Vietnam - Waging a new war against low salaries

Vietnam’s new minimum salary regulations will put a smile on blue-collar workers’ faces.

The latest draft of the Labour Code’s Article 88, scrutinised by the 13th National Assembly, outlines the minimum salary on an hourly, daily, weekly and monthly basis, with calculations based on geographical areas and different jobs.

The government is also tasked with fine tuning the minimum salary based on consumer price index (CPI) movements, with a revision determined by the National Salary Council. The minimum salary must ensure workers’ minimum living standards, based on the CPI of each geographical area.

These new regulations have received the thumbs-up from the top law-making body’s Standing Committee. The draft code revision is expected to be officially adopted during the 13th National Assembly’s third session, to begin next month.

At present, under Decree 70/2011/ND-CP dated August 22, 2011 factory workers’ minimum salaries are based on four regions. The salary for region 1, including big cities like Hanoi and Ho Chi Minh City, is VND2 million ($96.1) a month. The thresholds for regions 2, 3 and 4 are VND1.78 million ($85.57), VND1.55 million ($74.5) and VND1.4 million ($67.3), respectively. The decree took effect on October 1, 2011.

“Minimum wages are there to ensure that employees are guaranteed a minimum wage, but are allowed to choose where and who to work for, so each employee has that right to decide,” said EuroCham’s Human Resources and Training Committee chairwoman Nicola Connolly.

However, the Vietnam General Confederation of Labour said the current salary regime met just 60 per cent of workers’ minimum daily expenses. Dang Quang Dieu, head of the Ministry of Labour, Invalids and Social Affairs’ (MoLISA) Institute of Workers and Trade Union, said the minimum salary was always lower than minimum living standards.

“Thus, the government needs to issue indexes with minimum living standards for localities, so that the new minimum salary regulations can be applied effectively,” Dieu said. Ngo Sy Bich, head of Bac Ninh province’s Industrial Park Authority, said the changes were overdue as the current minimum salary was often used by employers to pay workers. However, coupled with inflation increases, employers were often left out of pocket if they raised salaries. “But, if employers don’t pay their workers based on the CPI increase, they will suffer from worker shortages and even strikes,” Bich said.

The MoLISA reported Vietnam witnessed 4,142 strikes from 1995 to 2011 and the number of strikes tended to rise particularly from 2006, with 390 strikes, to 551 in 2007 and 720 in 2008. The number of strikes in last year’s first 11 months was 857, double that of 2010. Eighty per cent of the strikes were caused by low salaries and allowances, the MoLISA said.

Thanh Tung | vir.com.vn

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