Furloughed factory workers struggle without unemployment benefits

Nguyen Quoc Hung, 40, who has worked for garment maker C.T. Vina in Tan Thuan Export Processing Zone in HCMC for 11 years, and some of his colleagues have had their job contracts suspended since early October.

He does not go to the factory and is not paid his salary, but since his contract is still valid, he is not eligible for unemployment benefits.

Besides, it is difficult for him to get a new job.

Hung said employers do not want to recruit him, fearing he would quit if C.T. Vina tells him to return to work when it receives new orders.

To support his family, Hung works as a motorbike taxi driver but gets few customers.

He wants to quit his job at the garment company, but if he does so he will not be compensated for the termination of the contract. Besides, the monthly salary of nearly VND8 million (US$320) is a large sum of money for him.

If he finds a new job, he will get a starting salary of around VND5 million, not the VND8 million his seniority fetches him now.

“Tet (Lunar New Year) is approaching, but I do not know yet how to earn money,” he bemoaned.

In HCMC, Hung is one of over 18,000 workers who have been furloughed, according to Social Insurance.

In the neighboring provinces of Binh Duong and Dong Nai, the figures are 28,000 and 2,200.

A survey of 30 member companies by the Vietnam Leather, Footwear and Handbag Association found that this year 30% have received no orders, all have reduced their employees’ working hours, and 25% have let workers quit without pay or take unpaid leave.

Dang Tat Dat, head of the Binh Duong Labor Confederation’s legal policy bureau, said furloughed workers still have their names in the companies’ payroll, some companies pay them the 13^th month salary, and workers retain their seniority when they return to work.

“These reasons make workers accept the option of having their contracts suspended.”

With contracts suspended, workers are not entitled to the salary, rights and benefits stipulated in the contracts, and employers do not pay social insurance premiums either.

Dat warned that many more factories would furlough workers for two or three months due to lack of orders starting this month December.

“Obviously these workers are unemployed, but they receive no assistance,” he said referring to unemployment benefits.

Huynh Thi Tuyet (left) and Vo Thi Thuy Kieu, workers at High Point Furniture Global Company in the southern province of Binh Duong, have been on furlough since December 1, 2022. Photo by VnExpress/Le Tuyet

Phan Thi Quy, trade union head at High Point Furniture Global Company in the southern province of Binh Duong, said orders decreased since July and dropped to zero in the second half of November.

The company has decided to furlough all workers between December 1 and February 10, 2023.

During those two months the company would pay them half the minimum salary, the whole 13^th month salary and productivity bonus based on the first seven months of this year when it had many orders, she said.

The company would also pay VND2.5 million to each worker returning to work when it gets orders, she added.

Cao Duy Thai, head of the Dong Nai Province Labor, Salary and Social Insurance Bureau, said local companies have had to cut some 30,000 jobs since June due to lack of orders.

Workers on furlough should be given unemployment benefits until they return to work, he suggested.