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Decrees boost wages, SOE sales
On October 10, the Government set new minimum-wage rates for Vietnamese working for foreign-invested enterprises, for foreign and international organisations and for foreign individuals in Viet Nam.
Area Minimum Wage Rate
According to Decree No.111/2008/ND-CP, the new minimum-wage rates for the most basic work shall be implemented from January 1 as follows: VND1,200,000 (presently VND1,000,000) applicable to those working for enterprises operating in area number one, including Ha Dong City and inner districts of Ha Noi and HCM City; VND1,080,000 (presently VND900,000) applicable to those working for enterprises in number two area, including rural districts of Ha Noi, such as Gia Lam, Dong Anh, Soc Son etc., and some districts in Hai Phong, Da Nang, Can Tho and Quang Ninh City etc; VND950,000 (presently VND800,000) applicable to area number three, including cities under province, apart from provinces mentioned above; VND920,000 applicable to all enterprises operating in the remaining area, number four.
On the same day, the Government issued Decree No.110/2008/ND-CP stipulating minimum-wage rates for employees working for Vietnamese enterprises, bodies, organisations and individuals. Accordingly, the minimum wage rates per month for the most basic work will be as follows: VND800,000 (currently VND620,000), VND740,000 (VND580,000), VND690,000 (VND540,000) and VND650,000 shall be applicable to the areas number one, two, three and four respectively.
The minimum wage rates will be used as the basis for calculating wage scales, wage tables and all types of allowances, for calculating wage rates recorded in employment agreements, and for implementing other regimes formulated by enterprises and promulgated by them in accordance with the labour law. The lowest wage payable to employees who have passed vocational training courses, including employees who have been trained by the enterprise which employs them, must be at least 7 per cent higher than the area minimum wage rates above.
The two decrees take effect on January 1, 2009, and replace Decree No.167/2007/ND-CP and Decree No.168/2007/ND-CP.
Sale and transfer of 100% State-owned businesses
On October 10, the Government issued Decree No.109/2008/ND-CP on the sale and transfer of 100 per cent State-owned enterprises.
This must follow the overall programme for restructuring State-owned enterprises approved by the Prime Minister and comply with the following principles, among others.
First, the buyer or the transferee must not re-sell the enterprise during the term provided in the contract.
Second, the corporate value of the enterprise for sale will be the market price, while that of the enterprise being transferred will be the audited book value.
Third, Decree 109/2008/ND-CP gives preference to selling enterprise by auction, whereby the buyer assumes all outstanding debts. It is further stipulated that the labour collective shall be given priority if paying the same price as other purchasers at the last auction sale.
The buyer shall have the right to choose the legal form of the enterprise after sale and be entitled to continue to lease the land or land allocation with collection of land fee. The seller shall have to cross-check, certify and collect all the receivables or pay all the payables that become due before the sale. The starting selling price shall not be lower than the total value of the State-owned capital or the total value of the enterprise and the value of the land-use right. The method of selling enterprises might be public auction or direct selling, depending on the number of the registered purchasers.
Noteworthy among the permitted buyers are foreign-invested enterprises and foreign financial institutions. For sectors subject to Viet Nam’s international commitments, the foreign equity will be limited as such. For other sectors, the buyer may own the whole enterprise.
The Decree also deals with the "transfer" of a 100 per cent State-owned enterprise. "Transfer" here means the change of ownership of the enterprise without collection of money to the labour collective – with clear definition of ownership by each member. The labour collective must undertake to maintain and develop business production, ensure jobs for at least three years and fully pay social insurance for workers. They must not sell, lease or dissolve the enterprise within a minimum period of three years after the transfer, except in case of bankruptcy. The remaining value of the enterprise after the transfer shall be divided into shares or shares of capital contribution and be allotted to each employee. Such shares must not be sold to outside buyers within three years after the transfer.
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