In each meeting of the National Wage Council, the parties often propose different wage increases, the gap can be up to nearly 20%. In many meetings, one of the participating parties has used the right to stop negotiations, leaving in frustration...
The heat of the National Wage Council meetings is always mentioned again every year. The Council Chairman representing the State will listen to the leaders of the Vietnam General Confederation of Labor (representing workers) and the Vietnam Chamber of Commerce and Industry (VCCI, representing employers) present arguments on the proposed increases in regional minimum wages.
Shortly after the National Wage Council was established and launched (August 2013), the Council's meeting to discuss increasing the regional minimum wage for 2014 began. In 2013, the minimum wage for region IV was only 1,650,000 VND, and that for region I was 2,350,000 VND. In the first meetings, the representatives of workers and employers proposed a wage difference of about 20%.
Calculating the minimum living standard, the consumer price index (CPI) and GDP growth, the Vietnam General Confederation of Labor proposed to increase the regional minimum wage by an average of 29.5%, applicable to all four regions. In contrast, the VCCI proposed a much more modest figure of 10%.
After many "fierce" negotiation sessions, VCCI did not accept the adjustment proposed by the labor representative because it was beyond the tolerance of the business. Negotiations continued, the gap gradually narrowed, the regional minimum wage that year was finalized to increase by nearly 15% compared to 2013, raising the region I salary to 2,700,000 VND.
Discussing the story of negotiating regional minimum wages, Mr. Vu Quang Tho, former Director of the Institute of Workers and Trade Unions, former member of the National Wage Council (from 2013-2018) said that at that time, the minimum wage only met 75% of the minimum living needs of workers.
Accordingly, in the salary calculation area according to region I, a worker needs about 2,300 Kcal/day to temporarily stabilize his labor force and maintain his life, equivalent to the minimum salary that the enterprise must pay from 3,500,000 VND/month. But in reality, the final salary is only 2,700,000 VND/month.
Meanwhile, Resolution No. 27-NQ/TW of the 7th Conference of the 12th Party Central Committee determined to adjust the regional minimum wage to suit the socio-economic development situation and the payment capacity of enterprises so that by 2020 the minimum wage will ensure the minimum living standard of workers and their families.
To bring the minimum wage closer to the minimum living standard, by 2020, in 2014, the Vietnam General Confederation of Labor proposed an increase of 22.9% while the VCCI's proposal was only 10%-12%.
For former Director Vu Quang Tho, the meetings of the National Wage Council always bring a lot of emotions. This is where workers follow every activity, hoping for a salary increase to improve their difficult lives.
"I am just one of five members of the Vietnam General Confederation of Labor, speaking out to defend workers. There is a lot of pressure that I always have to keep in mind... at worst I will quit my job," Mr. Tho once thought.
Usually, in the first negotiation sessions, the difference between the two sides' proposals is very large. "There was a session where we proposed a 14% increase, but the VCCI side proposed no increase. At that time, we just wanted to stand up and leave, stopping the negotiation," said Mr. Tho.
At that time, the leaders of the Vietnam General Confederation of Labor dissuaded and persuaded the Council to listen to the VCCI presentation. If they did not agree, they would continue to object and negotiate. The former Director of the Institute of Workers and Trade Unions said: "The employers raised and lowered the salary for a long time before accepting a 3% salary increase, which was not worth it."
Although he stopped participating in the National Wage Council in 2018, Mr. Tho still cannot forget the memories of the 2016 salary negotiation in Tam Dao (Vinh Phuc).
At that time, the Vietnam General Confederation of Labor calculated that the regional minimum wage would need 16% more to "catch up" with the minimum living standard. So, there are two more Wage Council meetings that could decide.
At the previous meeting in Do Son (Hai Phong), the workers' representatives proposed an increase of 11.11%, while the VCCI only proposed an increase of 4-5%. After this session, the Vietnam General Confederation of Labor lowered the proposal to 10% and the employers' representatives "loosened" it to 6.5%, still at a difference of 4.5%.
The second meeting took place a week later, full of tension. "After intense struggles, each side raised and lowered the price by a few percent. At that time, the technical department proposed an increase of 7-10 percent. The VCCI side still had to drag and pull before it could be increased a little bit more," Mr. Tho recounted.
The meeting started in the morning and lasted until 12 noon, and the VCCI finally accepted the increase of 7.3%. However, the General Confederation of Labor was still not satisfied with the initial proposal and decided to leave without staying for lunch.
The National Wage Council then agreed to increase the regional minimum wage in 2017 by 7.3% compared to 2016. This increase plan of the Wage Council was reported to the Prime Minister for consideration and promulgation. If approved, the new regional minimum wage will be applied from January 1, 2017.
Mr. Pham Minh Huan, former Chairman of the National Wage Council, recalled that at that time, the press compared the Council to "going to the mountains and down to the sea to hold salary meetings". The reason for choosing locations slightly far from Hanoi for meetings was also to keep information confidential, to create a comfortable space for all Council members to express their opinions and analyze frankly.
"Many meetings were very tense, when both sides got tense, banging on tables and chairs was normal," Mr. Huan recalled with a laugh.
Ms. Nguyen Thi Lan Huong, former member of the National Wage Council for 3 years, said: "Only at the salary meeting did we know what a stoppage and no negotiation by the General Confederation means. Normally, the labor representative proposes a very high increase, while the employer tries to hold back. However, this debate helps improve the wage issue.
"Wages are the result of the interaction between supply and demand. Because the bargaining power of workers is still weak, supply and demand often meet at very low levels. Therefore, a minimum wage is needed as a foundation," Ms. Huong shared.
The minimum wage is determined based on many factors, including the minimum living standard. This is an issue that often causes controversy at meetings of the National Wage Council.
"The minimum wage is partly calculated for workers to pay for childcare, food and non-food expenses such as education, healthcare, housing, transportation, etc. The question here is whether those minimum living expenses are calculated sufficiently, and at what level?", said former Deputy Minister Pham Minh Huan.
Mr. Le Dinh Quang, Deputy Head of the Legal Policy Department, Vietnam General Confederation of Labor, stated that the minimum living needs of workers are an extremely important basis in determining the regional minimum wage.
Currently, Vietnam, like most countries in the world, is using the calculation method based on the minimum consumption needs of workers to determine the minimum living needs. Accordingly, the consumption needs of workers include the needs for food, non-food needs, food of the workers themselves and the need to provide for dependents.
Minimum living needs are a dynamic factor, not easy to determine accurately. In addition, the law has not yet stipulated specific criteria to determine "minimum living needs of workers and their families" for competent authorities to announce "minimum living needs".
The calculation of the minimum living standard of the General Confederation of Labor is somewhat higher than the calculation of the technical department of the National Wage Council (about 3%) and lower than the results announced by the General Statistics Office and the Ministry of Planning and Investment. This is the reason leading to "phase difference" and difficulties in salary negotiations.
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