Work hour cut on agenda once more

Over the past weeks, the Vietnam General Confederation of Labour’s (VGCL) recommendation to reduce standard working hours from 48 to 40 hours per week have been under debate. Several foreign-invested enterprises are expressing their concern about the potential negative impact of the proposal on companies.

According to Nguyen Phuoc Dai, chairman of the Trade Union of Japanese sewing manufacturer Juki Vietnam in Tan Thuan Export Processing Zone in Ho Chi Minh City, although some workers would be pleased to have their working hours reduced, the current time is inappropriate to implement this.

Vietnam has one of the highest average working times and number of hours worked per year worldwide, Photo: Duc Thanh

Businesses have already faced numerous difficulties due to the pandemic and economic downturn in recent years.

“Juki has been experiencing a prolonged shortage of orders from August 2023 to February 2024, with no signs of improvement. As a result, the factory is only operating for 12 working days per month, leading to a decrease in workers’ income. Given the current circumstances, it is understandable that the labourers are hoping for a salary increase rather than a reduction in working hours,” Dai said.

According to Truong Thi Linh, head of human resources at South Korean apparel company Wooyang Vina II in Ho Chi Minh City, the basic salary of workers is currently based on an eight-hour working day, equivalent to 48 hours per week. However, this salary level is relatively low as most businesses only pay equal to or slightly higher than the minimum wage in the region, while overtime pay and additional allowances account for a significant portion of the total income.

“If the working hours are reduced to 40 or 44 hours per week, the company will likely have to decrease the salary,” Linh said. “Assuming the working hours are reduced to 44 hours per week, each worker will have a reduction of two working days per month, along with the minimum annual leave of one day per month. To maintain the same salary as before the reduction in working hours, the workload of these three days must be evenly distributed among the remaining days, creating significant pressure for the workers.”

A representative of a South Korean shoemaker with more than 35,000 workers in the southern province of Dong Nai told VIR, “There will be no optimal policy for both employers and workers, and it is also understandable when having different opinions about a new policy proposal. The important thing is that the two parties need to try to harmonise to benefit each other.”

“For example, when workers want to improve their income, and simultaneously have more time to take care of their health and their family, they are forced to hone their skills and improve capacity and productivity. If the workers’ productivity is still maintained, while the working hours are reduced, it is certain that the burden will be put on the businesses. In reality, Vietnamese workers’ productivity is lower than that in the region,” he said.

According to a survey by the International Labour Organization across 154 countries and territories, Vietnam belongs to the group of countries with the highest average working time and number of hours worked per year worldwide, equivalent to 48 hours per week.

However, an average worker in Vietnam made products worth $6.40 per hour in 2020, compared to $9.70 in the Philippines and $12 in Indonesia, according to a recent report by the Asian Productivity Organization published in February.

The World Bank has said that although Vietnam has been among the world’s fastest-growing economies in the last 30 years with an average growth of 5.3 per cent annually between 1990 and 2021, higher than any country in Asia except China, it needs to increase productivity growth to maintain this record.

Although many businesses consider reducing working hours as unfeasible at the current time, there are pioneering companies that have successfully implemented this approach.

Fujiimpulse Vietnam, a Japanese company that manufactures vacuum-sealing machines based in Linh Trung I Export Processing Zone in Ho Chi Minh City, has allowed workers to take one or two Saturdays off per month. On the weeks they work on Saturdays, employees can leave one hour earlier, equivalent to working seven hours on that day. On average, workers at Fujiimpulse Vietnam only work between 43.5 and 45 hours per week.

Dang Van Nhon, chairman of the Trade Union at Fujiimpulse Vietnam, said, “In addition to arranging reasonable rest time, the company also organises one to two trips per year for employees. Workers can maintain their health and have a relaxed mindset with this working arrangement.”

In terms of overtime, Vietnam is at the global average, but violation of overtime regulations is common. On the other hand, the number of annual leave days in Vietnam is among the lowest in the world, with approximately 12 days, and the number of public holidays and Lunar New Year holidays is relatively low compared to other countries.

According to Ho Kim Ngan, deputy head of Labour Relations at the VGCL, reducing working hours is necessary, but it is also important to adjust the salary accordingly.

“Even if workers only work eight hours per day as regulated, they should still be able to earn enough income to meet their needs without having to sell their labour excessively,” Ngan said.

The average per capita income in Vietnam has reached $4,500 per year. China previously implemented a reduction in working hours to less than 48 hours when the average per capita income was around $2,300, but labour productivity did not decrease, and instead continued to improve.

Optimisation wanted for work hour cuts A proposal to reduce working hours to 40 hours per week across the country has received differing opinions from state management agencies, workers, and the general business community.