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Committee IV needs to identify the Covid-19 pandemicas a force majeure event. Photo: Internet

Proposal on exempting trade union fees in 2020

This is a remarkable content in the dispatch to the Ministry of Planning and Investment (MPI) proposingsupplements to the draft resolution on supporting businesses affected by the Covid-19 pandemic of Committee IV under the Government’s Advisory Council on reforming administrative procedures.

Regarding the draft resolution that will be submitted to the Government by the MPI "On the tasks and solutions to continue removing difficulties for production and business, promoting disbursement of public investment and ensuring social security and order during the Covid-19 pandemic”, recently, Committee IV and a number of business associations have proposed the Ministry of Planning and Investment consider and supplement some urgent contents to support businesses to keep capital flows to maintain production, business and employment for workers before irrecoverable exhaustions and collapses.

First of all, Committee IV has proposed the exemption of trade union fees in 2020. The representative of the Committee IV said that under the Prime Minister's Directive 11, March 25, 2020, the Vietnam General Confederation of Labour issued the official letter No. 245 / TLĐ guiding businesses to implement policies allowing delay of payment of trade union fees (equal to 2% of the salary fund) in the first six months of 2020 for businesses with half theiremployeessubject to social insurancewho are forced to quit their jobs.

However, through large-scale surveys of businesses and exchanges with business associations, few firms have implemented this policy for two main reasons.

Firstly, although businesses are struggling asproduction and business chains are broken due tothe pandemic, many sectors have facedalmost zero revenues for a long time but still try to maintain production, assign shifts and pay minimum wages to stabilize the lives of employees as well as reduce the burden and recruitment costs for businesses. Therefore, businesses hardly meet the criteria that "50% of the employees subject to social insurance who are forced to quit their jobs" despite the difficult situation.

Secondly, proving damage to both people and property is very complicated and requires cumbersome administrative procedures, especially for businesses withmany workers such as textiles, footwear, and transportation of goods viatrucks, logistics, tourism and aviation. If they cut only 20% of labour, tens or even hundreds of thousands of employees lose their jobs.

"On the other hand, businesses said if they had to retire 50% of employees paying social insurance, it means they would bein exhaustion" and would be unable to arrange financesto pay for fees as above. Therefore, the policy of delaying payment of trade union fees for a few months in 2020 does not seem to achieve the goal of supporting businesses to overcome difficulties by the pandemic as hopedby the Vietnam General Confederation of Labour, the official letter of Committee IV stated.

Committee IV and associations proposed to the MPI to discuss with the Vietnam General Confederation of Labour to submit to the Government (and submit to the National Assembly if it is under the National Assembly's decision) a plan to allow businesses to exempt trade union fees in 2020.

"This policy will be a great support measure for businesses in terms of maintaining capital flows as well as reducing time and costs for administrative procedures, while also demonstrating the spirit." Vietnam Trade Union accompanies businesses and the Government "as stated in the official letter 245 / TLĐ," the official letter said.

Need to identify Covid-19 pandemic as a force majeure event

Secondly, Committee IV proposes delaying payment of social insurance and other compulsory insurance by December 31, 2020. Committee IV’s official letter said that on March 17, 2020, Vietnam Social Insurance also issued Official Letter No. 860 / BHXH-BT to implement Prime Minister's Directive 11, allowing businesses to suspend payment to the death fund and retirement fund in 12 months if businesses have “the number of employees participating in social insurance who are forced to temporarily quit their jobs from 50% of the total number of employees present before suspending production, business or more, or are damaged more than50% of total asset value caused by the disease”.

According to the representative of Board IV, as well as the trade union policy, this is also the policy businesses cannot implement, especially proving for property damages, because it is very difficult to have specific criteria and measures for businesses to make dossiersand it takes a long time to verify asmany damages have not been expressed during the pandemic but after the pandemic (inventory, contracts are delayed and cancelled in indefinite term, disruptions caused by breaking of production chains).

In addition, social insurance and other compulsory insurance premiums are making up a significant proportion of the businesses’ cash funds. To helpbusinesses maintain cash flows, focus on recovering production and business, spending on workers to stabilize their lives, associations and businesses have proposed and expected sharing from the State by the policy allowing delay in payment of social insurance and other compulsory insurance premiums until December 31,2020. This will be one of the most important policies to bring resources for businesses in this extremely difficult context.

In addition to above proposals, Committee IV has also proposed the MPI to add the content "the Government should identify the Covid-19 pandemic as a force majeure event" in the "Implementation Principle" of the draft resolution on supporting businesses affected by the Covid-19 pandemic to unify understanding to the parties and avoid disputes arising in related agreements.

According to Committee IV, it is because many businesses have signed contracts before the pandemic and there is a risk of losing the entire deposit orpaid amount if this pandemic is not identified as a force majeure event.

Specifically, tourism businesses are at risk of losing their depositsfor tickets for whole year in 2020 withsome domestic airlines because those airlines do not have flights and cancel flights but retain deposits and do not refund them immediately.

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Many businesses in other industries have signed lease contracts of offices and are negotiatinglessors discounts of rental fees, but many lessorshave not accepted because in the contract, only "force majeure" events are taken into consideration.

Similarly, many businesses that have signed contracts to hire meeting servicesare now in danger of failure to getting back deposits.