Vietnam Country Study 2015

Vietnam Country Study 2015 update
The Vietnam country study presents the latest information about the Vietnamese garment industry.
The Vietnamese garment industry is the country’s second largest exporting industry, following electronics, and accounts for 15 percent of the country’s GDP and 20.77 percent of its total exports in 2014. The U.S is the biggest market for garments from Vietnam, while Japan and the EU come second and third, respectively.
According to the International Labour Organisation’s (ILO) Convention 87 on Freedom of Association and ILO Convention 98 on Protection of the Right to Organise, Vietnam has not ratified worker’s rights. Freedom of association remains the most challenging problem for Vietnam. Workers are not allowed to establish independent trade unions of their choice, as all
enterprise unions must be affiliated to the Vietnam General Confederation of Labour, the only recognised union in the country. At the grassroots level, it is common to find enterprise union leadership dominated by high-ranking managers and collective bargaining agreements that are copied from the labour legislation.
The second biggest challenge in the Vietnamese textile industry is excessive overtime. The current annual overtime limit for garment industry is 200 hours (which can be extended to 300 hours in special cases) or 30 hours per month, but a large number of garment factories violated this legal limit.
The 2015 minimum wage that is used by garment companies as the basic salary is estimated to meet 75 percent of the minimum living needs. The garment association and the national garment trade union have a sector Collective Bargaining Agreement (CBA) that covers around 100 companies, mainly state-owned enterprises. However, according to the Vietnam General Confederation of Labour (VGCL), at least 60 percent of registered CBAs in Vietnam were just copies of the law. The lowest wages provided by the CBA are only slightly higher than the minimum wages.
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