Decree No. 51/2016/ND-CP on management of labor, wages, and bonuses for employees working in state-owned joint stock companies with 100% state capital.

DECREE

REGULATING LABOR MANAGEMENT, WAGES AND BONUSES FOR

WORKERS EMPLOYED IN JOINT STOCK COMPANIES WITH SOLE SHAREHOLDER

OWNED BY THE STATE WITH 100% CAPITAL CONTRIBUTION

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

Pursuant to the Maritime Code of Vietnam LABOR DAY JUNE 18, 2012;

Pursuant to the Enterprise Law dated November 26, 2014;

BASED ON THE LAW ON MANAGEMENT AND USE OF STATE CAPITAL INVESTED IN PRODUCTION AND BUSINESS OPERATIONS AT ENTERPRISES ON NOVEMBER 26AND year 2014;

At the request of the Minister of Labor, War Invalids and Social Affairs,SOCIAL AFFAIRS; ISSUING A DECREE REGULATING LABOR MANAGEMENT, WAGES AND BONUSES FOR WORKERS EMPLOYED IN JOINT STOCK COMPANIES WITH SOLE SHAREHOLDER OWNED BY THE STATE WITH 100% CAPITAL CONTRIBUTION.

At the proposal of 1. JOINT STOCK COMPANY WITH SOLE SHAREHOLDER OWNED BY THE STATE WITH 100% CAPITAL CONTRIBUTION IS THE PARENT COMPANY OF THE STATE ECONOMIC GROUP, THE PARENT COMPANY OF THE STATE CORPORATION, THE PARENT COMPANY IN THE GROUP OF PARENT COMPANIES - SUBSIDIARIES.ZrO2. JOINT STOCK COMPANY WITH SOLE SHAREHOLDER OWNED BY THE STATE WITH 100% CAPITAL CONTRIBUTION IS AN INDEPENDENT ENTITY. JOINT STOCK COMPANY WITH SOLE SHAREHOLDER OWNED BY THE STATE WITH 100% CAPITAL CONTRIBUTION AS PROVIDED FOR IN CLAUSE 1 AND CLAUSE 2 OF THIS ARTICLE HEREINAFTER SHALL BE REFERRED TO AS THE COMPANY.3. MINISTRIES, GOVERNMENT-LEVEL ORGANIZATIONS, LOCAL GOVERNMENTS AT PROVINCE LEVEL OR DIRECTLY UNDER THE CENTRAL GOVERNMENT, OR ORGANIZATIONS ESTABLISHED IN ACCORDANCE WITH THE LAWS AND ASSIGNED BY THE GOVERNMENT TO PERFORM THE RIGHTS AND RESPONSIBILITIES OF THE STATE OWNER REPRESENTATIVE TOWARDS THE COMPANY (HEREINAFTER REFERRED TO AS THE STATE OWNER REPRESENTATIVE).

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:

2. THE LABOR PLAN IS DEVELOPED BASED ON THE PRODUCTION AND BUSINESS PLAN, THE ORGANIZATIONAL STRUCTURE, RESTRUCTURING LABOR EFFICIENTLY (ESPECIALLY THE REVIEW OF MANAGEMENT HEADQUARTERS, RESTRUCTURING TO REDUCE INDIRECT LABOR) AND LABOR STANDARDS OF THE COMPANY.

3. THE TOTAL NUMBER OF LABOR IN THE ANNUAL LABOR PLAN UNDER NORMAL PRODUCTION AND BUSINESS CONDITIONS MUST NOT EXCEED 5% COMPARED TO THE AVERAGE ACTUAL LABOR USED IN THE PREVIOUS YEAR (AFTER REORGANIZATION AND RESTRUCTURING ACCORDING TO CLAUSE 2 OF THIS ARTICLE).

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.

4. THE ANNUAL LABOR PLAN IS DEVELOPED BY THE GENERAL MANAGER OR DIRECTOR AND SUBMITTED FOR APPROVAL BY THE BOARD OF MEMBERS OR THE CHAIRMAN OF THE COMPANY. THE CHAIRMAN OF THE BOARD OF MEMBERS OR THE CHAIRMAN OF THE COMPANY, THE GENERAL MANAGER, AND THE DIRECTOR ARE RESPONSIBLE FOR THE LABOR PLAN OF THE COMPANY.

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.

5. THE CHAIRMAN OF THE BOARD OF MEMBERS OR THE CHAIRMAN OF THE COMPANY MUST REPORT TO THE STATE OWNER REPRESENTATIVE FOR COMMENT BEFORE APPROVING THE LABOR PLAN. THE STATE OWNER REPRESENTATIVE HAS THE RESPONSIBILITY TO REVIEW AND COMMENT ON THE LABOR PLAN OF THE COMPANY. FOR THE PARENT COMPANY OF THE STATE ECONOMIC GROUP, THE PARENT COMPANY OF THE SPECIAL CLASS STATE CORPORATION, AND THE STATE CORPORATION PERFORMING PUBLIC SERVICE TASKS WITH A CRUCIAL ROLE IN THE ECONOMY, THEY MUST SIMULTANEOUSLY SEND THE LABOR PLAN TO THE MINISTRY OF LABOR, WAR INVALIDS AND SOCIAL AFFAIRS FOR COMBINED MONITORING.

6. BASED ON THE LABOR PLAN, THE GENERAL MANAGER OR DIRECTOR ORGANIZES THE RECRUITMENT, ALLOCATION, AND USE OF LABOR, ENSURING TRANSPARENCY IN ACCORDANCE WITH THE LEGAL REGULATIONS AND THE LABOR RECRUITMENT AND USE POLICY, THE CHARTER OF THE COMPANY.

7. ANNUALLY, THE BOARD OF MEMBERS OR THE CHAIRMAN OF THE COMPANY DIRECTS THE GENERAL MANAGER OR DIRECTOR TO EVALUATE THE IMPLEMENTATION OF THE LABOR USE PLAN, DETERMINE RESPONSIBILITY IN RECRUITMENT AND USE OF LABOR; FULLY SETTLE ALL BENEFITS AND RIGHTS FOR WORKERS WHOSE LABOR CONTRACTS ARE TERMINATED.

8. IN CASE OF RECRUITMENT EXCEEDING THE PLAN OR NOT IN ACCORDANCE WITH THE PLAN, LEADING TO UNEMPLOYMENT OF WORKERS, THE GENERAL MANAGER OR DIRECTOR MUST BE RESPONSIBLE BEFORE THE BOARD OF MEMBERS OR THE CHAIRMAN OF THE COMPANY, THE BOARD OF MEMBERS OR THE CHAIRMAN OF THE COMPANY MUST BE RESPONSIBLE BEFORE THE STATE OWNER REPRESENTATIVE AND SHALL NOT RECEIVE BONUSES, SALARY INCREASES, EXTENSION OF SALARY RISE PERIOD, OR DECREASE IN SALARY AMOUNT. THIS IS CONSIDERED AS A CONTENT FOR EVALUATING THE PERFORMANCE OF MANAGEMENT ACCORDING TO THE DECREE NO. 97/2015/NĐ-CP OF OCTOBER 19, 2015 OF THE GOVERNMENT ON MANAGEMENT OF PERSONNEL HOLDING POSITIONS IN JOINT STOCK COMPANIES WITH SOLE SHAREHOLDER OWNED BY THE STATE WITH 100% CAPITAL CONTRIBUTION.

9. ENCOURAGE COMPANIES TO REASONABLY ALLOCATE AND USE LABOR, SAVE LABOR TO INCREASE LABOR PRODUCTIVITY AND INCREASE WAGES FOR WORKERS.

THE COMPANY DEVELOPS AND ISSUES THE PAY SCALE, PAY TABLE, AND ALLOWANCES ACCORDING TO THE DECREE NO. 49/2013/NĐ-CP OF MAY 14, 2013 OF THE GOVERNMENT PROVIDING DETAILS ON SOME PROVISIONS OF THE LABOR CODE REGARDING WAGES AS THE BASIS FOR GRADING AND PAYING WAGES AND IMPLEMENTING REGULATIONS FOR WORKERS IN ACCORDANCE WITH LABOR LAWS.

1. THE PLANNED WAGE FUND IS DETERMINED BASED ON THE PLANNED NUMBER OF LABOR AND THE AVERAGE PLANNED WAGE LEVEL AS PROVIDED FOR IN CLAUSE 2 OF THIS ARTICLE.

2. THE AVERAGE PLANNED WAGE LEVEL IS DETERMINED BASED ON THE WAGE LEVEL IN THE LABOR CONTRACT, THE AVERAGE WAGE LEVEL IMPLEMENTED ACCORDING TO THE PRODUCTION AND BUSINESS RESULTS OF THE PREVIOUS YEAR AND LINKED TO THE PLANNED PRODUCTION AND BUSINESS INDICATORS OF THE COMPANY AS FOLLOWS:

a) FOR COMPANIES WITH PROFITS, THE AVERAGE PLANNED WAGE LEVEL IS DETERMINED TO BE HIGHER THAN THE AVERAGE WAGE LEVEL IN THE LABOR CONTRACT, BASED ON THE AVERAGE WAGE LEVEL IMPLEMENTED ACCORDING TO THE PRODUCTION AND BUSINESS RESULTS OF THE PREVIOUS YEAR AND LINKED TO THE PLANNED INCREASE/DECREASE IN LABOR PRODUCTIVITY (CALCULATED AS TOTAL REVENUE MINUS TOTAL COSTS EXCLUDING WAGES OR OUTPUT SOLD) COMPARED TO THE IMPLEMENTATION OF THE PREVIOUS YEAR ACCORDING TO THE PRINCIPLE: IF PLANNED LABOR PRODUCTIVITY AND PROFIT INCREASE, WAGES CAN INCREASE UP TO THE MAXIMUM LEVEL OF THE INCREASE IN LABOR PRODUCTIVITY; IF LABOR PRODUCTIVITY INCREASES BUT PLANNED PROFIT DOES NOT INCREASE, WAGES CAN INCREASE UP TO 80% OF THE INCREASE IN LABOR PRODUCTIVITY; IF LABOR PRODUCTIVITY INCREASES BUT PLANNED PROFIT DECREASES, WAGES CAN INCREASE UP TO 50% OF THE INCREASE IN LABOR PRODUCTIVITY; IF LABOR PRODUCTIVITY DECREASES, WAGES WILL DECREASE COMPARED TO THE IMPLEMENTATION OF THE PREVIOUS YEAR.

Article 5. Determining the planned salary fund

b) FOR COMPANIES WITHOUT PROFITS OR LOSSES (EXCEPT FOR OBJECTIVE CASES PROVIDED FOR IN CLAUSE 3 OF THIS ARTICLE), THE AVERAGE PLANNED WAGE LEVEL IS DETERMINED TO BE THE SAME AS THE AVERAGE WAGE LEVEL IN THE LABOR CONTRACT AND WAGES FOR NATIONAL HOLIDAYS, WAGES FOR DAYS OFF WITH PAY, OVERTIME WAGES FOR NIGHT WORK, AND OVERTIME WAGES ACCORDING TO THE LABOR CODE.

2. The average planned wage level shall be determined based on the wage level stipulated in the labor contract, the average actual wage level achieved according to the production and business results of the immediately preceding year, and linked to the planned production and business targets of the company as follows:

a) For companies with profits, the average planned wage level shall be higher than the average wage level stipulated in the labor contract, based on the average actual wage level achieved according to the production and business results of the immediately preceding year, linked to the increase/decrease in labor productivity (calculated as total revenue minus total expenses excluding wages or sales volume) planned compared to the actual performance of the immediately preceding year, following the principle: if planned labor productivity and profit increase, the maximum wage increase shall not exceed the increase in labor productivity; if labor productivity increases but planned profit does not increase, the maximum wage increase shall not exceed 80% of the increase in labor productivity; if labor productivity increases but planned profit decreases, the maximum wage increase shall not exceed 50% of the increase in labor productivity; if labor productivity decreases, the wage shall decrease compared to the actual performance of the immediately preceding year.

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

c) For companies that have reduced losses compared to the previous year or newly established companies, the basis for determining salaries shall be based on the degree of loss reduction or production and business plans, ensuring general proportionality, and reporting to the representative body of 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:

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. Companies implementing public goods products and services ordered by the State, assigned plans, or awarded contracts shall determine the planned salary fund corresponding to the volume of public goods products and services based on the volume of public goods products and services ordered by the State, assigned plans, or contract agreements.

5. Companies producing and trading products and services with production and trading limits set by the State, leading to labor productivity not increasing or increasing at a lower rate than the forecast consumer price index for the year according to the Resolution of the National Assembly on the Annual Socio-Economic Development Plan, shall be entitled to an average salary increase not exceeding the increase in the consumer price index.

6. In cases where companies adjust their production and business plans, they must also adjust the average salary level and planned salary fund to ensure compliance with the provisions of this Article.

7. Based on the production and business plan, companies determine the unit salary rate corresponding to the planned production and business targets or units of products and services to manage production and business activities and temporarily advance salaries to employees according to actual needs.

Article 6. Determination of Actual Wage Fund

1. The realized salary fund is determined based on the planned number of workers in accordance with Clause 2 of Article 3 of this Decree and the average planned salary level linked to the degree of completion of labor productivity and profit targets as stipulated 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 realized salary fund and the temporarily advanced salary fund for employees, the company determines the remaining salary fund to be enjoyed. If the temporarily advanced and spent amount exceeds the realized salary fund, it must be repaid from the salary fund of the following year.

Article 7. Distribution of Wages

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

2. Companies establish salary regulations based on job positions and titles, ensuring appropriate remuneration (without a maximum limit) for individuals with talent, professional qualifications, technical skills, and significant contributions to the company.

3. Companies distribute salaries to employees according to the company's salary regulations. The employee salary 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 salary funds, and the realized salary fund of the previous year, submit for approval by the Board of Members or the Chairman of the Company; decide on salary reserves after obtaining the opinion of the Company Trade Union Executive Committee.

b) Organize the establishment, determination, review of job positions, titles, work, wage scales, wage tables, allowances, wages based on job positions, titles, work, position standards, work, specialization, vocational training, wage adjustment regulations, wage payment regulations, bonus regulations in accordance with the law, ensuring democracy, transparency, and participation of the Company Trade Union Executive Committee and publicizing within the company before implementation.

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 conditions, wages, bonuses; provide complete reports, documents, data on labor, wages, bonuses as required by the Head of the Supervisory Board, Supervisors.

2. Board of Members or Chairman of the Company:

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

b) Report to the representative body of the owner and simultaneously send to the Supervisor the labor norms, labor plans, planned salary fund, and realized salary fund of the previous year no later than ten days after approval for verification and supervision. For parent companies of state-owned economic groups, parent companies of special-class joint-stock corporations, and joint-stock corporations performing important public service functions, reports on labor and wages under 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, salary fund, bonuses, average salary, and average annual income of the previous year for employees on the company's electronic information website in accordance with the law, and report to the representative body of the owner.

3. Head of the Supervisory Board, Supervisor:

a) Monitor, supervise, and regularly report to the representative body of the owner on the implementation by the Board of Members or the Chairman of the Company, General Director, and Director in accordance with this Decree. If non-compliance is discovered, request the Board of Members or the Chairman of the Company to instruct corrections and adjustments. If the request is not implemented, report to the representative body of the owner for timely handling.

b) Within fifteen days from receiving the report of the Board of Members or the Chairman of the Company, conduct a review and verification of the determination of the realized salary fund to report to the representative body of the owner 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 quotas, labor plans, planned salary funds, actual salary funds of the previous year, and objective factors affecting labor productivity and profits (if any) to review, inspect, and supervise.

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 accordingly. At the same time, depending on the level of violation, decide on disciplinary measures such as not increasing salaries, extending the period for salary grade promotion, deducting salary, bonuses, remuneration, demoting salary grades, reprimanding, warning, dismissing, or compelling resignation of 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 economic group parent companies, parent companies of special-class state-owned corporations, and state-owned corporations performing public service tasks that play a significant role in the economy.

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

d) By the latest in May each year, compile and send the Ministry of Labor, Invalids, and Social Affairs the situation of labor, salaries, and bonuses of the immediately preceding year and the construction of salary plans, salary funds of the planning year for 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 representative body of the owner to supervise labor and salaries of state-owned economic group parent companies, parent companies of special-class state-owned corporations, and state-owned corporations performing public service tasks that play a significant role in the economy.

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 opinions for the representative body of the owner to instruct the company to adjust or settle according to regulations.

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

Article 10. Effective Date

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 stipulating the management of labor, salaries, and bonuses for employees working in limited liability companies with one member owned by the State.

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, Chief Accountants working under employment contracts in limited liability companies with one member owned by the State holding 100% of the charter capital, salaries and bonuses shall be implemented based on the principle of agreement, separate from the salary and bonus fund of employees 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, based on the content of labor, salary, and bonus management stipulated in this Decree, organize the management of labor, salaries, and bonuses for employees working in companies where the parent company holds 100% of the charter capital.

6. For organizations established and operating under the model of limited liability companies with one member owned by the State holding 100% of the charter capital as prescribed by the Securities Law, the Law on Credit Institutions, the Law on Deposit Insurance, financial funds outside the budget of the State, and organizations handling the purchase and sale of debts of the State currently applying the salary mechanism of limited liability companies with one member owned by the State holding 100% of the charter capital, based on the principles stipulated in this Decree, the Ministry of Labor, Invalids, and Social Affairs will guide the management of labor, determine salaries linked to labor productivity and operational efficiency suitable for the specific nature of these organizations, after reaching consensus with relevant ministries and sectors.

7. Political organizations and political-social organizations 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. The Ministers, Heads of ministerial-level agencies, Heads of government-affiliated agencies, Chairmen of provincial and centrally-administered city People's Committees, the Board of Members or the Chairman of limited liability companies with one member owned by the State holding 100% of the charter capital are responsible for implementing this Decree./.