Salary to be adjusted in accordance with CPI to meet minimum demand

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Mr. Pham Minh Huan. Photo: VGP/Thanh Chung

Mr. Pham Minh Huan, Deputy Minister of Labor, War Invalids and Social Affairs mentioned the above statement in the conversation with journalist of Vietnam Government Portal about the salary adjustment schedule from the sidelines of the recent conference on Introductory to Labor Act (revised) in Hanoi. 

Sir, according to the Labor Act (revised), the minimum salary must be enough to meet minimum demand of workers and their families. How the minimum demand can be determined?

Mr. Pham Minh Huan: currently, we are certainly able to calculate the minimum demand based on the needs of the labor. There are two groups of demand: Food, victuals and non-food, non-victuals. Generally the demand for food and victuals is calculated in calories, for example everyday a worker needs 2.300 calories, the the percentage of food and victuals are calculated. Which is the basis for the percentage of  non-food and non-victuals to be figured out. Generally, through the needs for food and victuals, we can calculate the needs for non-food and non-victuals. There is also another method using the variables in locations, education, clothes, and entertainment.

Why was it not determined that (the year the code comes into effect) the minimum salary could meet minimum demand in 2013 but 2015 (according to the conclusion no 23 of the Central party committee, dated May 29^th, 2012)?

Mr Pham Minh Huan: the salary is being adjusted based on 2 factors. On one hand, it is raised to meet the minimum demand, on the other hand the actual salary must be assured. We must come up with a schedule to make minimum salary meet with minimum demand. After that, it will be adjusted based on Consumer Price Index (CPI)

One new thing in the Labor Act (revised) is the establishment of the National Salary Advisory Council. Can you share with us what is the role of Ministry of Labor, Invalids and Social Affairs toward the council?

Mr Pham Minh Huan: On May 1^st, 2013, when the Labor Act (revised) comes into effect, adjustment (in minimum wage – Writer) will be carried out in 2014 later on, the National Salary Advisory Council will be responsible for providing the government with consultancy on the establishment of minimum wage.

At that time, the Ministry of Labor, War Invalids and Social Affairs will be playing two roles, which is complying with the operation mechanism of the council and studying the proposal of salary adjustment plan as a state management function. The plan given out by the Ministry might be the same as or different from that of the Council, the point is that it must be clearly interpreted to reach to a common solution.

You once said that adjusting the minimum wage is very difficult because the Ministry of Labor, War Invalids and Social Affairs would like to increase it, while enterprises would not. Now, the National Salary Advisory Council includes the participation of the Ministry, the Confederation and representatives of entrepreneurs. What is the solution to reduce “confrontation” about salary adjustment in this new organization?

Mr Pham Minh Huan: Currently, salary adjustment is conducted under the tripartite mechanism, but in fact the Government gives out the plan and raises comments. With the establishment of the council, the system may be changed. Besides the parties mentioned above, the Council can invite participation from experts to review the plan in order to come up with a final plan together with clear analysis and interpretation.

 Thank you!

Item 2, Article 91 of Labor Act (revised): based upon minimum demand of workers and their families, the social and economic status and salary rate of the labor market, the Government will announce the regional minimum wage on the basis of reviewing the plan given out by the National Salary Advisory Council.

Article 92 of Labor Act (revised): “the National Salary Advisory Council is a consultancy entity to the Government, which is comprised of representatives of the Ministry of Labor, the Ministry of Labor, Invalids and Social Affairs, the Vietnam General Confederation of Labor and representatives of labor user at central level.

The Government clearly defines functions and obligations and structure of the National Salary Advisory Council”

Source: Vietnam Government Portal