Overtime cap to increase

illustration photo source: molisa.gov.vn

Pham Minh Huan, Deputy Minister of Labour, Invalids and Social Affairs, told VIR that “An overtime increase will be part of the revision of the current Labour Code next year.”

“Accordingly, all related factors, including labourers’ health, will be considered before making a decision on how many extra working hours will be allowed,” he said.

According to Le Dinh Quang, vice head of the Labour Relations Department under the Vietnam General Confederation of Labour, the overtime limit might be expanded to 400 hours a year for certain businesses in specific areas. But this will take careful thought.

According to the Ministry of Labour, Invalids and Social Affairs’ (MoLISA) Department of Work Safety, if employees work one extra hour a day for ten years, their lifespan will be decreased by 6.5 years.

Under the Labour Code, which took effect in 2012, a labourer can work a maximum of 200 hours of overtime per year, and 300 hours per year in special cases stipulated by the government. The overtime cap has remained a controversial topic for years. A number of domestic and foreign firms, including those from Japan and South Korea, have proposed increasing the overtime limit to 400 hours a year. They argued that, together with low labour productivity, the existing overtime cap was undermining their competitiveness.

According to the Korean Chamber of Commerce in Vietnam, the existing overtime cap may seriously affect business operations and force enterprises to increase the number of shifts during peak-season, which will result in a substantial increase in labour costs. This limitation may impact greatly on foreign investors’ decision to invest in Vietnam.

This view was also put forth by the Japanese Business Association in Vietnam.

However, over the past years, such a proposal was rejected by the MoLISA many times, which said that the prevailing regulations on overtime protect labourers’ health and curb the abuse of labour.

Vietnam’s overtime cap is now equal to half of the 600 hours a year recommended by the International Labour Organization. The country’s overtime restriction of 30 hours per month is also the lowest in the region, compared to 104 hours per month in Malaysia, 36 hours in China, 56 hours in Indonesia, 48 hours in South Korea, 144 hours in Thailand, and unlimited overtime in Cambodia, the Philippines, and Japan.

Vu Tien Loc, chairman of the Vietnam Chamber of Commerce and Industry said that, “The government should extend the overtime cap, while keeping the overtime limit below 600 hours a year. Employers and employees should negotiate overtime, with the involvement of trade unions as an important role.”

As planned, draft amendments to some clauses of the Labour Code will be submitted to the National Assembly for discussion in May 2017. If everything goes smoothly, they can be adopted in October next year.