allocate for cultural, sports, and artistic activities and the life of workers and officials organized by trade unions such as: propaganda and education among workers and officials, mass culture, physical training and sports, supplementary education programs for workers and officials, encouragement of labor competition movements, training and development of trade union cadres; inspection work of workers; labor protection work; women's work,慰问、奖励工会会员和工会干部。

3- Allocate for the trade union cadre training school.

4- Allocate for international activities of the trade union.

5- Other expenditures within the functions and responsibilities of the trade union.

The General Confederation has provided specific guidelines for all levels of trade unions.

IV. ESTABLISHING BUDGETS, DISTRIBUTION AND SETTLEMENT OF TRADE UNION FUNDS:

a) The establishment of revenue and expenditure budgets shall be carried out according to the following procedures:

At the district level:

Annually, based on the guidance of the General Confederation and the Ministry of Finance, district and urban area trade unions shall establish the trade union budget based on the total number of workers and officials under their management, and the wage fund plan determined by the local State Planning Commission. At the same time, based on the tasks of the planned year, they shall establish the expenditure budget of the district and urban area trade unions.

The revenue and expenditure budgets of district and urban area trade unions shall be submitted to the District and Urban Area Price and Finance Committees and the Provincial and Municipal Federation of Trade Unions.

After reviewing, the District and Urban Area Price and Finance Committees shall record in the district and urban area budget the amount of trade union funds to be paid according to the approved total wage fund plan.

At the provincial level:: Provincial and Municipal Federations of Trade Unions

- Based on the staffing standards for workers and officials and the wage fund plan of the province managed by the local State Planning Commission, establish a 2% provincial trade union budget and an expenditure budget according to the tasks of the Provincial Federation of Trade Unions.

- Aggregate the revenue and expenditure budgets of districts and urban areas together with its own provincial budget, and submit it as a revenue and expenditure project of the Provincial Federation of Trade Unions to the provincial financial departments and the General Confederation of Vietnam.

- After receiving the revenue and expenditure projects of the Provincial Federation of Trade Unions, the provincial financial departments shall base on their own total wage fund plans, forecast the portion of trade union funds to be paid by the province and aggregate it into the provincial budget project for trade union funds (including both the portion to be paid by the province and the portion to be paid by the districts) to report to the Ministry of Finance when approving the annual state budget.

At the central level:- The General Confederation of Vietnam is responsible for:

- Based on the situation of cadres, workers, and officials and the central-level wage plan, prepare the revenue and expenditure budget and submit it to the Ministry of Finance.

- Aggregate the revenue and expenditure budget of the national trade union fund (including the portion of the General Confederation Office and the local federations) and submit it as a revenue and expenditure project of the trade union fund to the Ministry of Finance.

After summarizing, the Ministry of Finance will present to the Government for approval of the total trade union fund when the Council of Ministers approves the state budget annually.

b) Regarding the distribution of trade union funds - To ensure that all levels of trade unions have conditions for operation, trade union funds are distributed quarterly. Within the first 15 days of each quarter, financial agencies must ensure that the trade union funds of their level are deposited into the account of the General Confederation at the Central Bank, Provincial Bank, City Bank, and County Bank.

If there are difficulties with the budget, the financial agency must negotiate with the trade union agency to distribute in two or three installments.

At the beginning of the year, if the total wage fund has not been officially approved, financial agencies temporarily base on the previous year's wage fund to pre-distribute the trade union funds and adjust them once the total wage fund is officially approved.

c) /Regarding the settlement of trade union funds - At the end of the year, district and urban area trade unions, provincial and municipal federations of trade unions shall prepare reports on revenue and expenditure settlements and submit them to the General Confederation while sending one copy to the same-level financial agency (District and Urban Area Price and Finance Committees; Provincial and Municipal Financial Departments), the State Planning Commission, and the local statistics bureau for these agencies to aggregate into the local consumption fund and report upwards.

The General Confederation of Vietnam aggregates and prepares the revenue and expenditure settlement report to submit to the Ministry of Finance, the State Planning Commission, and the General Statistics Bureau for inclusion in the social consumption fund in the state budget and report to the Council of Ministers.

After receiving the settlement report from the General Confederation and various levels of trade unions, financial agencies need to recalculate the trade union funds. If the payment of trade union funds is insufficient, the budget must make up the difference; conversely, if there is an overpayment, it will be deducted from the payment for the next year.

This Circular takes effect from January 1, 1982./.