Vietnam Factory Workers in Rare Strike to Protest New Insurance Law

2015-03-31
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Workers strike at the Pou Yuen factory in Ho Chi Minh City, March 31, 2015.
Workers strike at the Pou Yuen factory in Ho Chi Minh City, March 31, 2015.
Photo courtesy of Mywork.com.vn

Thousands of textile workers at a Chinese-owned factory in southern Vietnam held a fifth day of strikes Tuesday to protest a government policy on social insurance coverage, in a rare demonstration in the tightly-controlled communist nation.

The strike at the Pou Yuen Vietnam footwear factory at the Tan Tao Industrial Park outside of Ho Chi Minh City began on March 26, when as many as 90,000 employees protested the new law, which prohibits workers from collecting a lump-sum payment of the insurance if they resign.

On Tuesday, the strike continued at the factory—which makes shoes for companies, including Adidas and Nike, as well as for brands such as Converse and Reebok—with thousands of employees gathering inside and outside of the facility and refusing to work, according to sources.

Lawyer Le Thi Cong Nhan of Viet Labor, a local civil society group which is unrecognized by the government, called the new law, which goes into effect on Jan. 1, 2016, “a step back in the rights of the workers.”

“In the past, the workers had two choices: They could either take out a lump sum once and for all [when they resign] or they could wait until their retirement age, but now [the government] won’t allow that,” she told RFA’s Vietnamese Service.

“The problem here is the right to choose, which has to do with each individual’s situation. The explanation given by the government is not right because only the workers know what is right for them.”

Workers told RFA that they believe the provision forcing them to wait until retirement age—60 for men and 55 for women—to collect their insurance payments indicates the fund may have been used by the government for bad investments, and was part of a bid to buy time to make up for the losses.

Labor minister Le Bach Hong told RFA that the workers are protesting because they do not understand the new law.

“They are on strike because they don’t understand that this government policy seeks to ensure their long-term benefits,” he said, adding that the company had given the workers a day off on Tuesday so that a Ministry of Labor representative could explain the law to them.

The official Tuoitre news agency quoted deputy Minister of Labor, War Invalids, and Social Affairs Doan Mau Diep as saying that the new law aims to encourage workers to accumulate their payments of social insurance so that they can receive pensions when they retire, instead of receiving lump-sum payments after each time they quit a job.

However, he said the ministry will listen to the opinions of workers and take them into account during the preparation of guidance on the implementation of the law.

Insurance deductions

A worker told RFA that in addition to anger over the new law, Pou Yuen had also continued to deduct money from workers’ salaries for insurance over the past three months, but failed to pay it to the state insurance agency.

“Neither Pou Yuen nor the insurance agency wants to take responsibility [for these deductions],” he said.

“We heard the insurance agency claim that Pou Yuen did not provide insurance payments for the workers over the last three months, but Pou Yuen denied it. Then why have our salaries been deducted for insurance?”

Pou Yuen is controlled by Chinese shoemaker Yue Yuen Industrial Holdings Ltd., a subsidiary of Taiwan-listed Pou Chen Corp.

Reuters news agency cited Pou Chen Corp. in Taiwan as calling for a swift resolution to the dispute, adding that the strike concerned government policy and it had no authority to intervene beyond facilitating dialogue.

A company representative told Reuters the firm had temporarily moved some operations to other Vietnamese factories it ran and the strike "had not caused a large material impact."

Earlier actions

Tuesday’s protests marked the fifth day of unrest by workers at the Pou Yuen factory, despite calls from their employer to remain calm while the company sought an explanation from the government regarding implementation of the new law.

On Monday, thousands of workers refused to return to their jobs after a local labor official met with them to explain the policy and marched around the factory, spilling out onto nearby roads and blocking traffic.

Strikes and protests are rare in one-party communist Vietnam, which is known for taking a hard line with unrest that has affected other textile manufacturing rivals like China and Cambodia.

Lawyer Nhan stressed that the strike was not the result of a conflict between workers and employers, but because of the change to the law.

“Workers now understand [their rights] and are more active,” she said.

“Now, they pay more attention to political issues, which are also related to law. They now know how to take to the street immediately after changes take place from above and are unwilling to wait until the changes affect them on an individual basis.”

Reported by Mac Lam for RFA’s Vietnamese Service. Written in English by Joshua Lipes.

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