Investment Newspaper: Inflation subsidy is necessary to support the labors

Dear Sir, when giving comments to the Draft of the Labor Code (amended) during the last Session of the XIII NA, you proposed the necessity of subsidy to cope the inflation for the labors. What is the basis of this proposal?

In my opinion, beside the basic salary, the employers should pay attention to giving additional subsidy to assure the benefit of the labors when the inflation is high. This help to solve the conflict between the employer and employees.

But, conflicts do not always occur because of benefit?

You are right, there are a number of reasons that result in the conflicts between the employer and employees, but the practice in Vietnam shows that the conflicts, the go-slows, the strikes happen mainly because of benefit. The problems get more serious during the economy recession and high inflation. The issue needs a solution.

Specifically, how you see the subsidy is?

Previously, during the high inflation to help the labor we adjust the salary indefinitely and more than one time in a year. However, this does not turn out to be the best solution, because of following two reasons.

First, the salary is remuneration for the job assignment and works value. The increase of salary is appropriate when the contribution is increased. It is not quite appropriate to cope with the inflation.

Secondly, the inflation happens at a certain time and does not last continuously. If we increase the salary to cope the inflation, it’s difficult to adjust afterwards.

Thus, if we have an inflation subsidy the issue may be resolved. The inflation subsidy can be indexed by some percentage of the received salary of the precedent year. In this way, the benefit of the labors will be assured and the business company does not worry to adjust the irregular salary.

So, what the employer and the employees benefit from this regulation?

The difficulty of the labors will be relieved and they will receive an additional annual income. Then, they can contribute more and will be more loyal to the Company.

In the practice, Pacific Corporation has adopted this system in their Salary Regulation and we received a full support from the employees. I do hope, the NA this time will evaluate and support this proposal.

Source: Investment Newspaper