Workers over 35 years old at foreign invested firms face vulnerability of layoff

According to Ngo Duy Hieu, head of the labor relations department of Vietnam General Confederation of Labour, more and more worker over 35 years old are being laid off at FDI enterprises, which leads to serious consequences especially for social security issues. 

In particular, the problems of finding and arranging new jobs for workers and also the psychological insecurity as well as other negative issues arising from the layoff. 

Hieu said that currently some industries are no longer suitable for workers over 35 years old. 

Furthermore, with the current salary policy, enterprises will have to pay a high salary rate for more senior workers, who also bear higher social insurance costs, which is detrimental to enterprises. 

Another reason given by Vietnam General Confederation of Labour is that while some over 35 years old workers are no longer able to meet the job requirements of enterprises, there are plenty of younger worker in the labour force to be ready to work.

Hieu said that FDI enterprises have found many ways and reasons to dismiss workers such as creating high work pressure, some enterprises even terminate the labour contracts without any particular reasons.

He said that there are several reasons leading to termination of employment. For instance, 39 per cent of termination are due to work pressure (overtime, high norms); 13.4 per cent are because of hard, dangerous work; 8.4 per cent are due to being sexually harassed; 12.6 per cent are dismissed without any reason, etc.

Many FDI enterprises are still not seriously committed to the terms in the labour contracts, violating the rights of workers, which leads to massive labor disputes or collective work stoppage.

Currently, there are 1.5 percent of workers who are working in FDI enterprises without labor contracts.

Additionally, there are a number of employers who have signed contracts with workers to do work on a regular basis, but to avoid paying social insurance and the signed contracts of enterprises with workers are usually under the types of service, consultants and collaborators contracts.

In many enterprises, signing a fixed-term contract more than two times (which should be converted into an indefinite-term contract) is rampant and also a matter of great concern, affecting the interests of workers.

According to the General Statistics Office, by 2017, there were more than 14,600 FDI enterprises that are employing over 3.6 million people, making up 26 per cent of the total number of employees in the enterprise sector. 

At present, FDI sector has made an increasingly important contribution to the socio-economic development of Vietnam. In particular, FDI firms always account for around 25 per cent of total social investment capital, contributing more than 20 per cent to the GDP.

FDI is also a budget-paying sector, accounting for a high proportion of total revenue and constituting a large and growing portion of Vietnam's total export turnover at about 71 per cent. 

Thus, representative of Vietnam General Confederation of Labour said that it is necessary to have specific policies to protect the disadvantaged labor groups, limiting the layoffs of workers over 35 years old, especially at FDI enterprises.

Accordingly, the government should research and promulgate legal regulations to tighten and limit the number of FDI enterprises which are sacking workers after the age of 35.