VietNamNet Bridge – Ngo Duy Hieu, Vice President of the Viet Nam Confederation of Trade Union, talks to Thời báo Kinh tế Việt Nam (Việt Nam Economic Times) on the essential elements that must be addressed in the upcoming 2019 salary reform.

Vietnam’s salary system has been reformed four times. In your opinion, why has the Government decided to have its 5th salary raise in 2019 for all Vietnamese wage earners?

Generally speaking, wage earners in Vietnam work in two blocs – the public sector and private enterprises. The salary systems applied in both blocs are very complicated. In my opinion, even though the salary system in the public sector is now quite complicated, it is yet not fair to public employees in general. The system has not adequately paid for the quality service of many public employees. This is a key reason why “brain drains” have been reported in many government offices. Another issue is that public employees’ salary scales are mainly based on their years of service and academic degrees, not their work performance.

In the private sector, workers’ salaries do not really reflect work performance. Adding to the problem is the weak position of workers in salary negotiations with employers.

What should be changed in the salary reform, particularly in the public system?

At its recent meeting, the 12th Party Central Committee legislature issued Resolution No 27 on salary reform in both the public sector and the enterprise sector.

The resolution states clearly that the structure of a public employee’s salary has three components: the basic salary (which accounts for about 70 per cent of the salary), the subsidised salary (30 per cent) and a bonus fund (equal to about 10 per cent of the total annual salary fund – excluding the subsidiary money).

What are the most notable changes in the wage structure for the enterprise sector?

A governing principle for the wage reform in this sector is allowing businesses (including State-owned enterprises) to decide their own wage system. Of course, workers’ wages must not be lower than the minimum wage set by the Government and should be based on the collective labour agreement between the employer and the workers’ trade union.

State-owned enterprises (SOEs) have to respect and follow the Government’s guidelines on setting wage scales for their workers.

In short, the wage reform must ensure that the workers and their dependents can live on the wage they receive and have small sum of money for the rainy days.

Source: VNS