A new proposal for Labor Code amendments to bring down the weekly working hours from 48 to 44 has been rejected mainly owing to lack of practicality.
Many from Vietnam’s garment and footwear sector feel that the workers will be biggest losers if the regulation is introduced – especially those who are paid for every product made or those who work on an hourly basis.
More on the same, Diep Thanh Kiet, Shoes and Leather Association, HCMC, said “The working hours can be reduced only when Vietnam’s income per capita amounts to at least US $ 4,000 annually, and that too with clearly devised plans involving workers, factories and Government.
He was addressing a workshop on draft amendments to the Labor Code in HCMC on 23 August.
One should also note that if working hours are reduced, foreign investors and buyers of Vietnamese products may shy away from doing production activities in Vietnam.
Conforming to what Kiet said, Truong Van Cap, Vietnam Textile and Apparel Association (VITAS) said, “Vietnam is following developed countries where wages are hiked and working hours are reduced. But Vietnam’s income per capita is ranked 131st globally and, therefore, reducing weekly working hours is not practical. Companies need to either employ more people or increase working hours.”
Nguyen Ngoc No, Head of Personnel, United Sweetheart Garment Vietnam, added “If working hours are brought down to 44 hours, a footwear firm with 17,000 labourers would need to ask their workers to increase productivity, creating an additional cost of VND216 billion or a 3.6 per cent increase in product costs. Also, if it decides to add more workers, it will need 1,764 more people and VND186 billion as additional funds to pay salaries, resulting in product costs increasing by 3.4 per cent.”
There is also uncertainity whether the working hours will be further reduced in future making it difficult for companies to devise business strategies.