Vietnam parliament backs insurance law change to ward off strikes

Reuters

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Workers of Pou Yuen Vietnam gather for a negotiation with labor union officials at their factory on the fifth day of their strike in Vietnam's southern Ho Chi Minh City March 31, 2015. Photo: Reuters Workers of Pou Yuen Vietnam gather for a negotiation with labor union officials at their factory on the fifth day of their strike in Vietnam's southern Ho Chi Minh City March 31, 2015. Photo: Reuters
Vietnamese lawmakers are pushing to change a social insurance law that has outraged factory workers, a move that could stave off potential labor unrest in a country touting its growing manufacturing muscle.
According to an internal opinion poll, more than 87 percent of the National Assembly supported a resolution to modify the law to give workers the option of a lump-sum social insurance payment one year after their employment ends, instead of the original law stating funds would be withheld until retirement.
The poll result was posted on the website of the state-run Vietnam Social Security on Monday. An amendment to the insurance law, due to take effect next year, could be rubber-stamped by lawmakers on June 22, according to an assembly official.
The government resolved to pass the issue to parliament in April to try to defuse a potential crisis after some 80,000 workers went on strike for six days at a major factory complex, in protest at the decision to hold back the lump-sum payments until retirement.
The factory produces footwear for the likes of Nike, Adidas, Lacoste, Converse and Reebok, which are among several dozen high-street brands with products made in Vietnam.
Any sign of labor unrest could hurt Vietnam's bid to become a manufacturing heavyweight, especially in textiles and electronics, as the country seeks to lure investors with its cheap workforce, improving infrastructure and accession to numerous free trade agreements.
The new option would, however, put pressure on Vietnam's state pension fund, which is forecast by the International Labor Organization and the government's own social security authority to be exhausted in the next two decades.

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