Factory has orders but workers quit and withdraw insurance

Ho Chi Minh City Group has just announced orders until the end of the year, at the same time Thuan Thien Shoe Company in District 12 received news that about 500 workers have quit their jobs to withdraw their insurance.

Due to the general impact, since March this year, orders at Thuan Thien factory have decreased; workers only work 8 hours, with Saturdays off. The board of directors still pays full salaries to support workers, keeping them waiting for production to recover.

However, when the parent company reported that it had found a new customer, signing more than three million pairs of shoes for the end of the year, a series of employees wanted to quit. Initially, only a few people applied, but by early October, departments reported about 500 people asking to quit, which fell during the peak production period of the factory.

The group's plan is that the factory in District 12 alone must produce 250,000-280,000 pairs of shoes per month. Mr. Nguyen Quang Toan, in charge of human resources at Thuan Thien Company, said that to ensure progress, the unit needs 2,500 workers, but currently has only 2,000. Most of the people who quit have been working for 10-18 years. "The workers want to quit to withdraw their insurance at once before the law takes effect," said Mr. Toan.

The company said that the number of workers quitting their jobs increased in July when information about the one-time subsidy plan in the draft Law on Social Insurance was widely consulted. Accordingly, plan one, only those who participated before the law took effect (expected before July 1, 2025) could withdraw. Those who contributed after this time could not withdraw, except for those who are old enough to retire but have not contributed enough years to receive pension; those who have settled abroad; those who have life-threatening illnesses.

Option two, regardless of the payment period, all workers who have paid for less than 20 years and have not participated in the system for one year can withdraw but not more than 50% of the total time contributed to the Pension and Death Fund. The remaining years are reserved to enjoy the regime. This option does not limit the number of times workers can withdraw.

"We try every way to retain them because one skilled worker is worth three new ones. If staff continuously quit, the company will fall into difficulty," said Mr. Toan.

About 5 km from Thuan Thien shoe factory, Viet An Garment Company fell into a similar situation when year-end orders started to come back, but workers were agitated and wanted to quit to withdraw their social insurance at once.

The factory representative said that due to the economic difficulties, the board of directors accepts orders from loss to break-even. The company aims to not take profit, only need workers to have jobs and income to stay at the company waiting for recovery. But what the company does not want is workers wanting to quit their jobs to withdraw their insurance. Every month, several dozen people apply, most of them long-term workers.

People apply for unemployment support at the Ho Chi Minh City Employment Service Center on July 26. Photo: Thanh Tung

Factories affected by workers submitting resignations pending withdrawal of insurance have also been mentioned in localities such as Long An and Dong Nai. At a recent workshop to provide comments on the draft Law on Social Insurance, Ms. Bui Thi Ngoc Trang, Chairwoman of the Long An Industrial Parks Trade Union, said that there were enterprises with more than 5,000 workers, but more than half of them submitted resignations.

Mr. Vu Ngoc Ha, Director of Dong Nai Trade Union Legal Consulting Center, also mentioned a similar situation when many workers submitted resignations despite the fact that the factory had stable orders and production.

To convince workers to stay, factories invite union officials and relevant agencies to provide consultation. Ms. Nguyen Phan Bao Khuyen, an official at the Legal Consulting Center (HCMC Labor Federation), said that those who have jobs and stable incomes but quit to withdraw their insurance are not doing so because of difficulties. They have heard a lot of information on social media and have misunderstood it, causing psychological turmoil.

"I just ask questions for workers to answer and then decide," said Ms. Khuyen. For example, workers say that withdrawing money to invest in business or depositing it in the bank is more profitable than using insurance. However, when asked if they have seen anyone or any colleagues do that or spend all the money they have withdrawn, people cannot answer. Workers who complain about low pensions and difficulty living when asked what they are preparing for old age, most remain silent.

Ms. Bao Khuyen in a propaganda session on social insurance policy for factory workers of the Ho Chi Minh City Legal Consulting Center. Photo: An Phuong

Mr. Nguyen Quang Toan said that after receiving advice from union officials, the massive resignations have slowed down, and some have withdrawn their resignations. This has not helped the board of directors to stop worrying because workers' psychology is easily influenced. In addition to continuing to promote, the company has planned to recruit replacements with more flexible criteria but higher salaries. The factory union has a mutual support fund to help workers in difficulty borrow without interest...

"We are doing everything we can to ensure production, but to stabilize, workers must understand that having a job is important right now. The insurance that has not been withdrawn is still there to take care of old age, it will not be lost anywhere," said Mr. Toan.

According to Tran Thi Dieu Thuy, President of the Ho Chi Minh City Labor Federation, since the end of last year, when orders decreased, many businesses planned to cut workers. Starting from the third quarter of this year, textile and footwear companies began to recover, and factories that had previously planned to reduce workers have now withdrawn their plans to recruit workers for production. At this time, factories are facing a situation where workers are proactively quitting to wait for insurance withdrawal.

"The habit of withdrawing insurance has existed for so long that any change will create an impact. At this time, businesses with orders are affected," Ms. Thuy said. To reduce the shock, the immediate solution is for the functional sector to connect with labor to help factories that are short of workers.

In addition, according to Ms. Thuy, at this stage, propaganda for workers is very important. Responsibility is not only limited to enterprises but needs to be expanded to social networks, media and related state agencies in a vivid and easy-to-understand form. In particular, the policy needs to clarify the difference in benefits and regimes between those who have been attached to the social security system for a long time and those who have contributed for a short time.

Le Tuyet

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