Textile Association wants to increase overtime hours for workers, extend salary increase period

Mr. Truong Van Cam - Vice President and General Secretary of the Vietnam Textile and Apparel Association (VITAS) said that regulations in the Labor Code are causing difficulties for textile and garment enterprises.

"The number of overtime hours of employees must not exceed 30 hours in 1 month and the total must not exceed 200 hours in 1 year. For the textile and garment industry, this regulation is 300 hours in 1 year, which is among the lowest in the world" - Mr. Truong Van Cam, Vice President and General Secretary of the Vietnam Textile and Apparel Association (VITAS) said at the Vietnam Textile and Apparel Forum 2018 on June 28.

Illustration photo.

In addition, the Association also wants to amend the Labor Code regulations in the direction that textile and garment enterprises are allowed to lease out labor. According to VITAS's explanation, this makes the use of labor more flexible. Currently, this is a conditional activity and only applies to 17 industries. The textile and garment industry is not on this list.

In the immediate future, VITAS wants to have a long-term roadmap for salary adjustment, instead of increasing the minimum wage annually as at present. According to VITAS representative, the increase should be small and adjustments should be made every 2-3 years. This will help businesses be more proactive in making business plans.

"3 years ago, our additional contribution to the social insurance fund for employees was 55 billion VND. Now, the amount has reached 100 billion VND. Paying salaries and social insurance regulations is an extremely large pressure. While labor productivity has only doubled, salaries have tripled in the past 10 years. In our opinion, if labor productivity increases by 1, salaries for employees should only increase by 0.5 - 0.7 at most" - Mr. Than Duc Viet, Deputy General Director of Garment Corporation 10 shared on the sidelines of the Vietnam Textile and Garment Forum 2018.

Giving an example at Garment Corporation 10, Mr. Than Duc Viet said that orders are usually received 3 months in advance (January receives production orders for April). But in December 2017, importers in the US, Europe and Japan placed orders until the end of August 2018. Therefore, workers will have to work overtime during peak times to deliver products to customers on time.

"The Labor Code regulates 1.5 hours/day, 30 hours/month, 300 hours/year. We can stretch the 300 hours/year limit. But during peak months, it is impossible to maintain the 30 hours/month limit," said Mr. Than Duc Viet.

Some international businesses believe that using robots is a way to improve the efficiency of the entire textile and garment industry. At the Vietnam Textile and Garment Forum 2018, a factory model using fewer workers was introduced. Productivity is improved thanks to high automation in the sewing stage - a job usually undertaken by workers from Vietnam, China, Bangladesh, etc.

The trend that has emerged in recent years is a shift in investment to developed countries, instead of going to less developed countries to take advantage of cheap labor.

"A factory in Atlanta (USA) is developing robots for the textile industry. Interestingly, this company is working with a Chinese company to open a shirt factory in the United States. The robots operate in each stage and according to the processes. This is something to consider in the future. The textile sector is inherently a labor-intensive industry. For Vietnam to develop, robots like this are needed" - Mr. Steve DiBlasi, Vice President of Global Sourcing, Lanier Clothes Company (USA)