Freelancers face threat of losing source of income

Freelancers face threat of losing source of income - illustration photo

As the oldest street for children’s clothes and toys in Hanoi, Luong Van Can was always crowded when students were on holiday. But this summer the street has become sparse and quiet because many families are tightening their belts due to the financial impacts of the coronavirus pandemic.

While some stores are showing positive signs, adapting and diversifying where they can, others are still operating but with much fewer employees, and others have had to relieve all employees of their duties.

Kim Dung, owner of a toy shop on Luong Van Can street said, “At this time last year, every day the store turnover was up to hundreds of millions of VND, so I had to hire three salespeople. This month, I had to let them go. The store only makes a few million VND a day now, which is not enough to pay both rent and salaries.”

Dung shared that an employee begged her to stay and would accept half their salary compared to before. Feeling guilty, Dung promised that when the business situation is better, she will call them back if they have not found a new job.

The situation of small companies and individual business households going bankrupt has led to an increase in unemployment among self-employed workers. Different from the group of self-employed labourers who sell lottery tickets, motorbike taxi drivers, and street vendors for example, those working in business households in fashion, dining, accommodation, tourism, healthcare, and other services are often assessed as more stable due to the less precarious work and the regular monthly income.

However, these workers are usually recruited based on voluntary agreements between the two parties without labour contracts and are not covered by insurance as prescribed by the country’s labour regulations.

Because income and employment depend entirely on the employer’s business situation, these workers can be dismissed suddenly without enjoying basic benefits like severance pay or unemployment benefits.

In order to make a living many of them, after being laid off, have to take on many other jobs at construction sites or as motorbike taxi riders, street vendors, or returning to their hometown to find a new job.

Duc Trong, an employee of a hair salon on Pham Ngoc Thach street, said after the hair salon was closed, he had to switch to being a Grab driver for about two months until he got a job at another hair salon.

Street vendors, whose income depends on these small businesses, are suffering. Do Thi Lan said before the outbreak, street vendors in Hanoi’s Old Quarter earned VND200,000-300,000 ($9-$13) per day, but now only enough money for daily meals and renting houses. If the pandemic situation persists, she will go home to grow vegetables and raise chickens instead of staying in the city, barely able to make a living.

She said, “In the past, I used to deliver goods to shop owners in the Old Quarter, but now they cannot rent the store and business is sluggish so they rarely buy things. I push the cart from morning to afternoon but hardly sell anything. At this rate, I might have to return to my hometown.”

Le Quan, Deputy Minister of Labour, Invalids and Social Affairs said freelance workers are vulnerable and often do not know about their rights and are not protected by any specific organisation. During the recent pandemic period, these freelance workers were also on the list of beneficiaries of the VND62 trillion ($2.7 billion) social security package under Decision 15/2020/QD-TTg of the prime minister. However, with the complicated evolution of the disease and the new outbreak, this group of workers will face the risk of prolonged unemployment.

Many self-employed workers have shared that they are afraid of losing their jobs more than they are afraid of disease, because in the current difficult situation their chances of finding employment are much lower than those of trained and experienced workers.

The Ministry of Labour, Invalids and Social Affairs has considered a worst-case scenario where the number of unemployed workers could increase by about 60,000-70,000 per month in the near future, focusing mainly on areas such as tourism, construction, and manufacturing.