Contractors for Nike, Adidas handing out hefty Tet bonuses despite drop in orders

By Le Tuyet   December 14, 2022 | 01:03 am PT
Contractors for Nike, Adidas handing out hefty Tet bonuses despite drop in orders
Workers leave a factory in HCMC's Binh Tan District. Photo by VnExpress/Huu Khoa
Despite a decline in orders, several factories with tens of thousands of workers will hand out generous Tet bonuses this year to share the burdens of workers.

Ever since she received an announcement that her Tet (Lunar New Year) bonus this year would be 30% higher than last year, Huynh Truc My Kha, 42, an employee of Pouyuen Vietnam Co. in HCMC, has been working without feeling tired.

When Kha first heard news that factories were laying off workers right before Tet, she was extremely worried. Pouyuen had earlier announced that 18,000 workers would have to take alternative Saturdays off from December 2022 to February 2023 due to a drop in the number of orders.

In Tet last year, those with the biggest bonuses received an extra 1.54 months' of salary, and for the Tet before that 1.87 months. After two years under Covid-19, the amount of bonuses this year has returned to pre- pandemic levels, a maximum of 2.2 months.

Having worked for the company for over two decades, Kha will receive the highest Tet bonus for someone at her level, around VND26 million ($1,106).

"After the company announced the bonuses, our worries all went away," she said. "We all checked our phones and everyone was happy."

Kha is one among over 130,000 workers at eight factories under the Pou Chen Group., a Taiwanese-invested footwear maker and a supplier for giants like Nike, Adidas and Puma, who will receive their Tet bonuses despite the manufacturer still in a tough spot.

A representative of Pouchen said the raise in Tet bonuses is to help relieve burdens for workers, despite the number of orders dropping towards the end of the year. The representative said there would be more challenges ahead in 2023, but added that he hoped that employees would return to work in the company’s factories.

Le Nhat Truong, union head of Pousung Vietnam Co., another Nike and Adidas footwear supplier at Bau Xeo Industrial Park in Dong Nai Province that borders HCMC, said the fact that the amount of bonuses in 2023 is the same as it was in the pre-pandemic period represented a great effort by businesses to keep workers happy.

Similarly, over 20,000 workers at the Freetrend Industrial Vietnam Co. in HCMC’s Linh Trung I Export Processing Zone received 20% higher Tet bonuses this year compared to last year, the same level as in the pre-pandemic period.

Lieu Quang Vinh, union head of the company, said that factory’s orders first showed signs of dropping in the third quarter of the year. Since October, workers have had to take Saturdays off and overtime has been canceled. Vinh said this situation is likely to persist next year with the continued drop in the number of orders.

According to the Research Center for Employment Relations (ERC), major factories which are suppliers to global corporations often abide by local regulations as well as the brand's policies. As such, commitments and agreements regarding labor and salaries must be fulfilled, except in certain cases, such as natural disasters or renegotiations.

An ERC representative said the Covid-19 pandemic was now under control, allowing companies to resume normal operation, and that the lack of orders would no longer be a problem for companies, which he said must follow their agreements regarding worker bonuses. Tet bonuses are also a way to retain skilled workers as production returns to normal levels, he added.

Le Dinh Quang, deputy head of the employment relations department under the Vietnam General Confederation of Labor, said Tet bonuses are not compulsory under current regulations. The fact that companies still hand out large Tet bonuses compared to last year, and despite the lack of orders, means companies are willing to share the burdens of their workers.

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