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Garment workers’ welfare gaining momentum in Vietnam

by Apparel Resources

13-September-2018  |  8 mins read

The garment and textile industry in Vietnam foresees an export turnover of US $ 18.5 billion in the second half of 2018 and if this happens, then it will help the industry achieve the projected target of US $ 35 billion before the year ends. The growth of the industry in Vietnam has, indeed, been amazing especially over the last decade and that’s the reason most of the industry experts are today optimistic of Vietnam achieving the export target of US $ 200 billion by 2035.

But then, does the garment and textile industry in Vietnam understand the needs and concerns of its workers who constitute the backbone of the industry? Any thriving industry needs to realise this and invest significantly in improving the welfare of the workers so as to develop and sustain a productive and quality workforce. It is today a big part of every company’s business strategy.

Safety of the workers, food and transportation and providing minimum wage are norms in the industry today and every company is expected to provide the same to its workforce; it is something beyond that is required. With a lot of companies considering welfare schemes for some time now, Team Apparel Online (AO) discovered that the momentum has gained pace in recent years.

Overtime and zero overtime

While some companies endorsed the concept of ‘zero overtime’ to ensure that all the workers go back home on time, there were others who ensured that workers earned well through overtime. The objective in both the cases, however, was to provide better life to the garment workers.

After the successful implementation of ‘zero overtime’ in one of its factories in North Vietnam, Esquel Garment Manufacturing (Vietnam) Co., Ltd., is determined to make it happen in its other factories as well. So, how do the garment workers endorse this? “Yes, we pay our workers very well and they never feel the requirement for doing overtime. People’s sustainability is important and so if we ask people to work for 10 hours, how long will they sustain?” reasoned Kent Teh, Director of Garment Manufacturing, Esquel Garment Manufacturing (Vietnam) Co., Ltd.

Kent Teh, Director of Garment Manufacturing, Esquel Garment Manufacturing (Vietnam) Co., Ltd

Like Esquel Group, Nhabe Corporation is another big establishment which also recognised the concept of ‘zero overtime’ more than three years ago; however, it believes that the implementation of this concept is possible only with good planning. “Only way it can be achieved is if the factories are well organised and most importantly, the factories must have full employment. Our complex has 4,500 workers and we have 97 per cent attendance every day. For me, that’s full employment and when there is full employment, zero overtime can be achieved,” said Michael Laskau, Managing Director, FOB Division, Nhabe Corporation (NBC). Here it is important to note that Nhabe had an annual export turnover of US $ 251 million in 2009 and in less than a decade, it almost touched a remarkable US $ 800 million in 2017.

Premco Global Vietnam, manufacturer of woven and knitted elastics, too agrees with this concept but it believes that people in Vietnam are young and eager to make a lot of money which is a good enough reason for them to work in FDI companies like Premco. The message that comes from the higher management of most of the FDI enterprises in Vietnam is to hire less people and give more overtime and that’s because there is willingness in the people to work. Premco, therefore, supports overtime like quite a few other companies. Either ways, the intent of the companies is to enhance workers’ welfare.

Health and social insurance

Many companies have now made healthcare of the workers mandatory in their business policies. Wunderlabel, that makes customised woven labels and printed labels, has expressed its intent to provide health insurance to its employees soon. It’s fast becoming a norm and there are no two ways about it. When AO had met Upul Pathirana, General Director, Head of Operations, Epic Designers Vietnam Limited, few months back, he had spoken about his company’s initiatives especially with regard to healthcare facilities. “We not only get the eyes of our workers tested but also provide them free spectacles. There is nothing bigger than health and we therefore ensure that each of them has health insurance coverage,” averred Upul.

If there is an increase in social insurance coverage, it would boost employee morale and will enhance their productivity and daily delivery. The social protection floor means each member of the society will be protected in terms of healthcare, and basic income security for children, and for people who are in active age but are unable to earn sufficiently, and the elderly.

This was strongly conveyed by Vu Duc Dam, Deputy Prime Minister, at a recent workshop organised by ILO and Ministry of Labour, Invalids and Social Affairs (MoLISA). Social insurance needs to be worked upon seriously by companies. “Apart from the routine medical check-ups for employees, we also pay social insurance, which I have heard some local companies avoid. It’s a big amount, but it will make the life of employees easier when they leave. More companies should be doing this,” stated Kamal Mangwani, Vice General Director, Premco Global Vietnam.

Kamal Mangwani, Vice General Director, Premco Global Vietnam

It is worth noting here that Vietnam has set the target of having 50 per cent of its workforce (across all industries) covered by social insurance by 2020. In comparison, only 24 per cent of Vietnamese workers, or over 13 million people, have joined the system to date. Also, nearly 3 million old-aged people now have pensions.

Empowered and motivated workers give better efficiency and productivity, and productive workers help the economy of the nation to grow.