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New social insurance rule sparks worker strike in Ho Chi Minh City

Tuesday, March 31, 2015, 15:03 GMT+7
New social insurance rule sparks worker strike in Ho Chi Minh City
Deputy Minister of Labor, War Invalids, and Social Affairs Doan Mau Diep (R) and Deputy Chairman of the Ho Chi Minh City People's Committee Tat Thanh Cang (C) at a meeting on March 30, 2015 with the media on the strike of workers at Taiwanese-owned Pou Yuen Vietnam Co. Ltd. in Binh Tan District

Tens of thousands of workers at a Taiwanese-owned company in Ho Chi Minh City have gone on strike over the past several days to object to a new rule that restricts them from getting lump-sum social insurance allowance payments.

>> An audio version of the story is available here The strike began on March 26 and has continued with the participation of nearly 90,000 workers of Pou Yuen Vietnam Co. Ltd., a maker of sport shoes and garments for export in Binh Tan District, Vietnamese media said. On Monday morning, a number of workers returned to the company but they did not work, news website VnExpress reported. Representatives of the district’s labor authorities met those workers and advised them to resume work but they refused, the newswire said. Pou Yuen workers have gone on strike to oppose a new regulation under which they will not be allowed to take a lump-sum social insurance allowance when they resign from their current job. This new regulation is provided for in Article 60 of the 2014 Law on Social Insurance, which revised the 2006 Law on Social Insurance and will take effect on January 1, 2016.

Pursuant to the article, the scope of employees eligible to receive a lump-sum social insurance allowance when they resign from work is narrowed.

That means only a limited number of people are entitled to such lump-sum payment while the other resigned employees must wait until they reach their retirement age to get or receive such lump sums.

In Vietnam, the retirement age is 60 for men and 55 for women. Pou Yuen workers argued that they likely cannot continue to work until they retire. If they quit their jobs in the near future they will have to wait for a long time to get such payment, the striking workers complained. Most of the strikers said such lump sums help them pay for their daily needs when they already face financial difficulties while seeking new jobs after quitting the old ones. Facing the prolonged strike, the local People’s Committee invited Deputy Minister of Labor, War Invalids, and Social Affairs Doan Mau Diep to meet with the media on Monday to provide information related to the new article to help workers better understand it. Deputy Minister Diep said Pou Yuen workers have gone on strike as they have yet to fully grasped Article 60, which he said is a positive move to ensure the interests of laborers. Article 60 is aimed at encouraging laborers to accumulate their periods of payment of social insurance so that they can receive pensions when they retire, instead of receiving lump-sum payments after each time they quit a job, Diep said. For those people who fail to get a new job soon after resigning from work, they will be allowed to reserve their previous periods of payment of social insurance premium while waiting for a new job, the official said. He added that such laborers can also take part in voluntary social insurance while waiting to reach retirement when they do not take a new job.  He said the new regulation is intended to serve long-run social security objectives for the sake of laborers. However, Diep said the ministry will listen to the opinions of workers and take them into account during the preparation of guidance on the implementation of the law. The ministry will also consider subjects that should be given support when they join the voluntary social insurance program, the official said. At the meeting, Tat Thanh Cang, deputy chairman of the People’s Committee, said that for the time being, the authorities will halt the dissemination of the revised Law on Social Insurance pending the issuance of a decree or circular to guide its implementation. Local authorities will continue to collect feedback from the public and will report it to the central government and competent agencies for consideration. Today, March 31, the Ho Chi Minh City People’s Committee is scheduled to convene a meeting with Pou Yuen to provide them with information about the new regulation on lump sum social insurance allowance and listen to their feedback. In talking with Tuoi Tre (Youth) newspaper about this issue, Dang Quang Dieu, head of the law policy board under the Vietnam General Confederation of Labor, said that the agency’s units will carry out activities to introduce to workers in different locations the preeminent points of the 2014 Law on Social Insurance. “It is necessary to let workers know what benefits they will have when they cannot receive lump-sum social insurance allowance payment under the revised law,” Dieu said. When workers completely understand the interests they will have from an accumulation of periods of social insurance premium, they will agree to the new rule, he added.

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