Socialist Republic of Vietnam

DECREE ON IMPLEMENTATION OF A NUMBER OF ARTICLES OF THE LABOUR CODE WITH RESPECT TO WAGES

(No. 197-CP, Hanoi, 31 December 1994)


The Government

Pursuant to the Law on the Organization of the Government dated 30 September 1992;

Pursuant to the Labour Code dated 23 June 1994;

Following the proposal of the Minister of Labour, War Invalids and Social Affairs;

Decrees:


CHAPTER I

Entities and Scope Regulated

Article 1

The entities and scope regulated with respect to wages in accordance with articles 2 and 3 of the Labour Code are employees employed in the following organizations:

1. State owned enterprises;

2. Enterprises in other economic sectors;

3. Public service units which operate in accordance with cost accounting systems;

4. Commercial and service organizations belonging to administrative bodies and public services, the armed forces, mass organizations, political and social organizations and other economic sectors which are permitted to register their operations;

5. Enterprises with foreign owned capital and enterprises in export processing zones and industrial zones;

6. International and foreign agencies or organizations operating in Vietnam with Vietnamese employees, except in cases where international treaties to which the Socialist Republic of Vietnam is a signatory or participant otherwise provide.

Article 2

The following entities and scopes are not regulated in accordance with article 4 of the Labour Code:

1. Public employees and officials employed in State administrative bodies and State public services;

2. Persons elected, appointed or assigned to positions in State bodies;

3. Persons belonging to mass organizations and other political and social organizations in accordance with the internal regulations of such organizations; members of co-operatives;

4. Officers, non-commissioned officers and soldiers of the armed forces;


CHAPTER II

Minimum Wage, Wage Scale and WageTable

Article 3

1. The minimum wage as stipulated in article 56 and clause 2 of article 132 of the Labour Code is the wage paid to an employee employed in the most basic job (requiring no training) with normal working conditions and environment.

2. The Ministry of Labour, War Invalids and Social Affairs shall, after consultation with the Trade Union Federation of Vietnam and representatives of employers, submit a proposed minimum wage to the Government for approval and shall publish a minimum wage for each period.

3. The Ministry of Labour, War Invalids and Social Affairs shall, after consultation with the Trade Union Federation of Vietnam, the State Committee for Co-operation and Investment and representatives of employers, submit to the Government for promulgation or promulgate in accordance with its delegated powers the minimum wage of Vietnamese employees working in enterprises with foreign owned capital, enterprises in export processing zones and industrial zones, or foreign or international organizations operating in Vietnam.

Article 4

The wage scale or table stipulated in article 57 of the Labour Code shall be regulated as follows:

1. The Government shall promulgate a wage scale or table and a regime of allowances for enterprises, business and service organizations, and public service units which operate in accordance with cost accounting systems within the State public sector.

2. The Ministry of Labour, War Invalids and Social Affairs shall, on the basis of State wages policies, guide and implement a wage regime for enterprises and business, production or service organizations in other economic sectors.


CHAPTER III

Payment of Wages and Salaries

Article 5

Methods of payment of wages stipulated in article 58 of the Labour Code shall be regulated as follows:

1. Wages calculated and paid by reference to time are wages paid to employees on the basis of actual working time:

- A monthly wage is a fixed wage paid monthly in accordance with the labour contract;

- A weekly wage is a wage paid for a working week calculated by multiplying the monthly wage by twelve (12) months and dividing the sum by fifty two (52) weeks;

- A daily wage is a wage paid for a working day calculated by dividing the monthly wage by twenty six (26) days;

- An hourly wage is a wage paid for a working hour calculated by dividing the daily wage by the number of normal hours stipulated in article 68 of the Labour Code.

2. Wages calculated and paid on the basis of a product produced are wages paid to employees on the basis of the quantity and quality of their products.

3. Contract wages are wages paid to employees on the basis of the volume and quality of work which must be completed.

Article 6

The special cases referred to in clause 1 of article 59 of the Labour Code are events caused by electrical failures or water shortages; events resulting from the application of preventive or remedial measures in respect of labour accidents and occupational diseases; or events resulting from a change of working place or from difficulties in production and business which the employer cannot overcome even after having resorted to every possible measure. In such cases, a delay in payment of wages is permissible provided that such delay does not exceed one month and compensation is paid to the employee as follows:

- For a delay of less than fifteen (15) days, no compensation is required.

- For a delay of fifteen (15) days or more, the compensation payable shall be at least equal to the payment in arrears multiplied by the monthly interest rate of saving deposits published by the State Bank at the time of payment of wages.

Article 7

Deductions from wages of employees as stipulated in clause 1 of article 60 of the Labour Code shall be regulated as follows:

On the basis of the monthly wage received by an employee after payment of social insurance and medical insurance premiums and personal income tax, the employer shall deduct gradually any amount paid in advance in accordance with article 67 and any compensation for material damage referred to in article 89 of the Labour Code.

Article 8

Payment for overtime and nightshift work pursuant to article 61 of the Labour Code shall be regulated as follows:

1. Where wages are paid by reference to time, the employee shall be paid for any additional hours worked outside the normal hours.

2. Where wages are paid on the basis of a product produced or a completed project, the employee shall be paid for any additional hours worked as required by the employer to produce a greater quantity or volume than that achievable in normal hours.

3. An employee who works nightshift on an irregular basis shall be paid an additional wage equal to at least thirty (30) per cent of the dayshift wage, and at least thirty five (35) per cent of the dayshift wage where the work is regular (in the case of three shift working regimes) or is carried out regularly at night.

Article 9

Bonuses paid from remaining profits (after payment of State obligations) to employees who have been employed in an enterprise for one year or more as stipulated in article 64 of the Labour Code shall be regulated as follows:

1. In respect of enterprises and business or service organizations in the State public sector, the maximum bonus paid shall not exceed wages for six months in accordance with the labour contract.

2. In respect of enterprises with foreign owned capital and enterprises in export processing zones or industrial zones, the bonus paid shall be mutually agreed but shall not be less than wages for one month in accordance with the labour contract.

3. In respect of private enterprises, the bonus paid shall be mutually agreed but must at least represent ten (10) per cent of profits.

Article 10

Wages paid in advance to employees pursuant to clauses 1 and 2 of article 67 of the Labour Code shall be regulated as follows:

1. Where an employee or his family experiences difficulties, the employee shall be entitled to receive wages in advance equal to at least wages for one month. The mode of payment shall be mutually agreed but the amount shall not be subject to interest.

2. Where an employee has taken temporary leave of absence for one week or more to perform public duties, he or she shall be entitled to receive wages in advance equal to the number of days absent and shall be subject to wage deductions as stipulated in article 7 of this Decree.

Article 11

Wages paid in advance to an employee who is in temporary custody or detention as stipulated in clause 3 of article 67 of the Labour Code shall be regulated as follows:

1. During the period of his or her temporary custody or detention, the employee shall receive an advance payment equal to fifty (50) per cent of the monthly wage in the previous month in accordance with the labour contract.

2. Even where the employee is found to be guilty at the end of the temporary custody or detention, he or she shall not be required to return the advance payment referred to above. Where the employer is at fault, the employer must pay the employee full wages in accordance with the labour contract. Where fault rests with the legal authority, the matter shall be dealt with in accordance with the law.

Article 12

1. Wages paid to an employee during his or her annual leave, public holidays, and paid leave of absence shall be calculated by reference to time or by dividing the monthly wage (which includes any premiums for seniority and status of employment, regional allowances, long service allowances, and position allowances, if any) by twenty six (26) days and multiplying the outcome by the number of days absent.

2. Wages paid to an employee who works overtime or night work shall be determined by reference to the method of payment stipulated in article 5 of this Decree.

3. Where there is a stoppage of work during a shift as stipulated in clause 1 of article 62 of the Labour Code, the employee shall be paid for time lost if the stoppage lasts for two or more hours.

Article 13

The wage used as the basis for calculating payment of severance allowances, retrenchment allowances and compensation for labour accidents and occupational diseases shall be the wage stated in the labour contract (the average of the six months immediately preceding the occurrence of the event or accident), and includes: premiums for seniority and status of employment, regional allowances, long service allowances, and position allowances (if any).

Article 14

Wages paid during leave periods referred to in articles 41, 53, 62, 73, 74, 76, 78 and 92 of the Labour Code shall be determined by reference to the monthly wage in the immediately preceding month and the method of payment of wages on the basis of working time as stipulated in clause 1 of article 5 of this Decree.


CHAPTER IV

Other Provisions

Article 15

Apprentices and trainees as stipulated in clause 2 of article 23 of the Labour Code shall be paid a wage where he or she directly manufactures a product. The wage shall be mutually agreed but shall not be less than seventy (70) per cent of the wage rate of an employee performing the same job.

Article 16

Female employees referred to in article 111 of the Labour Code shall be paid the same wages as male employees when performing the same job. In the event of a pay rise, a female employee shall be given priority consideration over a male employee with the same conditions and standards.

Article 17

Junior employees referred to in article 121 of the Labour Code shall receive the same wages as adult employees when performing the same job.

Article 18

Senior employees who are entitled to reduced working hours as stipulated in article 123 of the Labour Code shall be entitled to full wages.

Article 19

Disabled employees referred to in article 125 of the Labour Code shall be entitled to the same wages as ordinary employees when peforming the same job.

Article 20

An employee who has specialized or highly technical skills as referred to in article 129 of the Labour Code shall be entitled to wages as specified in the wage table for high level specialists, experts and artists in accordance with his or her title or professional standard. Enterprises shall be permitted to implement wage mechanisms which attract highly skilled labour.

Article 21

A Vietnamese citizen who is permitted to work overseas as a contractor or pursuant to a contract as stipulated in clause 2 of article 134 of the Labour Code shall receive part of his or her wages in the currency of the host country or another convertible currency during his or her time overseas.

Article 22

Based on the guidelines of the Ministry of Labour, War Invalids and Social Affairs, enterprises with foreign owned capital and enterprises in export processing zones or industrial zones shall be permitted to:

1. Prepare and implement a system of wage scales, tables, rates, and allowances and methods of payment of wages in order to ensure the interests of all parties.

2. Determine the wages of the director (general director), deputy director (deputy general director) and other key officers in the enterprise for submission to the board of management for approval.

Article 23

The Ministry of Labour, War Invalids and Social Affairs shall, pursuant to article 136 of the Labour Code with respect to persons working in trades or special jobs within the artistic field, submit proposals to the Government for consideration and decision.


CHAPTER V

Implementation Provisions

Article 24

This Decree shall be of full force and effect as of 1 January 1995.

Article 25

Ministers, heads of ministerial equivalent bodies, heads of Government bodies, and chairmen of people's committees of provinces and cities under central authority shall be responsible for the implementation of this Decree.


On behalf of the Government
Prime Minister


VO VAN KIET