Protecting interests of labourers at heart of support

Le Quan, Deputy Minister of Labour, Invalids, and Social Affairs (MoLISA)

What are the options laid out by the MoLISA to support businesses that are facing delays and other obstacles to maintain operations and retain workers?

Implementing Resolution No.105/NQ-CP issued on July 14, the ministry is co-operating with related ministries and the State Bank of Vietnam to complete a draft resolution on measures to support people facing difficulties due to the COVID-19 pandemic.

It will submit to the Prime Minister for consideration following several principles. These include supporting those whose income had significantly reduced, those losing jobs, or with suspended employment, and unable to sustain a minimum living standard due to direct impact of the pandemic while avoiding stretching support to all subjects. There will also be shared responsibilities between the state and enterprises in ensuring social security for employees, with a reasonable division between central and local budgets. Further, it will clear defining the responsibilities of state management agencies, local governments, and enterprises in identifying and ensuring support to the right beneficiaries with transparency, while preventing profiteering.

As a rule, businesses must prove that they are in financial difficulties. But in the pandemic situation, the MoLISA has proposed the government to extend the loan period for enterprises whose employees stopped working from January 1 to December 31 this year with a maximum loan period of three months, instead of only applying to enterprises with employees leaving their jobs during the peak pandemic period from April to June as before.

We predict that from now until the end of the year, businesses will be classified into three groups. First are enterprises struggling financially and taking time off operations – workers here will be paid unemployment insurance. The second group is enterprises with no income temporarily but still wanting to retain workers to avoid having to recruit and re-train new personnel. Last are business groups that maintain stable production, pay ordinary workers, and do not need support.

However, we plan to add a fourth group of enterprises that let workers stop working in contravention of labour regulations, where workers do not get paid, and where the businesses themselves do not apply for loans. These employees are not entitled to unemployment insurance and other support policies.

Does loosening the conditions for enterprises to borrow capital to pay salaries for employees attract more businesses to participate?

The policy of providing loans to enterprises to pay salaries for labourers who stop working is given in the context that the government is encouraging businesses not to lay off employees. The loan package will work if the business anticipates they can hold out for a few months, trying to keep labourers so that it does not take time to recruit and re-train. This idea is very effective if the crisis runs on a short cycle. Businesses want to keep skilled, trained, and difficult-to-recruit workers. Unskilled workers will be greatly affected. And in the case of businesses facing long-term difficulties, they may be forced to terminate labour contracts.

The above is suitable for the real situation, but its effect depends on pandemic fluctuations and the economic situation. The fact is, not many businesses choose to keep workers in this context and when dismissing workers, businesses will need unemployment insurance policies.

Recently, a number of businesses that have a lot of labourers such as foreign-invested groups and those operating in textiles, footwear, and electronics, have tried hard to retain workers and wait for 3-4 months – when the pandemic comes under control and the export market explodes, they will have enough labour to produce big orders. If the pandemic situation is still unstable after a long time and orders are not returned, these businesses will be forced to lay off a large number of workers.

It is predicted that the number of unemployed workers will be higher because Vietnam’s main export markets around the world are seriously affected by the pandemic. What are the MoLISA’s solutions to stabilise the labour market?

In years of strong economic development, we pay unemployment insurance and save that fund to ensure workers have a minimum living standard when the economy goes down. In the last six months, the MoLISA has proposed a security package to address the minimum living needs for disadvantaged workers.

For the last six months of the year, we are focusing on the issue of unemployment benefits, supporting employees to receive insurance and promoting training and retraining.

In recent years, the Vietnamese economy has grown well, and an accumulated unemployment insurance fund of up to VND80-90 trillion ($3.5-$3.8 billion) is being used for this period.

While the economy is in crisis due to the pandemic, and even though we are trying our best, we hare forced to accept that there will be a large number of employees receiving unemployment insurance. But with good and thorough preparations, we will have strong human resources for the next stage.