Vietnam - Employers evade social welfare policies

A number of Vietnamese workers are facing challenges due to rising unemployment and inflation.

Pham Minh Huan, Deputy Minister of Labour, Invalids and Social Affairs (MoLISA), told DTiNews in a recent interview that currently many enterprises have not lived up to social welfare obligations for their workers.

In many places, a lot of workers work for companies without having a labour contract, let alone benefit from any benefits in cases of unemployment. What have the MoLISA and relevant agencies done to deal with the situation?

This is a problem throughout the business community in Vietnam. One of the reasons is that the majority of businesses are small to medium-sized. At the same time, most untrained workers or day-labourers are not educated about their rights as workers, or the procedures to claim unemployment benefits.

The ministry has been intensifying its oversight and enforcement of the policies that regulate businesses in this area. It has also made increasing efforts to heighten awareness among businesses about the benefits of respecting their workers' rights, which is also beneficial to the employers.

On the other hand, workers also have a responsibility to educate themselves about labour law and to negotiate effectively with employers. Trade unions should take a larger role in this process.

The Government efforts to create a good business environment is a large part of this, because it will create more jobs and improve job security along with corporate sustainability.

Workers are also facing the problem of inflation, particularly with food prices. Wages have not kept up with rising living costs. What is your opinion on this issue?

The Government raised minimum wages in four regions nationwide since the third quarter of 2011. This was aimed at meant to improve the living standards of workers in the context of high inflation.

Still, as I said before, the majority of businesses in this country are small to medium-sized. Many of them have low productivity and find it difficult to pay high wages. Some even struggle to pay the minimum wage.

The issue now is to balance the interests of businesses and those of workers. There will be no increase in the minimum wage this year. However, in the third quarter of 2012, the ministry will begin a study for wage increases in the following year.

Since the beginning of this year, the national unemployment rate has been increasing, while, at the same time, a number of companies have been going bankrupt, cut back or halted operations entirely. What has the ministry done to address this issue?

The ministry has requested that the Department of Employment increase its oversight of the labour market in order to make forward-looking changes that will support struggling workers.

Currently, the country has over 500,000 private enterprises, most of which are small to medium-sized. Many of these businesses are also struggling in a difficult economic climate.

However, several big cities have seen increasing numbers of new businesses, and development in investment projects. This has created more jobs. Many of the workers you refer to are waiting for better opportunities to come, and are not unemployable or unable to find jobs.

Actually, statistics show that the number of bankrupt enterprises is much higher than the newly-established companies. Do you have any comment on this situation?

There are both good and bad signs to be seen in the economy. According to the Ministry of Planning and Investment, the country has attracted more foreign invested projects. Several investment projects maintain stable operations. Nike Vietnam is a good example, which provides jobs to over 200,000 nationwide.

The Government has been continuing to make policies which will encourage development of business. This will, in turn, help prop up the job market.

In bankruptcy cases, it is essential that companies protect their workers benefits. Currently we are seeing a rise in applications for unemployment benefits.

You mentioned the rising number of people who are claiming unemployment benefits. Do you think that there is a chance that the fund could be exhausted anytime soon?

That is highly improbable. This is a short-term insurance programme that is often adjusted every year or two. If collection for the fund is higher than spending, authorities might decide to decrease the contributions required from workers. In the opposite case, employees may be asked to pay more. This continual reevaluation helps to smooth out operations.

Thanh Tram | dtinews.vn

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