More state-owned enterprises find salary payment violations

HCM City authorities have found eight more wholly state-owned public-service companies in the city who are violating employee’s salary payment regulations.


On August 31, Huynh Thanh Khiet, Deputy Director of the municipal Department of Labour, Invalids and Social Affairs said, the cases of these eight firms came to light after the case in which leaders of four state-owned public-service firms in HCM City received a salary of VND2.6 billion per year (USD123,809).

He added that to legalise big salary payments for the employees, these companies use a trick by signing seasonal contracts of less than three months with employees who meet all conditions to sign long-term contracts.

The eight companies use their employee salary fund for bonuses for directors, deputy directors and chief accountants. Due to violations in signing contracts and salary calculations, many workers at these companies are not offered anything in terms of social and health insurance.

Regarding salaries given to the employees, Le Ngoc Thuy Trang, Head of Corporate Finance Board under the HCM City Department of Finance, said this is a blatant violation of the Labour Code.

According to Mrs. Trang, the enterprises’ salary fund includes the fund of the management board and workers. Under regulations, salary for managers is based on their positions, and they have no right to use the employees” salary fund.

The recent inspection showed that the leaders of four state-owed public service companies in HCM City have been accused of embezzlement of employees’ salaries.

At City Urban Drainage Company, Public Lighting Company, Saigon Traffic Construction Company and the Green Park Company, the average wage was VND22.2 million per month (USD1,000) while the figure at other state companies was only VND7.3 million. The case has caused public outrage.

While managers and regular employees collected average salaries, day-labourers and temporary employees were making much less.

Economist Pham Chi Lan said she does not understand how state management agencies can let this violation happen. This will affect people’s trust, particularly in the context of the current economic downturn.

The employees have been overpaid for a long time, but this was out of the control of management agencies, including those involved in taxation. It creates public doubt about the co-operation between the companies and authorities.

She added that lots of garment and textile companies achieved good business results, but the salaries of their managers account for just one third of the salaries of the managers of the four suspect firms.

Meanwhile, the Minister and Chairman of the Government Office,Vu Duc Dam, said the prime-minister’s salary is nearly VND15 million (USD714.2) per month and the level for leaders of economic groups is no more than VND36 million. Bonuses for them are not allowed to exceed VND10 million (USD476.2).

Lawyer Tran Cong Ly Tao, Deputy Head of HCM City Lawyers Association said the above-mentioned salaries for the employees show signa of criminal violation.

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