Le Xuan Thanh, vice director of the General Salary Department under the Ministry granted an interview to VOVNews about this issue. Following is the full text of the interview.
VOVNews: Why do we have to draft the law?
Mr Thanh: As a minimum salary is to protect employees in the market economy and to fight overexploitation, the policy on minimum salary should be legalised. The drafting will provide a legal framework for State agencies to define, apply and adjust the minimum salary level in line with the country’s development periods. The current Labour Code has two articles regulating the minimum salary level, but they are too general while the drafting of the law requires lawmakers to make clear subjects and scope of application, criteria and regulations to identify, apply and adjust the minimum salary level as well as strengthening State management over the level.
VOVNews: What are the criteria used to determine the minimum salary level?
Mr Thanh: Calculation of the level is based on: the minimum living conditions of an employee who does the simplest work in normal working conditions; a wage survey of an unskilled employee who does the simplest work in normal working conditions; the country’s GDP and individual spending funds.
VOVNews: Will the law affect the Government’s salary reform scheme?
Mr Thanh: As I mentioned earlier, the minimum level is considered a “safety net” to protect employees. Employers and employees have the right to negotiate for a higher salary level than the State level. It is similarly applied to an annual increase in salary based on the inflation rate, business productivity and operation efficiency. Currently, many businesses and employees have reached agreements to increase salaries annually based on those factors.
Reporter:
Mr Thanh: It doesn’t mean that. The minimum salary will be applied for the whole period and depends on many factors, such as economic growth, consumer prices, and supply-demand relations in markets. For example, at the beginning of 2006, many strikes occurred in foreign-invested enterprises and private businesses. This was not attributed to the slow adjustment in the minimum salary. In fact, many enterprises pay salaries that are higher than the minimum salary regulated by the State. The key problem is that labourers and their representatives lack the mechanism to compromise on salary and annual salary increase. Therefore, the Law on Minimum Salary will have regulations on this issue.
Reporter: After the Law on Minimum Salary comes into effect, what benefits will labourers enjoy?
Mr Thanh: The Minimum Salary Law is a step that will institutionalize, in terms of law, minimum salary policies. This is a legal foundation to successfully implement minimum salary policies and increase the role of the minimum salary, thereby building and promoting a healthy labour relation in enterprises.
The Law on Minimum Salary is also an essential step for Vietnam’s integration process now the country has become an official member of the World Trade Organization (WTO). This requires enterprises to compete in an equal manner. As a result, it is impossible for the three levels of minimum salary to exist. We plan to apply a unified minimum salary level for all types of businesses based on the establishment of a common minimum salary level, regional minimum salary level and minimum salary level for each sector. In the future, the minimum salary will be in accordance with the market and reality in order to ensure minimum living standards for employees.
Reporter: Thank you very much.
VOVNews reporter Vu Hanh
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