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Int'l Cooperation

Last updated: Thursday, December 14, 2017

 

Vietnam, Japan Jointly Building Wage Calculation Mechanism

Posted: Thursday, August 10, 2017

The Ministry of Planning and Investment held its second biannual meeting to discuss and exchange seven groups of issues under the Vietnam-Japan Joint Initiative Phase VI in Hanoi on August 2, 2017.

One of the major issues raised by the Japanese side at the meeting was labour and wages. Mr Nguyen Tien Dang, Department of Labour Relations and Wages under the Ministry of Labour, Invalids and Social Affairs, said that the current issue is unclear minimum wage calculation methods. Although roadmaps are outlined, there are not enough fundamental database and minimum worker livelihood expense survey methods to have the ground for reasonable calculation.

The wage growth rate is far away from CPI growth and GDP growth. This affected business performance and development of enterprises investing in Vietnam.
He said, the definition of minimum wage has not been made clear to workers. Thus, disputes are likely to arise, even when employers pay higher than the minimum wage while the scope of annual wage increase is smaller than that of minimum wage hike or that of peers. As a result, employers will have to consult others when they consider raising wages in order to prevent labour disputes.

In order to address outstanding matters faced by businesses, Japan and Vietnam will discuss methods and procedures for determining the minimum wage. In addition, the both sides will clarify the definition of minimum wages (in accordance with the “wage definition” in Article 90 of the Labour Code) and make publicly available to workers. At the same time, they will publicise economic indicators and survey data used to reconsider the minimum wage. Vietnam and Japan will exchange ideas at the stages of the minimum wage review and law enforcement guiding documents.

In June, Prime Minister Nguyen Xuan Phuc visited Japan and attended the Vietnam Investment Promotion Conference in Japan where investment cooperation agreements were signed with a total value of up to US$22 billion. Mr Do Nhat Hoang, General Director of the Foreign Investment Agency (FIA) under the Ministry of Planning and Investment, said, investment and trade ties between Vietnam and Japan are increasingly developed in essence. Japanese investors are more confident about Vietnam’s investment environment. However, Vietnam still needs to further improve its investment environment to maintain and boost this good relationship.

Speaking at the meeting, Mr Nagai Katsuro, Minister, Embassy of Japan, emphasised that Vietnam-Japan cooperation has been strengthened over the past time. In particular, the issues raised at the Vietnam-Japan Joint Initiative Phase VI will be addressed as both sides work together actively.

In addition to the contents above, representatives of Vietnam-Japan Joint Initiative Working Groups discussed some other contents such as logistics - transportation services, support services for SMEs, some regulations for foreign investors in the Law on Investment, the Law on Enterprises, the Land Law and other laws relating to investment and business.

Nguyen Thanh








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