Legal Weekly Newsletter 21/03/2024

On February 23, 2024, the Government issued Decree No.  21/2024/ND-CP to amend and supplement a number of articles of Decree No.  51/2016/ND-CP regulating labor and money management. salaries and bonuses for employees working in single-member limited liability companies with 100% charter capital held by the State and Decree No.  52/2016/ND-CP  dated June 13, 2016 regulating salaries, remunerations, and bonuses for managers of single-member limited liability companies with 100% charter capital held by the State. Decree No.  21/2024/ND-CP takes effect from April 10, 2024 and has some notable contents as follows: 

1. Amending regulations on salary scale, salary table, salary allowances for employees and full-time managers and controllers 

  • The salary levels in the salary scale, salary table, and salary allowances are decided by the company, but must ensure that the salary fund calculated according to the salary levels in the salary scale, salary table, and salary allowances must not exceed the planned salary fund. of employees according to the provisions of Decree No.  51/2016/ND-CP and Decree No.  52/2016/ND-CP . 
  • When developing or amending or supplementing salary scales, payroll, and salary allowances, the company must consult with the employee representative organization at the facility and organize dialogue at the workplace according to regulations. Report to the owner’s representative agency for comments and publicize it at the company before implementation. 

2. Eliminate objective factors when determining the employee’s planned salary fund 

  • The State adjusts prices, production and business limits (for products and services priced by the State or regulates production and business limits), corporate income tax incentives, and increases or decreases in capital. The state requires companies to relocate, narrow production and business locations, and adjust mechanisms and policies that directly affect the company’s labor productivity and profit targets. 
  • The company participates in performing political tasks, national security and defense, ensuring social security, balancing supply and demand for the economy according to the Prime Minister’s decision; make investments, receive or transfer the right to represent state capital owners under the direction of the Government or the Prime Minister; receive, buy, sell, freeze, defer and handle debts and assets, buy and sell products and services according to the provisions of law or requests of competent state agencies; Implement provisions on retroactivity according to Government regulations; Increase depreciation to recover capital quickly according to tax laws; Adjust operating policies according to the requirements of competent state agencies, agreements, treaties or regulations of international organizations of which Vietnam is a member; Implement restructuring projects, supplement or divest investment capital in other enterprises; new investment, expansion of production and business; adjust or create new provisions for financial and credit risks according to the provisions of law; Providing products and services that are priced by the state and have a price adjustment mechanism, but the price has not been adjusted sufficiently to compensate for reasonable actual production and business costs when factors forming prices change according to regulations of the Government. Price Law; Allocating costs of unsuccessful oil and gas search, exploration and exploitation projects according to Government regulations, determining corporate income tax according to oil and gas contracts for search, exploration companies, exploit oil and gas according to tax laws; Debt purchase and debt settlement sales have not been recorded in revenue and profits for debt trading companies according to the provisions of law; fluctuations in revenue from securities trading market organization and securities depository operations; Differences in reward payments compared to previous year’s performance for lottery companies; changes in the environment and mineral exploitation conditions for mineral mining companies. 

3. In case the Company’s Control Board has only 01 Controller as prescribed in Article 103 of the Law on Enterprises, the Controller is entitled to salary, remuneration, and bonus for the position of Head of the Control Board.