Research on salary payment by rank and job position

That is an important content mentioned by Deputy Prime Minister Vuong Dinh Hue - Head of the Central Steering Committee on salary reform, social insurance and allowances for people with meritorious services during a working session with the International Labor Organization (ILO) Office in Vietnam on the afternoon of November 8.

According to Deputy Prime Minister Vuong Dinh Hue, the Vietnamese Government is currently developing a Project on reforming wage and social insurance policies. It is expected that this project will be reviewed and approved by the Party Central Committee in May 2018.

This is a very difficult and wide-ranging field. The project covers the public sector, areas within the State organization, the production sector (both State-owned and private enterprises), and is related to social insurance policies - one of the pillars of social security. This is also a very sensitive issue because it involves almost all people of working age as well as retired people.

Deputy Prime Minister Vuong Dinh Hue speaks at a working session with the ILO in Vietnam. Photo: VGP/Nhat Bac

Therefore, the Steering Committee wishes to update information, experience and recommendations from international experts to develop the Project on Salary Reform, Social Insurance and Allowances for Meritorious People, helping the Party and State to promulgate policies and guidelines for salary reform and social insurance in Vietnam according to market signals.

At the working session, Dr. Chang-Hee Lee, Director of the ILO Office, assessed that wage and social insurance policies are key policies that have an impact on development, encouraging dynamism and creativity for each worker, each enterprise and the whole country.

“Therefore, not only in Vietnam but also in other countries around the world, this is a policy that always causes a lot of controversy. It is very difficult for the Government, unions and employers to reach consensus,” Dr. Chang-Hee Lee emphasized.

Mr. Chang-Hee Lee congratulated the Central Committee of the Communist Party of Vietnam for issuing Resolutions 18 and 19, which provide very clear directions and guidelines for reforming public institutions, including management and salary issues.

According to Mr. Chang-Hee Lee, minimum wages have only a limited function in some areas of the market economy. Collective bargaining between workers and trade unions is the key process to determine real wages and other working conditions depending on the specific requirements of each enterprise.

In Vietnam, collective bargaining is not yet developed, while the requirement of the Vietnam-EU Free Trade Agreement is that the ILO Convention, Convention 98, must be ratified. This is a factor to promote bargaining, thereby promoting the issue of establishing wage negotiations in a market economy.

Photo: VGP/Nhat Bac

Mr. Chang-Hee Lee pointed out that it is necessary to further improve wage statistics and further strengthen the capacity of the secretariat to assist the National Wage Council so that this department has better capacity to monitor and evaluate the impact of minimum wages and between wages and employment.

The Director of the ILO Vietnam Office also recommended that there should be a formula to estimate minimum wage adjustments or agree on the parameters in those formulas, so that the determination and setting of minimum wage adjustments can be predicted in advance.

Regarding social insurance policy, ILO experts recommend that Vietnam should make changes step by step, avoid sudden changes, and increase the expansion of social insurance coverage.

Appreciating the ILO's recommendations in Vietnam, Deputy Prime Minister Vuong Dinh Hue said these recommendations will help Vietnam's policy-making agencies in the coming time.

The Deputy Prime Minister requested the ILO to continue to make specific proposals related to the issue of wages, especially salary payment according to rank and position with principles and implementation methods; provide documents on salary models and social insurance of some countries for Vietnam to refer to; and closely coordinate with Vietnamese agencies in discussing and supporting related issues.

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According to Thanh Chung/chinhphu.vn