Employees and employers must “share in the same boat”

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Nguyen Xuan Duong, General Director of Hung Yen Garment, Chairman of Hung Yen Business Association

The draft Labour Code (revised) now extends the agreement framework of overtime and proposes an option for overtime payment, which will be calculated on a progressive basis for the overtime hours of the day, what do you think about this change?

Compared to other countries competing in labour with Vietnam such as the ASEAN countries, the total number of hours of overtime work in Vietnam is limited (200 hours), which is much lower than Thailand 1,836 hours, Malaysia 1,248 hours, the Philippines 1,224 hours, Indonesia 714 hours, China (432 hours), Bangladesh (408 hours) and India (300 hours). Regulations on low overtime hours affect Vietnam's labour competitiveness greatly compared to other countries. Notably, the maximum overtime hours of Vietnamese workers are also low (Cambodia and the Philippines do not control maximum overtime hours, Indonesia is 56 hours per month; Singapore is 72 hours per month; Thailand 36 hours per week, Malaysia 104 hours per month, Laos 45 hours per month). Thus, the proposal on increase the overtime of Vietnam is in line with the general trend of countries in the region and the world.

The reality of some textile enterprises shows many orders of enterprises have been canceled due to violations of conditions for overtime. Most textile and garment enterprises are processing ones, relying heavily on partners such as waiting for raw materials, so it is difficult to get the right time. Enterprises are reluctant to work overtime because overtime makes enterprises lose more management costs and pay higher wages than regular hours. Therefore, the increase of overtime hours is good for enterprises. If 400 hours per year is still kept, the monthly overtime ceiling should be removed, because enterprises do not need to work overtime every month, we only need to work overtime in peak months, and the months of the season, there is no need in other months. For example, the law should allow us to work overtime up to 80 hours per month to keep up with orders, we don't need to work overtime in other months, and overtime must not exceed 400 hours in the year.

In terms of calculating overtime cost, I think it is reasonable to follow the current regulations, because we have a much higher overtime payment rate than some countries in the world such as: Japan is only120 percent - 200 percent, but our calculation is 150 percent for weekdays, 200 percent for weekends and 300 percent for holidays and New Year. It is unreasonable to raise the overtime rate and the workers themselves must identify clearly that employees and the employers are in the same boat, so both must share together unless conflict happens.

In this draft code, it is necessary to define clearly the basis of the overtime wage, for example, it is based on the productor unit price, excluding other allowances, which avoids misunderstandings in the calculation.

One things many enterprises have discussed is the proposed reduction in the normal working hours in the week from 48 hours to 44 hours per week. Many enterprises think this will cause direct damage to them, is this true?

In the textile and garment, footwear industry, employees are paid according to products instead of working hours, so when the working time is reduced, the number of products made will be reduced and this means that the income of employees will also decrease accordingly.

Meanwhile, enterprises have to increase overtime costs to compensate for such a shortage of products, which affects both workers and enterprises. In the context of international economic integration, low labour costs are a competitive advantage of Vietnam, however, if the working hours are reduced to 44 hours per week, it means a 9 percent reduction in working time per week. For evaluation, only the leather and footwear industry has lost nearly US$2 billion per year. Correspondingly, workers also lost 9 percent of income, the State reduced 9 percent of export turnover. Thus, instead of increasing labour productivity, it will be down.

In the context of low GDP per capita in Vietnam, the reduction of working time is not appropriate. In this draft, I propose not to give this issue in this regulation, it may be added later, because of damage to the interests of all three parties: enterprises, employees and the State.

Many have suggested adding one clause regarding the role and responsibility of the employee representative organisation in the draft. Do you think it is necessary?

I think that this is necessary, because the workers themselves have a trade union organisation from the production unit to the central level, in order to be fair and equal, in my opinion, regulations on the employee representative organisation should be added.

First of all, there are no employees without employers, and vice versa, enterprises cannot survive and develop without employees.