Over 1,000 staff at a South Korean-run garment firm in Ho Chi Minh City have stopped working to protest the company’s new salary scheme that could affect their incomes.
The strike began at a factory of Nobland Vietnam Company at Tan Thoi Hiep Industrial Park in District 12 on Friday morning after the workers were asked to sign an agreement over a new salary payment scheme that would take effect next year.
Under the new scheme, workers’ salary would be paid based on their performance, instead of seniority as previously. In this way, all employees would receive the same monthly basic salary of nearly VND5 million ($219.05) and depending on their performance, would be paid an additional income.
The new payment scheme, however, would hurt senior employees since their basic salary had previously increased by 5 percent annually.
An anonymous female protester said she has been with the company for 17 years and so far, her basic monthly salary is VND9.1 million.
However, with the new calculation, her basic salary would be reduced by nearly half.
“This would not be fair to those who have devoted to the company for many years,” she lamented.
However, a company representative said the new payment method would help stimulate production and improve output.
If staff work hard and improve their skills, incomes would increase two to three times, the representative said.
Tran Thanh Tho, an official of the Division of Labor, Invalids and Social Affairs in District 12, said the performance-based salary calculation method has been applied by many manufacturing enterprises. However, this must be done since the firms start operation.
Nobland Vietnam’s factory has applied the seniority-based salary calculation method for nearly 19 years and now, if it wants to change it, it is necessary to consult employees, he said, adding that enterprises should have a separate plan for senior workers so they do not feel disadvantaged.
In response to workers’ reactions, Kim Shin Young, general director of Nobland Vietnam, on Saturday, accepted to stick to the old payment scheme based on seniority.
The company will pilot the performance-based payment scheme with those who agree with the new method.
The South Korean-wholly-invested Nobland Vietnam Co., Ltd., has been operating in HCMC since 2003, specializing in producing apparel products with more than 2,600 employees.
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