Background

Since 1975, workers in Vietnam have achieved an equality in being exploited. They have been forced to compete for work even during holidays while making a meager 30-40 dong per month. Increased productivity and working hours have been demanded without corresponding increases in wages. In a period of ten years, from 1975-85, the Vietnamese government further maltreated its workers by withholding wages for months or by compensating workers with products in lieu of money. For example, a worker making perfume would receive perfume as part of the salary; a worker constructing coffins would likewise be paid in coffins.

After opening its doors to attract foreign investment in the late 1980s, the Vietnamese government encountered a new problem: the wage differential between workers in the public and private sectors. In 1993, the National Assembly revamped its labor policies by implementing a minimum wage of 120,000 dong (US$12) per month effective nationwide; meanwhile the minimum wage for foreign joint-ventures was set at 350,000 dong (US$35) per month. Inevitably, more qualified and competent workers have been attracted to joint-venture enterprises. According to Labor Magazine (Aug. 4, 1994), large numbers of workers left the textile and leather industries of the Ministry of Light Manufacturing as the result of stressful work conditions, long hours (10-12 hours a day), and low wages. In the first half of 1994 alone, the light manufacturing sector, mainly 23 near bankrupt enterprises, suffered from a departure of 6,156 workers.

Workers prefer to work for joint-venture enterprises for other reasons besides higher wages. In principle, the local department of labor provides manpower for companies looking for workers. In 1993, Saigon had 275 foreign representative offices, but only 156 offices registered to hire people for work. The Youths (May 20, 1993) quotes a young lady working for a foreign office not registered to hire workers: "If registering through the government, outside of social insurance contribution of 10%, a worker is levied a tax for earnings of over 650,000 dong and an additional 30% tax is assessed for 'other' reasons." The other reasons for the 30% tax remain unclear. As a result, workers choose to forego the registering process and accept lower wages.

The government contributes to the exploitation of its workers. Almost all joint-venture enterprises are run by government representatives in cooperation with foreign businesspersons. Meanwhile, joint-venture enterprises can hire workers through intermediaries, many of which are government organizations established to receive commission. The structure of joint enterprises depends on the share of investment from each side. In general, the Vietnamese side contributes the land (which is in principle state land) and the foreign partner puts up 100% of the capital. The Vietnamese government understands that Vietnam is attractive to foreign businesses because of its low wages, and skilled and industrious workers. The government wants to reap long-term benefits from the relationship with foreign businesses, but it cannot extract anymore from its workers at the lowly 12,000 dong per month (US$12). As such, it compromises with foreign companies to establish a minimum wage of $35-45 per month for all joint-venture enterprises. The compromise is below the $50 per month originally planned. (Foreign businesses refused to pay more citing the expenses for taxes, insurance, and bribery.) With assurances from the government, foreign firms are free to exploit the workers as long as the minimum wage is respected, thus rendering superfluous any existing "labor contract."

The Labor Contract

In principle, the labor contract is a document used to enforce the enumerated responsibilities of the employers and employees. However, by May 1993, only 10% of foreign companies agreed to any labor contract with workers. The simple reason is that the firms did not want to increase expenses. A labor contract would compel the companies to contribute 2% of total monthly wage expenditure to the government unemployment fund, and an additional 10% for social insurance (of the 10%, 8% goes to workers' welfare such as health insurance and disabilities benefits, where the remaining 2% goes is uncertain). In January 1995, the Prime Minister increased the social insurance contribution to 15% of total monthly wage expenditure of workers participating in the "social insurance program." The workers must separately contribute an additional 5% to the insurance fund. What will the conditions of the workers be like if companies refuse to sign labor contracts? (These problems do not include the 3% of wages that the companies must pay to the Department of Labor, although it plays no role in helping workers find their jobs.)

In 1993, the director of the investment office of the Foreign Business Relations Department admitted that many joint-venture companies do not abide by the minimum wage and ignore regulations on insurance and safety. The common violations were prolonging the training period to pay lower wages, increasing work hours without additional remuneration, and avoiding the signing of labor contracts. During the training period, workers are paid only 70% of the monthly minimum wage. However, many are paid only $13 to $18 while working 10 to 12 hour days, sometimes with 20-25 hours of extra overtime per week. Presently, about 20% of joint-venture enterprises pay less than the minimum wage and 70% of the workers have no labor contract. This situation continues despite the Labor Law explicitly mandating wages, insurance, and other conditions.

By recent estimates, only 30% of the labor force in Saigon is living adequately. The remaining 70% lack sufficient food from 10 to 15 days per month. The conditions of workers in villages and other cities, especially in the mountainous region, are much grimmer. Citing a typical case, Labor Magazine (Oct. 20, 1994) reports that Tay Nguyen Rubber Company (part of the state-owned rubber conglomerate) experienced difficulties paying its employees on time, lagging by as much as two or three months.

The Harsh Life

There is no clear, established policy for excused absences. Each company has its own policy. According to Labor Magazine, Goh Hsing Co., a foreign joint-venture, deducts a full month's lunch allowance (approximately 2,000 dong or US$.2) for an absence with no excuse; excused absences lasting more than two days result in the deduction of one week's lunch allowance; excused absences lasting more than three days result in the deduction of the month's lunch allowance. Labor Magazine also reports that the joint-venture Louitech-Leasgo in Saigon penalizes its workers for not working longer hours--even though they had presented valid excuses. Each worker is penalized 28,000 dong (US$2.8) for each day in the month that he does not work longer hours. In one incident, management quickly dismissed a worker after she complained about the horrid conditions. The Youths (March 14, 1995) reveals that the joint-venture Mountech "heavily penalizes its workers for violating company rules, sometimes as much as 60,000 dong (US$6), as in the case of Ms. Huynh Thi who merely asked for one day and two hours off for family reasons."

Safety regulations are not implemented at the appropriate level, creating danger to the workers. For example, in Sang Y Corp., Ms. Bui Thi received a nose infection as a result of inhaling dangerous chemicals, but the company refused to compensate for medical costs. Ms. Le Hong Nhung had to cover her own medical expenses after a machine ran over her hand. Workers at the petroleum joint-venture Vietsovpetro and Vimsaigon were exposed to hazardous chemicals cleaning the tanks of ships, but received no additional compensation. In the case of Vimsaigon, workers went several months without pay unbeknownst that the firm had declared bankruptcy.

In general, workers are provided with inadequate safety equipment and clothing. Furthermore, workers must endure the humiliation meted out by foreign employers. The humiliation methods include incessant yelling and screaming, throwing objects at workers, forcing workers to stand in the sun, and physical abuse. In one of the more demeaning incidents, the general-director of Saigon Mobilier International, Georges Wache, forced three workers to put their heads between his legs so he could decide who would win a free movie ticket. Incidents such as this elicit hardly a response from government cadres on the management of joint-ventures.

The work atmosphere is stressful even when one needs to fulfill one's personal needs. Workers using the restroom must prove that they actually went. Workers are prohibited from loitering around the work place. In once case, workers worked with tape over their mouths as penalty for talking (Youths, March 14, 1995).

In 1995, women made up 46.4% of the labor force in Saigon. In some areas, women made up as much as 87%. Forty-five percent of women had to work from 50 to 72 hours per week. Because of the long work hours, women are denied the opportunities to form families and the ones who do have families are unable to tend to their children.

Labor Unions in Vietnam

The Vietnamese Communist Party (VCP) has formed many labor unions over the years, yet not until the early part of 1995 did it formally introduce a set of labor laws. Its view on labor representation, however, was unambiguously enshrined in a 1990 law on unions: "...the union is the mass social-political organization of the working class, formed voluntarily by the Vietnamese workers. Under the leadership of the VCP, it is a member of the political community and serves as a school of socialism for the workers"

The central leadership of every union must belong to the Communist Party and gets its orders directly from the General Confederation of Labor. The union representatives carry out the Party's agenda, and do not serve the interests nor protect the rights of the workers that an organization "organized voluntarily by the Vietnamese workers" is supposed to do. The General Confederation of Labor (GCL), which every union is under, is composed of undercover security agents masquerading as workers. The mission of these "labor leaders" is to squelch immediately attempts by workers to stand up for their rights. Not surpassingly, the GCL is not recognized by the International Labor Organization.

Prior to free market measures, the unions were given official status as one of the four most powerful organizations in any state-run business. But now with a free market economy, the unions' role has faded and evolved to a great extent, especially in the private sectors. In principle, the unions act as a bridge between managements and workers to resolve conflicts. But for fear of losing their jobs, many union members do not even tell their management that they belong to a union.

On the other hand, union members are viewed with suspicion by other workers and seen as "spies" for management. According to one newspaper survey by the Youths, when asked "If your rights are violated, which organization would you come to for help?", 78% answered "do not know" or "no answer." The responses show that the workers do not want to join "token" unions being formed at many companies. A typical case is at the joint-venture Mountech, where workers interviewed expressed that the company's union serves only as a tool for management to intimidate workers. One employee remarked: "The unions, besides acting as a source for credits and loans, currently play no role."

Previously, the workers risked the wrath of the Communist Party (represented by the management and union) if they fought for their rights. Today, after the launch of a market economy (in the direction of socialism), more than half of Vietnamese workers now have to deal with foreign companies and owners and their Vietnamese management and union henchmen. Consequently, many labor-management conflicts have been transformed into legitimate demands for workers' rights--against foreign exploitation. This is a situation of significant concern for the government and party since workers are being least exploited by foreigners.

Beginning of Labor Unrest

The first reaction by Vietnamese workers against low wages occurred on May 22, 1992 at the Nha Be garment company in Saigon when 140 workers staged a two day work slow-down. On January 19, 1993, more than 300 employees at Mountech (a Korean joint-venture) went on strike. The government tried to minimize publicity from these two pickets; but soon after, on February 6, 1993, 600 workers at another Korean joint-venture (Reeyoung) went on strike and the government was no longer able to keep a lid on the developments.

Many others strikes at large and small companies belonging to foreign investors from Taiwan, Thailand, Hong Kong, Germany, and other countries took place with increasingly regularity. The first strike at a state-owned enterprise occurred in March 1994 at a food production plant. Eventually, even bus drivers from a state-run national bus line went on strike.

On January 1, 1995, the Labor Law went into effect. Due to lack of enforcement, its guarantees on worker safety, compensation and maximum hours are routinely violated. Moreover, restrictions on workers' right to strike seriously undermine the Labor Code. Currently, following the revision to the Labor Law in September 1996, Vietnamese workers are forbidden from striking at nearly all state-owned enterprises for "national security reasons." As for joint-ventures, strikes must be the "last solution" after continuing efforts to "reconcile" with the company and management and permission to picket been received from the government labor union. Even so, wild-cat strikes continue to occur in Vietnam, in reaction to the extreme working conditions imposed on the Vietnamese workers by foreign ventures, with the approval and assistance of the government and its Vietnamese managements.

What Lies Ahead

According to official figures, there were 24 strikes in 1994, 48 in 1995, and 35 in the first eight months of 1996. In general, these work-stoppages have resulted from collective decision-making among workers, with a participation rate from 50 to 90%. The usual target has been foreign joint-ventures.

Clearly, the conditions of Vietnamese workers are unacceptable. The economic reforms instituted by the government will not improve the lives of workers if the Labor Law remains deficient--by curtailing the right to strike and form independent labor unions--and this already inadequate Law is meekly enforced. Not surprisingly, economic gains will continue accruing to the owners and managements of the various enterprises (mostly government officials and party cadres) and not to average Vietnamese citizens.

Mr. Nguyen Ho, a prominent ex-communist who held many top posts in national labor organizations before and after 1975 and well as positions in the VCP itself, has stood up against the Party and been severely persecuted for his criticisms. He has vowed to fight to the last breath for the true happiness and prosperity for the people after admitting that he had made a mistake in following the communist movement. Individuals like this 80-year old former labor organizer and the courageous workers at the joint-ventures and state-owned enterprises who risked their jobs and personal safety to secure the rights and dignity of labor make clear the plight of the Vietnamese people in general and the Vietnamese worker in particular. Despite all the clichés over the years about the "worker's paradise" and the "heroes of labor," workers in Vietnam still have to fight for their rights, which were taken away from them many years ago by the Communist Party.

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