Union fee jump seen as step in wrong direction

May 21, 2012 | 11:00

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A steep rise in trade union fees has rattled foreign invested enterprises.

illustration photo

Under Article 26 of the draft Trade Union Law, expected to be adopted at the 13th National Assembly’s third session opened this week, all enterprises in Vietnam will use 2 per cent of their total payrolls to pay monthly trade union fees.

Before 2008, foreign-invested enterprises (FIEs) in Vietnam were free from trade union fee contributions. However, since the introduction of governmental Decision 133/2008/QD-TTg dated October 1, 2008, FIEs have had to pay 1 per cent of their payroll for such fees.

While the new proposed regulation has already received the thumbs-up from the National Assembly’s Standing Committee and Law Committee, many enterprises have got the hump.
“The proposal to double labour dues, paid by all enterprises, is a step in absolutely the wrong direction for Vietnam,” said Thomas Bo Pedersen, managing director of Danish-invested garment-maker Mascot International Vietnam.

“With 1,500 employees it is a huge burden on us to increase the labour dues. The same is true for all other companies. This along with all the other related cost increases will certainly make us reconsider our future investments in Vietnam,” Pedersen told VIR.

Quach Thi Nhung, head of South Korea’s garment-maker K.J Vina Company’s Human Resources Section in southern Binh Duong province, told VIR the rise was “too big”. She said at the current 1 per cent rate, her company with around 1,600 workers, had to monthly pay VND40 million ($1,923) in trade union fees.

By Thanh Thu

vir.com.vn

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