Tripartite group to set wages

NWC now plays a decisive role in setting minimum wage

Last week saw the launch of the long-awaited government-established National Wages Council (NWC).

The tripartite NWC will include 15 members, with an equal number of representatives from trade unions, employers and the Ministry of Labour, Invalids and Social Affairs (MoLISA).

“The NWC recognises the importance of worker and employer participation in the minimum wage-setting process,” said Gyorgy Sziraczki, director of the International Labour Organisation’s (ILO) country office for Vietnam.

Over the past 15 years, the government has fixed minimum wages while workers and employer organisations were consulted separately.

However, the NWC would now reach a joint decision between the three parties. After the parties reach consensus on minimum wage levels, the proposal will be submitted to the prime minister for approval.

“This is a process of building consensus and reaching agreement, which helps minimise industrial disputes and creates a climate conducive to investment, growth and development,” Sziraczki said at the launch.

According to the ILO, the NWC would also enable worker and employer organisations to work more proactively in developing minimum wage proposals which would reflect the needs and concerns of their members and those who are directly affected by minium wage. Through negotiations minium wage is expected to be adjusted at a relevant level, which helps balance interest of workers and employers.

MoLISA Deputy Minister Pham Minh Huan said the NWC would calculate a minimum wage rises based on consumer price index developments which could result in an increase in workers’ wages, meaning living standards can be maintained despite price increases.

The newly adopted Labour Code stipulates that “Based on the minimum living needs of the employee and their family, social and economic conditions and wage levels in the labour market, the government shall announce regional minimum wages on the basis of the recommendation of the NWC.”

The council last week also began making proposals on the minimum wage levels for 2014. Huan said the new levels would be issued by late October 2014.

“This scheme should match market price developments,” Huan said.

Vietnam General Federation of Labour’s chairman Dang Ngoc Tung said the minimum wage currently met just 60 per cent of basic living costs.

“The tripartite consensus in setting minimum wage levels should help reduce labour disputes, stoppages and strikes,” he said.