To identify additional salary sources for VNA to pay Vietnamese pilots

To identify additional salary sources for VNA to pay Vietnamese pilots
Trần Thanh Rin

What are the regulations on identifying additional salary sources for VNA to pay Vietnamese pilots? – Truong Duyen (Khanh Hoa)

Xác định nguồn tiền lương bổ sung để VNA trả cho phi công người Việt Nam

To identify additional salary sources for VNA to pay Vietnamese pilots (Internet image) 

Regarding this issue, LawNet would like to answer as follows:

On August 23, 2023, the Government issued Decree 64/2023/ND-CP supplementing Decree 87/2021/ND-CP amending Decree 20/2020/ND-CP on piloting labor management, salaries, and bonuses for a number of economic groups and state-owned corporations.

To identify additional salary sources for VNA to pay Vietnamese pilots

For the Parent Company - Vietnam Airlines Corporation (hereinafter referred to as VNA) after paying salaries to Vietnamese pilots working under labor contracts for VNA but whose salaries are lower than those of a foreign pilot working for VNA, the source of the additional salary to be paid to the Vietnamese pilot is determined as follows:

(The salary paid to the Vietnamese pilot working under the labor contract for VNA comes from the salary fund made by the employees and the Board of Management according to the provisions of Decree 20/2020/ND-CP and Clause 3, Clause 4, Article 2 of Decree 87/2021/ND-CP)

+ The maximum annual additional salary source is based on the difference between the pre-supplemented salary of the Vietnamese pilot and the salary level (including basic salary, flight hourly salary, and teaching hourly salary) of foreign pilots, calculated on average according to the group of positions in the same flight crew and the actual working time of the pilots.

+ The pre-additional salary of a Vietnamese pilot is the salary received from the annual salary fund, according to VNA's salary regulations.

The salary fund allocation is done annually to pay salaries to Vietnamese aircraft pilots; it is taken according to the ratio (%) between the actual salary in 2022 paid to Vietnamese aircraft pilots compared to the actual salary fund in 2022.

+ The determination of additional salary sources must be consistent with VNA's financial response capacity, ensuring VNA completes the planned profit target assigned annually by the Committee for Management of State Capital at Enterprises (If VNA makes a loss, it must reduce the loss compared to the previous year's performance).

+ Additional salary sources are accounted for in VNA's production and business costs according to the provisions of law and used to pay the Vietnamese pilot who is working under a labor contract for VNA at the time of the additional salary payment, not to be paid to other subjects or used for other purposes.

The payment of additional salary to a Vietnamese pilot is based on the pilot's title and actual working time according to VNA's regulations.

Decree 64/2023/ND-CP takes effect on August 23, 2023, and the addition of salary sources according to the above regulations will be implemented on January 1, 2023.

Labor, salary and bonus management rules for some state corporations in Vietnam

Labor, salary and bonus management rules for some state corporations in Vietnam include:

-  Companies shall introduce their own policies on recruitment and use of labor, salary and bonus in accordance with applicable laws and the company’s Charter.

- Salaries and bonuses awarded to employees, General Directors, Deputy General Directors, Chief Accountants, members of Boards of Members, members of Management Boards, heads of Control Boards and comptrollers shall be associated with the productivity, business or production effectiveness of companies.

- Labor, salary, remuneration and bonuses in wholly state-owned companies shall be managed by the Government according to regulations on assignment of tasks and responsibilities to the owner’s representative agencies and direct representatives in companies;

With regard to joint-stock companies, the owner’s representative agencies shall, pursuant to Decree 20/2020/ND-CP, direct the representatives of state capital invested in such companies to attend and vote on these matters at meetings of the Management Boards or General Meetings of Shareholders.

(Article 3 of Decree 20/2020/ND-CP)

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