Thông tư 28/2016/TT-BLDTBXH

CIRCULAR

PROVIDING GUIDANCE ON IMPLEMENTATION OF REGULATIONS ON LABOR, SALARY, COMPENSATION AND BONUS FOR COMPANIES WHOSE SHARES OR CONTRIBUTED CAPITAL PORTIONS ARE PREDOMINANTLY OWNED BY THE STATE

Pursuant to the Government's Decree No. 106/2012/ND-CP dated December 20, 2012, defining the functions, tasks, powers and organizational structure of the Ministry of Labor, War Invalids and Social Affairs;

Pursuant to the Government’s Decree No. 53/2016/ND-CP dated June 13, 2016 providing regulations on labor, salary, compensation and bonus for companies whose control stock or contributed capital is owned by the State;

Upon the request of the Director of the Labor – Salary Department;

The Minister of Labor, War Invalids and Social Affairs shall issue the Circular providing guidance on implementation of regulations on labor, salary, compensation and bonus for companies whose shares or contributed capital portions are predominantly owned by the State.

Section 1. GENERAL PROVISIONS

Article 1. Scope of application

1. This Circular provides guidance on implementation of regulations regarding labor, salary, compensation and bonus amounts based on which the state capital representative is authorized to participate in and vote in the Management Board’s meeting or Shareholders' general meeting of joint-stock companies of which more than 50% of charter capital is held by the State, or in the Members Board's meeting of limited liability companies with at least two members which have the state contributed capital making up more than 50% of their charter capital as prescribed by the Government’s Decree No. 53/2016/ND-CP dated June 13, 2016 providing regulations on labor, salary, compensation and bonus for companies whose shares or contributed capital portions are predominantly owned by the State (hereinafter referred to as Decree No. 53/2016/ND-CP)

2. Joint-stock companies of which more than 50% of charter capital is held by the State or limited liability companies with at least two members which have the state contributed capital making up more than 50% of their charter capital (hereinafter collectively referred to as company or companies), referred to in paragraph 1 of this Article, are enterprises in which authority and responsibilities to represent the state ownership interests in companies are delegated by the Government to Ministries, Ministry-level agencies, Governmental bodies, People’s Committees of centrally-affiliated cities and provinces, or other organizations (hereinafter referred to as state representative).

Article 2. Subjects of application

Subjects of application referred to in this Circular shall be the same as those prescribed by Article 2 of the Decree No. 53/2016/ND-CP

Article 3. Rules of management of labor, salary, compensation, bonus and objective factors of determination of salary and compensation

1. Rules of management of labor, salary, compensation and bonus applied to companies shall be subject to Article 3 of the Decree No. 53/2016/ND-CP

2. Objective factors affecting labor productivity and profits which are excluded in determining salaries of employees, and salaries and compensations of managers of companies, shall be prescribed by Article 7 of the Decree No. 53/2016/ND-CP Such exclusion of objective factors shall conform to the following requirements:

a) Effects of objective factors (if any) on the labor productivity and profit of a company must be measured and quantified before exclusion.

b) Objective factors that help increase labor productivity and profits shall be reduced while those causing any decrease in labor productivity and profits shall be included in labor productivity and profits during the process of determination of anticipated salary and bonus; in addition, objective factors affecting labor productivity and profits which are realized in comparison with anticipated ones shall be re-assessed before exclusion in the process of determination of realized salary and compensation.

Section 2. LABOR MANAGEMENT

Article 4. Organizational and labor review and structure

1. A company shall review its organizational structure and management positions to make any necessary change or modification so that they align with operational or business functions, duties and requirements, and to ensure that its organizational structure would be well-arranged; its functions and duties would not overlap each other; there would be a connection between its production and business departments, teams, groups or workshops, functional or direct management divisions (subdivisions); intermediate stages would be restricted.

2. Labor structures of specific production or business departments, groups, teams, workshops, functional or direct management divisions shall be subject to re-arrangement in which managerial, professional, engineering, technical or service employees shall be organized by their occupational positions or titles; in which definition and arrangement of work for employees directly performing production and business activities by using manufacturing lines, machinery or equipment or work process shall be based on labor standards.

3. Existing labor standards shall be reviewed and new ones may be established for employees directly performing production and business activities provided that the rules referred to in the Government’s Decree No. 49/2013/ND-CP dated May 14, 2013 providing specific regulations on implementation of certain Articles of the Labor Code on salary are observed.

Article 5. Design of a labor force plan

1. A company’s annual labor force plan shall be developed based on the organizational structure referred to in Article 4 hereof, and requirements concerning implementation of production or business workloads, quality assurance standards and duties referred to in the production and business plan, utilization of personnel in the previous year, job positions, occupational titles and labor standards of employees.

2. The labor force plan shall include total employees required, total number and quality of recruitees and job positions; professional and career training and development plan for specific employees. In the case where production or business workload and duties, or management positions, production and business establishments of a company, do not increase compared with the previous year, the planned number of employees shall not exceed 5% as against the actual average number of employees recorded in the previous year. The planned number of employees and the actual average number of employees recorded in the previous year shall be determined according to the Appendix hereto attached.

3. The labor force plan must be approved by the Management Board or the Members’ Board before implementation, and must clearly define powers and responsibilities of individual employees and the entire organization for implementation of the labor force plan.

Article 6. Assessment of use of workforce

1. Companies shall assess use of workforce on an annual basis according to the labor force plan which has been already approved. Such assessment shall include a clear analysis of advantages, difficulties or limitations in recruitment and utilization of employees, subjective or objective causes, responsibilities of individuals and recommended solutions to any difficulties.

2. In the course of implementation of the plan, if employees fail to meet work requirements or are not given work, companies must take necessary action in carrying on workforce re-arrangement or providing personnel with opportunities to take part in training, career development or refresher courses. In the case where employees are not given adequate work after all necessary actions have been taken, and termination of employment contracts with these employees is required, they must be entitled to all relevant interests and benefits as prescribed by labor legislation.

3. In case where the number of employees to be recruited is in excess of the one specified in the labor force plan or is not consistent with the labor force plan, and this results in employees lacking work, persons charged with recruitment shall be accountable to the Management Board and the Members' Board under a company's regulations and statutes.

Section 3. EMPLOYEE’S SALARIES

Article 7. Planned salary payroll

Planned salary payroll of employees shall be determined based on the planned average number of employees and the planned average rate of salary in accordance with Article 8 hereof.

Article 8. Planned average rate of salary

Based on the average rate of salary realized in the previous year and targets specified in the production and business plan, companies shall calculate the planned average rate of salary (per month) associated with the labor productivity and the planned profit compared with the recognized profit recorded in the previous year as follows:

1. If a company has an increase in the average labor productivity, the planned average rate of salary shall be determined by comparison with the realized average rate of salary recorded in the previous year which is associated with the planned profit as follows:

a) If the planned profit is equal to or greater than the realized profit recorded in the previous year, the planned average rate of salary shall not exceed the increased rate of the average labor productivity.

The average rate of salary realized in the previous year shall be determined by dividing the realized salary payroll by the actual average number of employees utilized in the previous year. The average labor productivity shall be calculated according to instructions given in the Appendix hereto attached.

b) If the planned profit is less than the realized profit recorded in the previous year, the planned average rate of salary shall not increase in excess of 80% of the increased rate of the average labor productivity.

2. If a company has the average labor productivity equal to the recognized one recorded in the previous year, the planned average rate of salary shall be determined in association with the planned profit as follows:

a) If the planned profit is increased in comparison with the realized profit recorded in the previous year, the planned average rate of salary shall be increased in comparison with the realized average rate of salary recorded in the previous year, but shall not exceed 20% of the increased rate of profit;

b) If the planned profit is equal to the realized profit recorded in the previous year, the planned average rate of salary shall be equal to the realized average rate of salary recorded in the previous year;

c) If the planned profit is decreased in comparison with the realized profit recorded in the previous year, the planned average rate of salary shall be decreased in comparison with the realized average rate of salary recorded in the previous year, and shall be equal 20% of the decreased rate of profit.

3. If a company has the average labor productivity which is decreased in comparison with the recognized one recorded in the previous year, the planned average rate of salary shall be determined in association with the planned profit as follows:

a) If a company has the average labor productivity which is decreased in comparison with the recognized one recorded in the previous year, the planned average rate of salary shall be calculated according to the following formula:

TL_bqkh = TL_bqthnt - TL_ns + TL_ln                          (1)

Where:

- TL_bqkh: Planned average rate of salary.

- TL_bqthnt: Realized rate of salary recorded in the previous year.

- TL_ns: Decreased salary amount relative to the average labor productivity, which is determined according to the following formula:

TL_ns = TL_bqthnt x x 0.8                       (2)

W_kh: Planned average labor productivity; W_thnt: Recognized labor productivity recorded in the previous year.

- TL_ln : Increased salary amount relative to the profit, which is determined according to the following formula:

TL_ln = TL_bqthnt x  x 0.2                      (3)

Where:

- TL_bqthnt: Realized rate of salary recorded in the previous year.

- P_kh: Planned profit; P_thnt: Realized profit recorded in the previous year.

b) If the planned profit is equal to the realized profit recorded in the previous year, the planned average rate of salary shall be defined as the realized average rate of salary recorded in the previous year minus the decreased salary amount relative to the average labor productivity (TL_ns), which is calculated according to the formula (2).

c) If the planned profit is less than the recognized one recorded in the previous year, the planned average rate of salary shall be calculated according to the following formula:

TL_bqkh = TL_bqthnt - TL_ns - TL_ln                              (4)

Where:

- TL_bqkh: Planned average rate of salary.

- TL_bqthnt: Realized rate of salary recorded in the previous year.

- TL_ns: Decreased salary amount relative to the average labor productivity, which is determined according to the formula (2).

- TL_ln: Decreased salary amount relative to the profit, which is determined according to the following formula:

TL_ns = TL_bqthnt x x 0.2                        (5)

P_kh: Planned profit; P_thnt: Realized profit recorded in the previous year.

4. If a company incurs loss or generates no profit (after elimination of objective factors (if any)), the planned average rate of salary shall be equal to the average rate of salary agreed upon in the employment contract (including pay rate, allowances and other benefits specified in the employment contract referred to in paragraph 1, subparagraph a paragraph 2 and subparagraph 1 paragraph 3 Article 4 of the Circular No. 47/2015/TT-BLDTBXH dated November 16, 2015 of the Ministry of Labor, War Invalids and Social Affairs providing guidance on implementation of certain articles on employment contracts, labor discipline and material responsibility of the Government’s Decree No. 05/2015/ND-CP dated January 12, 2015 specifying and guiding implementation of certain articles of the Labor Code). That company shall review and re-organize its workforce in order to improve the labor productivity, operational effectiveness and salary for employees.

5. If a company generates profit (after elimination of objective factors (if any)) after calculation of salary under paragraph 1, 2 and 3 of this Article, and the planned average rate of salary is less than the average rate of salary specified in the employment contract referred to in paragraph 4 of this Article, the planned average rate of salary shall be equal to the average rate of salary agreed upon in the employment contract. If the average labor productivity and the planned profit are greater than those recognized in the previous year, and the planned average rate of salary is less than the average rate of salary specified in the employment contract, the planned average rate of salary shall be calculated based on the average rate of salary specified in the employment contract and subject to adjustment relative to the increased rate of labor productivity, and the planned profit compared with the realized profit recorded in the previous year.

6. If a company has loss decreased in comparison with the realized loss recorded in the previous year or a company which is newly established has not had adequate indices for salary comparison and determination purposes, it shall calculate the average rate of salary based on the decreased rate of loss or the production and business plan to ensure general correlation.

Article 9. Salary advance and unit pay

1. Based on the production and business plan, a company may decide to pay employees monthly salary advances.

2. Depending on practical requirements, a company may calculate the unit pay based on the gross revenue, or by the gross revenue minus the gross cost, excluding salaries, or the profit, unit product or based on other production and business effectiveness indicators which are relevant to its operational characteristics for the purpose of managing its production and business operations.

Article 10. Realized salary payroll

1. The realized salary payroll of employees shall be determined on the basis of the actual average number of employees referred to in paragraph 2 and the realized average rate of salary specified in paragraph 3 of this Article.

2. Companies shall calculate the actual average number of salary according to instructions given in the Appendix hereto attached and in association with the planned number of employees which has been approved by the Members’ Board or the Management Board to ensure that, in either case where recognized production and business volume and duties do not increase or management positions, production or business establishments of the company do not increase in comparison with the plan, the actual average number of employees used as the basis for determining the salary payroll shall not exceed the planned average number of employees.

3. The realized average rate of salary shall be calculated on the basis of the planned average rate of salary associated with the increased or decreased level of the average labor productivity and the realized profit in comparison with the plan, subject to the principle whereby the planned average rate of salary is determined on the basis of the realized average rate of salary recorded in the previous year associated with the increased or decreased level of the average labor productivity and the planned profit in comparison with the realized ones recorded in the previous year, as prescribed by Article 8 hereof.

4. If a company incurs loss or generates no profit (after elimination of objective factors (if any)), it shall calculated the realized salary payroll by aggregating the average rate of salary agreed upon in the employment contract, salary amounts paid on national holidays or paid leaves (if not included yet), and extra pays for night work or overtime work, as prescribed by the Labor Code.

Article 11. Salary distribution

1. Companies shall establish rules for payment of salary relative to work positions or titles, ensure compliance with law, democracy, equality, public availability, transparency and involvement of the trade union’s Executive Board and all employees.

2. Based on the realized salary payroll and rules for payment of salary, companies shall be obliged to pay salaries to employees in association with their operational output, quality and effectiveness, or pay deserving salaries to employees who have shown their brilliance, professional or engineering expertise, prove their high labor productivity and contribute significantly to these companies.

3. Companies shall not be allowed to use the salary payroll of employees for the purpose of paying salaries to company managers and for other purposes as well.

Section 4. COMPANY MANAGER’S SALARIES AND COMPENSATION

Article 12. Planned salary payroll of single-office holding managers

1. The planned salary payroll shall be determined on the basis of the number of company managers and the planned average rate of salary (per month) of single-office holding managers (including single-office holding members of the Members' Board or the Management Board, General Director, Director, Deputy General Directors, Chief Accountant, Head of the control board and single-office holding comptrollers).

2. The planned average rate of salary paid to single-office holding managers shall be subject to the company’s decision closely associated with maintenance and development of capital, fulfillment of a company's obligations and responsibilities to employees and the Government as prescribed by law, and production and business targets, provided the following requirements are met:

a) If the company maintains and develops its assets, and ensures that employee salaries and income do not fall; its obligations and responsibilities to employees and the state in accordance with law are fulfilled; production and business targets are increased in comparison with the previous year’s recognized ones, the planned average rate of salary paid to single-office holding managers shall be increased in comparison with the previous year’s realized average rate of salary.

a) If the company does not maintain and develop its assets, and does not fulfill its obligations and responsibilities to employees and the state in accordance with law; its production and business targets are decreased in comparison with the previous year’s recognized ones, the planned average rate of salary paid to single-office holding managers shall be decreased in comparison with the previous year’s realized average rate of salary.

3. The planned average rate of salary paid to single-office holding managers which is subject to the company’s decision as prescribed by paragraph 2 of this Article must assure conformance to provisions laid down in Article 13 and Article 14 hereof.

Article 13. Planned average rate of salary paid to single-office holding managers who are state representatives

The maximum planned average rate of salary paid to single-office holding managers who are state representatives shall vary depending on the company's profit as follows:

1. If the company’s planned profit is less than VND 50 billion, the maximum planned average rate of salary shall not exceed VND 36 million/month (referred to as base pay rate).

2. If the company's planned profit is at least VND 50 billion, the planned average rate of salary shall be calculated based on the base pay rate and the indexing factor by which the base pay rate is multiplied (hereinafter referred to as indexing factor), in association with the amount of profit generated in the company’s specific production and business sectors as follows:

a) The maximum indexing factor is 0.5 if the company's profit is from VND 50 billion to under VND 100 billion.

b) The maximum indexing factor is 1.0 if the company operating in the banking, finance or telecommunications sector earns profit which is from VND 100 billion to under VND 500 billion; from VND 100 billion to under VND 300 billion in the oil and gas, mineral extraction, processing, electricity, commerce or service sector; from VND 100 billion to under VND 200 billion in other sectors.

c) The maximum indexing factor is 1.5 if the company operating in the banking, finance or telecommunications sector earns profit which is from VND 500 billion to under VND 1,000 billion; from VND 300 billion to under VND 700 billion in the oil and gas, mineral extraction, processing, electricity, commerce or service sector; from VND 200 billion to under VND 500 billion in other sectors.

d) The maximum indexing factor is 2.0 if the company operating in the banking, finance or telecommunications sector earns profit which is from VND 1,000 billion to under VND 1,500 billion; from VND 700 billion to under VND 1,000 billion in the oil and gas, mineral extraction, processing, electricity, commerce or service sector; from VND 500 billion to under VND 700 billion in other sectors.

dd) The maximum indexing factor is 2.5 if the company operating in the banking, finance or telecommunications sector earns profit which is at least VND 1,500 billion; at least VND 1,000 billion in the oil and gas, mineral extraction, processing, electricity, commerce or service sector; at least VND 700 billion in other sectors.

e) If a company earns profit which is at least 50% greater than the profit rate (in specific sectors) as prescribed in subparagraph dd paragraph 2 of this Article; it operates in certain particular sectors or industries, generates profit less than the lowest profit in specific sectors specified in subparagraph a, b, c, d, dd paragraph 2 of this Article, but needs to give incentives to managerial employees, the company may consider and apply the indexing factor which is not 10% higher than the respective one referred to in subparagraph a, b, c, d, dd paragraph 2 of this Article.

Based on the range of the allowed maximum indexing factor relative to the profit earned in specific sectors as referred to in paragraph 2 of this Article, where necessary the entity acting as a state representative shall decide to continue to subdivide the indexing factors relative to the planned profit under practical conditions and ensure general correlation in terms of operational scale and efficiency between companies.

3. If a company generate no profit, incurs loss or has loss decreased in comparison with the previous year’s realized loss or a company is newly incorporated, based on the production and business plan and the degree of loss or reduction in loss, that company shall determine salaries paid to managers and ensure general correlation.

Article 14. Planned average rate of salary paid to single-office holding managers who are not state representatives

A company shall determine the planned average rate of salary paid to single-office holding managers who are not state representatives on the basis of working positions of those who are state representatives, and ensure the rational proportion between it and salary applied to equivalent titles on the market and salary paid to managers who are state representatives as prescribed by Article 13 hereof.

Article 15. Realized salary payroll of single-office holding managers

1. The realized salary payroll of single-office holding managers shall be determined on the basis of the actual number of single-office holding managers (calculated on average per month) and the realized average rate of salary.

2. A company shall calculate the realized average rate of salary on the basis of the planned average rate of salary in association with the degree of accomplishment of production and business targets referred to in Article 13 and Article 14 hereof as follows:

a) If the company successfully completes the production and business plan, and its realized profit equals the planned profit, the realized average rate of salary shall be defined as the planned average rate of salary.

b) If the company successfully completes the production and business plan, and its realized profit exceeds the planned profit, for every 1% of profit greater than the planned profit, the realized average rate of salary shall be increased by 2% but not exceeding 20% of the planned average rate of salary.

c) If the company’s realized profit is less than the planned profit, for every 1% of profit decreased in comparison with the planned profit, the realized average rate of salary paid to managers who are state representatives shall be reduced by 1% in comparison with the planned average rate of salary.

If the company has its realized profit which is decreased and is less than the minimum profit in each sector upon determining the planned average rate of salary as stated in paragraph 2 Article 13 hereof, the realized average rate of salary shall only be calculated within the range of indexing factors relative to its profit as prescribed in paragraph 2 Article 13 hereof.

As for a manager who is not a state representative, the realized average rate of salary shall be subject to the company’s decision that ensures rational proportion between it and salary paid to a manager who is a state representative.

Article 16. Compensation package of multiple-office holding managers

1. A company shall determine the planned compensation package on the basis of the number of its multiple-office holding managers, term of office and compensation rate (per month) which equals the maximum of 20% of the planned average rate of salary paid to single-office holding managers.

2. A company shall determine the realized compensation package on the basis of the actual number of its multiple-office holding managers present at some time in a year, term of office and compensation rate (per month) which equals the maximum of 20% of the realized average rate of salary paid to single-office holding managers.

Article 17. Payment of salary and compensation to managers

1. Payment of salary and compensation to managers shall be made as per the company’s rules for paying salary and compensation.

2. The company shall establish rules for paying salary and compensation that take into account the degree of managers' contribution to production and business efficiency and the management or controlling performance of each manager, ensure compliance with law, democracy, public disclosure, transparency and involvement of the Executive Board of the company’s trade union in such rules before implementation.

Section 5. BONUS AND BENEFIT OF EMPLOYEES AND MANAGERS

Article 18. Bonus and benefit package

After setting aside a portion of its annual profit for fulfillment of obligations to the state and stakeholders under legislative regulations and company statutes, the company shall determine the bonus and benefit package of employees and managers, depending on the degree of accomplishment of planned profit targets, as follows:

1. The bonus and benefit package of employees:

a) If the realized profit is equal to the planned profit, the bonus and benefit package shall not exceed 3 months' realized average salary paid to employees at the maximum.

b) If the realized profit is greater than the planned profit, in addition to the bonus and benefit package stated in subparagraph a above, the company shall offer additional 20% of profit portion exceeding the planned profit but shall not be greater than 3 months' realized average salary paid to employees.

c) If the realized profit is less than the planned profit, the bonus and benefit package shall not exceed 3 months' realized average salary paid to employees at the maximum multiplied by the per cent proportion of the realized profit to the planned profit.

2. Bonus and benefit package of managers:

a) If the realized profit is equal to or greater than the planned profit, the bonus and benefit package of managers shall not exceed 1.5 month's realized average salary paid to single-office holding managers at the maximum.

b) If the realized profit is less than the planned profit, the bonus and benefit package of managers shall not exceed 01 month's realized average salary paid to single-office holding managers at the maximum.

3. Based on the bonus and benefit package referred to in paragraph 1 of this Article, companies may divide such package into the bonus package of employees (which shall not be used to reward company managers, except bonuses allowed by laws on emulation and rewarding) and the benefit package which shall be used for development or repair of welfare projects and welfare activities of employees (including managers).

Section 6. ENFORCEMENT RESPONSIBILITIES AND EFFECT

Article 19. Responsibilities of state representatives

1. Advising the Management Board and the Members’ Board to insert regulations on management of labor, salary, compensation and bonus of the Government and guidance on implementation thereof given in this Circular into the company statutes or rules; participating in a vote on specific regulations on labor, salary, compensation and bonus of the company.

2. Preparing a general report on plans for utilization of workforce and the salary payroll, compensation and bonus package realized in the previous year, the planned salary payroll, compensation and bonus package of employees and managers for submission to the entity representing the state ownership interests in companies (enclosing herewith data represented by using forms No.1, 2 and 3 in Appendices to this Circular).

3. Proposing and consulting with the entity representing the state ownership interests in companies on the plan for utilization of personnel, plan for determination of the salary payroll, compensation and bonus package of the company in accordance with paragraph 2 of this Article before contributing their opinions to the Management Board or the Members’ Board with regard to basic contents represented in the form No.4 hereto attached.

4. Assessing results achieved after following the opinions of the entity representing the state ownership interests in companies and preparing a general report on plans for utilization of workforce and the salary payroll, compensation and bonus package realized in the previous year, the planned salary payroll, compensation and bonus package of employees and managers for submission to the entity representing the state ownership interests in companies (enclosing herewith data represented by using forms No.1, 2 and 3 in Appendices to this Circular) after receipt of approval from the Members’ Board and the Management Board.

5. Making annual general supervisory reports to the entity representing the state ownership interests in companies on labor, salary, compensation and bonus of the company (specifying achievements, shortcomings and causes) as the basis for assessing the degree of fulfillment of duties, paying responsibility allowances, compensations, bonuses, and applying reward and disciplinary regulations to state representatives in accordance with law. In case of failure to fulfill assigned duties, their responsibility for such failure shall be clarified and possible disciplinary actions shall be proposed.

If there are multiple state representatives in a company, the state representative who represents the highest portion of shares and contributed capital shall be responsible for taking charge of exchanging, getting and integrating opinions of other state representatives into a general report on contents of paragraph 2, 3 and 4 of this Article which is submitted to the entity representing the state ownership interests in companies.

Article 20. Responsibilities of the entity representing the state ownership interests in companies

1. Authorizing state representatives in writing to carry out management of labor, salary, compensation and bonus of these companies in conformity with the Government’s regulations and guidance given in this Circular.

2. Receiving and reviewing state representatives’ reports on issues related to labor, salary, compensation and bonus of these companies to give their opinions; deciding and bearing responsibility for applying the salary indexing factors to single-office holding managers which does not exceed 10% in accordance with subparagraph e, paragraph 2, Article 13 hereof.

If any state representative applies for application of the salary indexing factor of single-office holding managers which is higher than the statutory range referred to in paragraph 2, Article 13 hereof, the entity representing the state ownership interests in companies shall give him/her direction to ensure proper distribution, based on the company’s profit volume and overall pay level on the market and after consultation with the Ministry of Labor, War Invalids and Social Affairs.

3. Annually making an assessment report on fulfillment of duties of state representatives based on which the rate of salary and bonus paid to single-office holding state representatives of the company are determined, compensation, allowances and bonuses paid to multiple-office holding state representatives of the company, or sanctions imposed on these state representatives in accordance with law, shall be determined.

4. Taking charge of and collaborating with the Minister of Labor, War Invalids and Social Affairs in supervision of compliance of companies designated as state representatives as prescribed by laws with regulations on labor, salary, compensation and bonus.

5. Preparing an annual overview report on labor, salary, compensation and bonus, enclosing data represented by using forms No. 5 and 6 hereto attached, for submission to the Ministry of Labor, War Invalids and Social Affairs for compilation and overall supervision purposes.

Article 21. Responsibilities of the Ministry of Labor, War Invalids and Social Affairs

1. Collaborating with the entity representing the state ownership interests in companies on supervision of compliance of companies with regulations on management of labor, salary, compensation and bonus as prescribed by laws.

2. Consulting with the entity representing the state ownership interests in companies on application of the salary indexing factor which is higher than the range of indexing factors for single-office holding managers as stated in paragraph 2, Article 13 hereof.

3. Preparing a general and assessment report on labor, salary, compensation and bonus of companies for submission to the Prime Minister in accordance with regulations in force.

Article 22. Entry into force

1. This Circular shall commence on October 15, 2016.

2. If the Shareholders’ General Meeting has ratified or the Members’ Board has approved the planned salary payroll and bonus package of 2016 before this Circular's entry into force, the company shall determine its realized salary payroll and bonus package of 2016 which is similar to the planned ones which have been ratified or approved, or adjust the planned salary payroll and bonus package and determine its realized salary payroll and bonus package of 2016 in accordance with this Circular.

3. The Members’ Board or the Chair of a parent company of state-owned economic corporations, a parent company of state-owned general companies, and a parent company belonging to the group of parent - subsidiary companies of which the charter capital is wholly owned by the state, shall rely on provisions of this Circular to order and assign state representatives to take necessary actions to manage labor, salary, compensation and bonus at companies of which shares or contributed capital portions are predominantly owned by a parent company.

4. The state representative of a parent company of state-owned economic corporations, a parent company of state-owned general companies, and a parent company belonging to the group of parent - subsidiary companies of which share and contributed capital portions are predominantly owned by the state, shall contribute opinions to assist the Management Board and the Members' Board in applying provisions of this Circular to manage labor, salary, compensation and bonus at companies of which shares or contributed capital portions are predominantly owned by a parent company.

5. Ministers, Heads of Ministry-level agencies, Heads of Governmental bodies, and Presidents of People’s Committees of centrally-affiliated cities and provinces, shall be responsible for directing, expediting, inspecting and supervising implementation of regulations set out in this Circular.

In the course of implementation, if there is any difficulty, entities, organizations and companies may send feedbacks to the Ministry of Labor, War Invalids and Social Affairs to receive its timely instructions.