Workers assemble small-sized electric motors at the Japan-owned Mabuchi Motor Vietnam at the Bien Hoa II Industrial Park in Đong Nai Province (Photo: VNA)
Thecompanies don’t force the workers to resign but merely recommend it, and theworkers consent, making the practice perfectly legal. However, workers mightnot be aware that by doing so, they relinquish many of their rights, and someare urging authorities to get involved.
Nguyen ThiSen, 51, from Bien Hoa city of Dong Nai province, worked at Pouchen Vietnam – amanufacturing factory of the Taiwan-based sportswear company – for nearly 18years.
At theend of last year, the company announced that workers with tenure of 15 years orlonger may receive a lump sum equal to 12 months of salary if they quit.
Sen isstill four years from retirement age, and under the company’s policy, she wouldreceive one-month salary as a bonus every year.
However, thinking the one-time payment was a generous amount, Sen agreed to endher contract and social security, and received 140 million VND (6,160 USD).
“Now Iregret my decision. Previously, my monthly salary plus bonus was 10 million VND(440 USD), so my annual income would total 150 million VND (6,600 USD),including the New Year bonus,” Sen told Vietnam News Agency. “The governmentincreases the salary rate every year, if I continued to work at Pouchen untilretirement, then I could earn a total of 500 million VND (22,000 USD), inaddition to a nice pension. Now, I have no income, the lump sum will run outeventually.”
Sen saidshe tried to look for other jobs, but no one would hire someone her age.
Nguyen ThiHue, 47, also from Dong Nai province, worked at Changshin Vietnam for 20 yearsand earned a basic monthly salary of 9 million VND before ending her contractand receiving 150 million VND (6,600 USD). Afterwards, she intended to findanother job but was unable to do so.
“I’mcurrently living off my unemployment insurance but it’s ending soon, now I justwant to find a stable job, even 2-3 million VND (88-132 USD) salary a month,”Hue said.
Accordingto Pham Van Men, Director of the Dong Nai Social Security, manual labour is ademanding job and workers are exposed to toxins, which gradually damage theirhealth. When workers resign but fail to get another job, without access tohealth insurance, treatment costs can become a huge burden, Men said.
Dang TuanTu, Chairman of Changshin Vietnam’s trade union, said the union’s stanceremains that the workers should not resign. However, as both parties consentand no disputes arise from these premature resignations, unions cannotintervene.
Unionrepresentatives said they have tried to persuade workers to keep working untilthey reach retirement age, showing them the benefits and the downsides of earlycontract termination. However, it’s not easy to convince workers especially asthey don’t fully grasp the government’s insurance policy, they fear that socialsecurity premiums will soon soar.
Province-wide, in 2016, Dong Nai had 37,000 people registered for one-timeinsurance payment, while in just the first six months of 2017, the number stoodat 27,000.
Accordingto the job centre for the Southern region (headquartered in Bien Hoa city, DongNai), from May 2017, the number of applicants for unemployment insurancein the province witnessed a worrying jump, standing at 4,000-5,000 people amonth, most are long-time workers willingly leaving their companies when thecontracts have not expired nor have they reached retirement age.
Pouchen Vietnamsaid while the salary it pays to old workers increases, their productivityremains unchanged, if not lower, hurting profits. With its machine automationplan, the company expects to cut its current staff by 10 percent, or 2,000workers.
Thecompany estimates that in 2017, it will have to dole out 39 billion VND (1.72million USD) for insurance premium payments for employees.
Similarly, Changshin Vietnam, currently employing 26,000 workers, 3,900 ofwhich have worked for the company for more than 15 years, said by the end ofMay, 440 of these workers resigned and received the one-time payment (a totalof 90 billion VND or 3.96 million USD).
Accordingto the Management Board of Industrial Parks in Dong Nai province, the prematuretermination of contracts concerning long-time employees is “a new phenomenon,”and takes place mostly at manual labour factories.
Some other companies are considering followingsuit, including Epic Designers Vietnam Co. Ltd., the Japan-based machine partmanufacturer Mitsuba M-tech and the Republic of Korea’s footwear producerTaekwang Vina Industrial, among others.
Bigcompanies may be willing to part with large sums of money to oust long-timeemployees, while other small companies come up with ways to not use old workers.
Pham VanCuong, vice head of the management board, surmised the cause for thisphenomenon as the basic salary (per region) increasing annually, in addition topay rise policies in each company, while the productivity of senior workersdoes not improve, which makes businesses unwilling to keep long-term employees.
Cuongsaid that workers with a 15-year tenure and basic monthly salary of 10 million VND(440 USD) and above can have the same productivity as a new employee withstarting salary of 4 million VND (176 USD). From 2018, the social insurancepremium rate will be calculated based on worker’s gross salary, not the basicsalary level, so businesses are worried they will have to a lot of socialinsurance for long-time workers, cutting into their bottom line.
“Inaddition, manual labour like in textile industry requires little education, theworkers just need to be healthy and young, plus, the companies only need to paya much lower salary compared to senior ones,” Cuong added.
Vu Ngoc Ha, Director of the Legal Council forLabour Unions in Dong Nai, said there is little ground for legal interventionfor this kind of contract termination at present, but it can’t be surebusinesses will not resort to dirty tricks to oust long-time employees.
Accordingto Ha, Vietnam’s law covers all important aspects of labour relations, theissue is State oversight on the implementation of such laws.-VNA
VNA
