Workers in enterprises and cooperatives who lose their jobs or have their contracts suspended can receive support of 1-3 million VND from the union's financial fund.
On August 14, Mr. Phan Van Anh, Vice President of the Vietnam General Confederation of Labor, said that he had submitted a proposal to support workers, waiting for the Presidium to approve. This is a support package following Decision 06 for workers who lose their jobs or are laid off from April 1, 2023 to December 31, 2023 in enterprises and cooperatives that pay union fees.
With an estimated budget of 145 billion VND, beneficiaries, support levels, and procedures remain the same. Specifically, workers whose daily working hours, number of working days per week or month are reduced; workers who are suspended from work for 14 days or more and whose income is lower than the regional minimum wage stated in the contract will receive one million VND.
People who suspend their contracts or take unpaid leave for 30 days or more (except for personal reasons) will receive 2 million VND. Workers who lose their jobs but are not eligible for unemployment benefits are expected to receive 3 million VND in support.
The policy does not apply to those who unilaterally terminate the contract illegally, are disciplined and dismissed, fail to meet probationary requirements, or one party cancels the agreement, or those who receive monthly pensions or disability benefits.
Receiving support documents no later than January 31, 2024, completing support packages no later than March 31, 2024.
Workers complete procedures to receive unemployment benefits at the Hanoi Employment Service Center, July 2023. Photo: Hong Chieu
"The union predicts that the decline in orders will last until the end of the first quarter of 2023, and production will return to normal by mid-year. However, the actual situation is far from the forecast, and the gloomy production may last until early 2024, so continued support is necessary," said Mr. Phan Van Anh.
Regarding the 1-3 million VND level, Mr. Phan Van Anh said that this is a compensation for workers when there is a decline in employment. The financial resources of the trade union are limited, so it is difficult to completely resolve the issue. Additional support packages or social security policies from the Ministry of Labor, War Invalids and Social Affairs are needed.
Previously, in January 2023, the Union launched a series of support packages in the context of hundreds of thousands of workers being laid off on the occasion of the Lunar New Year. After half a year, more than 81,600 workers received support with a total cost of more than 114.5 billion VND.
Regarding the Government's assignment to study the reduction of union dues from 2% to 1%, Mr. Phan Van Anh said that the Vietnam General Confederation of Labor is discussing and will soon have a written response. However, reducing union dues will affect the care of workers at the grassroots level.
In response to the proposal of enterprises to retain union funds at the grassroots level and not submit them to higher levels until the end of 2024 to support workers, he explained that according to regulations, 75% of this fund is retained at the grassroots level, and only 25% is transferred to higher levels of unions to balance revenue and expenditure of activities nationwide. However, the union will calculate and possibly classify each group of enterprises in the fields that have had many orders cut to have specific support plans.
Meal of laid-off workers at the Uyen Hung Ward boarding house, Tan Uyen Town (Binh Duong), early 2023. Photo: Thanh Tung
According to the union, in the first 6 months of the year, the number of newly established and returning businesses decreased, while the number of businesses that stopped operating increased compared to the same period. More than 500,000 workers lost their jobs, had their work extended, or had their working hours reduced. The trend of workers losing their jobs increased sharply compared to the end of 2022. In the first 4 months of the year alone, the rate of people whose contracts were terminated was three times higher than in the fourth quarter of 2022.
The unemployed are still concentrated in the South such as Ho Chi Minh City, Long An, Tay Ninh, Dong Nai, Binh Duong, An Giang, Hau Giang. 75% of them are from FDI enterprises; about 8% are female workers over 35 years old, 5% are pregnant or raising children under 12 months old.
The union predicts that job shortages and job losses will continue to occur locally in labor-intensive industries and sectors such as textiles, footwear, electronics, and wood processing. Manufacturing companies for brands in the US and European markets continue to have plans to reduce their workforce, many of whom are senior and elderly.
Hong Chieu
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