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Tet bonus is really part of wage

Update: November, 28/2013 - 09:55

Tong Thi Minh, director general of the Ministry of Labour, Invalids and Social Affairs' salary department, spoke with newspaper Hai quan (Customs) about whether the festive bonus should be legalised.

Tet bonuses vary according to the industry and Government agencies and is subject to budget constraints. Does Viet Nam have any legal mechanisms or policies on Tet bonuses?

Principally speaking, the Tet bonus must not exceed 30 per cent of the monthly wage. If any company gives the Tet bonus to their employees, that is how they structure their worker's income in that year.

In the past, the Tet bonus was only awarded to those who had excelled in their performance. But in recent years, it has become more common with almost everyone receiving bonuses for the Lunar New Year.

That's why it cannot be interpreted as a bonus. Instead, it is part of the accumulated wage for the whole 12 months. Under the Labour Law, there is a chapter about remuneration and awards.

However, the annual award for workers has not been enshrined in law. This is a key reason why the tet bonus varies from one company to another, depending the employer's budget capacity.

As a PR stunt, some companies will boast about giving big bonuses to their workers. However, in reality, the real sum will be meagre. But, in such a case, we can't do any thing about it.

In my opinion, it is unlikely that we will be able regulate the Tet bonus in an official legal document as it would be very difficult to enforce across the vast range of industries and sectors.

For profitable companies, awarding bonuses is not a critical concern. However, it has been a tough time for Vietnamese companies in recent years with many challenges, with many on the edge of bankruptcy. Tet bonuses have become a burden for them.

For foreign invested companies, I don't think we can force employers to give Tet bonuses to their workers. It is a matter between the employers and employees. Their final decisions are confidential.

More recently, there has been a rumour that the Tet bonus will be legalised and be set at around 15 months salary. What's your reaction to this claim?

In my opinion, giving Tet bonuses is an issue that needs more consideration. It can't be legalised immediately.

To legalise something takes a lot of work; including surveys and research. Of course, such a decision must satisfy both parties - the employer and employees.

I myself always support higher pay for employees. But it is not the right time to legalise tet bonuses.

If we look at what has been practised over the past few years, employees still receive bonuses for the Lunar New Year.

Additionally, there is a comprehensive system of legal documents protecting employee salaries. What's more important, is that both employers and employees comply with legal documents and justify pay rises for workers.

There is no question, wages are based on a salary scale enshrined in the law. but bonuses are often based on performance and agreed upon by the two parties.

What do you think about the bonus for the 2014 Lunar New Year Festival?

In previous years, enterprises often sent us their bonus plans.

For the 2014 Tet bonus, I think it can be categorised into three groups: generous bonuses comprising hundreds of millions of dong; average bonuses and no bonuses at all.

As I have mentioned above, there is no legal document forcing the employers to give tet bonuses to their employees. It all depends on their willingness to pay and financial capacity.

Currently, employers decide whether to give Tet bonuses to their employees. As a result, employees don't have a say in this decision. What is your view on this?

Tet bonuses are a custom, not an entitlement. Be it a big or small bonus, it is a sign of gratitude to employees for their work and encouragement to perform well in the new year.

The fairness of giving awards to employees is a very important issue for the employers to think about.

Do you think the Ministry of Labour, Invalids and Social Affairs will adopt any special policies to support workers in the upcoming Tet season?

Up to now the government has issued an instruction for workers of bankrupt companies to receive their wages for work they have completed.

For those which are still operating, but not at a full steam, it is a matter of negotiating between the employers and employees.

However, in the case of those working at enterprises where employers have fled or failed to pay worker salaries, the government has asked local governments to use local budgets to subsidise outstanding worker payments.

Salaries of employees and management of the enterprises must be disclosed, under the law. Only by doing so, will the salaries and bonuses of employees be increased. — VNS


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