Workers strike collective pact with Vietnam textile association

Textile and garment units across the country will raise the minimum salary for their employees by up to 30 percent under the first-ever collective labor pact between a trade union and the textile association.

The agreement, which will be applied on a trial basis, comprises 14 conditions and terms on job assurance, minimum salary and overtime pay that are said to be aimed at protecting workers’ rights and reducing strikes.

It was signed between the Vietnam Textile and Apparel Trade Union (representative for workers) and the Vietnam Textile and Apparel Association (representative for enterprises) in Hanoi on Monday.

Truong Van Cam, deputy chairman of the union, said he was very happy the two sides had finally reached an agreement after seven modifications.

“Workers will receive the most benefits from the pact. They work hard and many work overtime but still have low incomes,” he said.

Under the agreement, if a textile employee works 40 hours per week, the monthly minimum wage will range from VND1.2 million (US$63) to VND1.7 million ($90) in accordance with regional delineations. Workers in urban districts in Hanoi and Ho Chi Minh City will enjoy the highest rate.

“These figures are 15-30 percent higher than the current rate. Though the average salary in the textile sector is now high, there is a big gap between company leaders and workers as the former gets thousands of US dollars per month while many of the latter are paid only VND1 million,” said Cam.

The pact stipulates that employers are not allowed to set more than 15 salary grades.

Currently, many textile units have 30-40 salary grades with very small differences in payments so that workers will not really receive higher incomes whenever their grades are raised.

Under the agreement, wages of newly-employed textile workers who have passed the probationary period will be at least 10 percent higher than the minimum wage set by the government. The current rate is 7 percent.

As per government stipulations, minimum wages at local companies in Vietnam this year range between VND730,000- 980,000 per month.

Foreign invested companies, meanwhile, are ordered to pay their staff between VND1.04 million-1.34 million at the least.

The government typically adjusts minimum wages every year.

The pact between the trade union and the association also regulates that employers must consider raising salary grades for their employees every one to two years (instead of two to three years regulated by the government).

Cam said 69 textile and apparel units have registered to implement the agreement. They employ a total of 90,266 employees, or nearly half of the industry workforce of 200,000 people.

Though many textile companies have yet to register to apply the pact, it will push salaries of the sector up as employers have to pay higher to attract workers, said Nguyen Xuan Duong, general director of Hung Yen Garment JSC. The company has eight subsidiaries with a total workforce of 10,000 people.

The Vietnam Textile and Apparel Trade Union and the Vietnam Textile and Apparel Association will review and adjust the pact every six months.

Fewer strikes

“The fact that employers signed the agreement means they are committed to ensure jobs and salary for their workers. This will contribute to reducing walkouts in the textile and garment sector,” said Pham Minh Huan, deputy minister of Labor, War Invalids, and Social Affairs.

The textile and apparel industry, a major export earner, has witnessed increasing incidence of strikes every year for the last few years.

There were 387 strikes in 2006, 541 cases in 2007 and 773 in 2008.

Dang Ngoc Tung, chairman of Vietnam General Confederation of Labor, said he not only expected a slump in strikes in the sector but also hoped other sectors would follow suit in striking such agreements.

Tags: Vietnam Garment, Vietnam Garment industry, Vietnam textile industry