Poor health blamed for overtime cap

MoLISA spokespeople have cited spurious health reasons for expanded overtime Photo: Duc Thanh

At last week’s Vietnam Business Forum (VBF) in Hanoi, Deputy Minister of Labour, Invalids and Social Affairs (MoLISA) Nguyen Thanh Hoa made no comment on the VBF’s Human Resource Sub-Working Group chairman Colin Blackwell’s proposal that overtime caps be raised to compete with regional averages.

Foreign businesses made the proposal as far back as the VBF in June 2013, but at that time MoLISA Deputy Minister Pham Minh Huan rejected it, saying that it was “infeasible,” due to Vietnamese workers not being healthy enough to work longer hours.

At the VBF 2014, Colin Blackwell said “the current overtime limit is significantly below global averages, and as shown previously, is way below that of regional ASEAN countries.”

Under the existing Labour Code, the maximum overtime is 200 hours per year, which in special cases could be stretched to an absolute 300 hours per year.

However, according to the sub-working group’s recent survey of 400 foreign firms in Vietnam, 55 per cent of respondents said they found ways to be flexible around overtime limits – meaning “the overtime cap is difficult to enforce anyway”. 13 per cent said it caused business delays and 31 per cent said it significantly lowered output.

“If a factory in China or Thailand has the option of 1,872 hours of overtime annually, whereas Vietnam has only 300, then foreign investors will of course factor this into their country investment decisions,” Blackwell said.

“We would like to suggest an overtime limit cap of 800 hours for all industries and up to 1,200 hours for specific industries. Improvements in this would particularly benefit the export-manufacturing sector within the free trade agreement environment,” he suggested.

Japan Business Association in Vietnam representative Shimon Tokuyama also said compared with other Asian nations, “Vietnam’s restriction on overtime is too strict and is a burden to business operations.”

“Japan’s employment laws stipulate overtime can be stretched based on an agreement by both employers and workers,” he said. “We have already submitted a proposal to Prime Minister Nguyen Tan Dung in April, suggesting that this issue could be resolved without amending the law if such a scheme was introduced.”

EuroCham’s White Book released last week also stated that “the biggest concern for foreign invested companies in Vietnam is the capped limit on overtime.” The book proposed that the Vietnamese government allow overtime of up to 800 hours per year for the manufacturing sector, with the maximum of 1,200 hours. Under a survey conducted by EuroCham’s Human Resources and Training Sector Committee, manufacturing enterprises commonly expected overtime of 450-800 hours.