Compulsory Social Insurance for Labourers?

Labour relations has become an issue which has begun to attract more attention from enterprises. It has also been increasingly disputed. Over the past number of years, VCCI has promoted its co-operation with relevant agencies to discuss the issues with enterprises. Vu Tien Loc, president of VCCI, affirmed that the quality of the labour force would determine enterprises’ competitiveness and that labour relations was a decisive factor in the quality of the labour force. Nguyen Hoa Binh, vice president of VGCL, said that apart from profitable enterprises with a good labour relations, in many enterprises, labourers’ interests are not yet assured. Binh said he hoped that VCCI, MOLISA and VGLC would develop more programmes to help enterprises settle emerging issues.

 

At present, there are some urgent issues relating to labour relations, such as worker recruitment, wage, insurance and working time. These have become disputed issues recently. According to statistics from MOLISA, in the past five years, there were 800 strikes nationwide. Le Duy Dong, deputy minister of MOLISA, said that to create an open mechanism for all enterprises, in October, MOLISA would ask for enterprises’ comments and inputs about the draft Law of Social Insurance, and in next year, MOLISA would submit three laws to the National Assembly, the Law on Vocational Training, the Law on Labour Export and the Law on Strikes. These will be important issues, relating to enterprises’ activities.

 

At the meeting, most participants focused on the draft Law on Social Insurance with an urgent issue about whether workers should compulsorily pay social insurance costs or not. Representatives of most enterprises said that for seasonal workers, who worked for enterprises for between four and five months, enterprises could not ask them to pay social insurance as the workers did not want to. However, if enterprises do not pay social insurance costs for their workers after three months, they will be considered in violation of the law. On the contrary, if enterprises pay all social insurance costs for their workers, total costs they have to pay for their workers will be huge. The difficult issue for enterprises is how to pay wages to their workers while still satisfying insurance agencies. 

 

Answering the question, Pham Do Nhat Tan, deputy head of the Department of Labour Management with Foreign Countries, MOLISA, said that the chief target of the social insurance service was social security. With social insurance services, around 40 million workers today will receive pensions, which can secure their life after retirement. Young workers do not pay much attention to their future old-age, while elderly people must think about how they will live. At present, over 10 million workers pay social insurance costs compulsorily. The Government is not sure about measures to ensure life for around 30 million workers, who do not pay social insurance costs. The draft Law on Social Insurance will cover the entire labour force, regardless of labour relations, for social security. Tan stressed that paying social insurance costs, workers could change their workplace in a flexible manner. For example, a worker may suspend their social insurance service for a certain period of time or may move to another workplace or organisation, social insurance agencies would calculate times of his or her social insurance cost payment.

Enterprises and managers have not found a common language about the issue yet as one side cannot ask workers to pay social insurance costs while the other focuses on social security only, considering it a target that the draft Law on Social Insurance should cover.

I think that social insurance payment should be divided into different scales for workers to select their payment, suitable with their incomes and demand. So, workers would benefit from what they pay. If social insurance payment is calculated based on percentage of wage, there should be different scales, suitable with each kind of enterprise.

Regarding the minimum wage, I think it is unnecessarily calculated based on the budget but on wage increase capability of enterprises. This is because during international integration, Vietnamese enterprises have to compete with rivals in many other countries, in which the prices of goods and labour depend only on the demand and supply rule but not the Vietnamese Government’s decisions.

 

The State stipulates that enterprises have to pay social insurance costs if they sign contracts with workers for three months or longer. However, workers do not want to pay insurance costs. In that case, if we pay workers wages plus another amount as social insurance, our products will be unable to compete in the market because of high production costs. If we cut workers’ wages to pay social insurance costs, workers will leave to work for private production establishments. How can we keep them with us? We have organised many meetings, even invited officials from trade unions to meet our workers but they said that they would not accept lower wages for social insurance payment. We may not be able to pay our workers high wages plus social insurance costs. Should workers be allowed to pay social insurance costs voluntarily?

 

There should be organisations to train workers for enterprises, a representative from the Barotex Shoes Factory

We have to train most of our workers by ourselves, and after only three months our workers cannot do their jobs well. It takes them at least one year. We have to pay wages for those who are named on our payroll and social insurance agencies stipulate that we may violate the law if we do not sign contracts after three months. This is one of our difficulties. Even though we have to train our workers by ourselves, we have to sign contracts and pay wages for them. It is difficult for us to pay social insurance costs as asked by social insurance agencies because workers have yet to reach grade one, so they cannot pay social insurance costs. Enterprises, in turn, are not yet profitable enough to pay social insurance costs for their workers. So, we suggest that workers who have worked for at least 12 consecutive months should decide whether to pay social insurance costs or not.

Regarding vocational training, it is stipulated that enterprises can train their workers by themselves. However, enterprises cannot get money from their workers and have to pay for their workers’ training. So, enterprises cannot get their money back if workers leave during their training. Should the Government focus on training workers for enterprises or receive training orders from enterprises, enterprises would be able to use their workers immediately when they recruit them.