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HCMC companies hope to pay year-end bonuses despite Covid woes

By Le Tuyet   November 29, 2021 | 04:30 pm PT
Many companies in HCMC have been hit hard by the Covid-19 pandemic and even suffered losses, but are still on course to pay year-end and Tet bonuses to employees.

The Southern Rubber Industry Joint Stock Company (Casumina) was one of the first enterprises in the south to implement the stay-at-work model when the fourth wave of Covid-19 struck Vietnam in late April. Around 1,200 workers lived in its five factories in Ho Chi Minh City and Dong Nai and Binh Duong provinces during the four-month lockdown.

Thanks to this, its supply chain was not disrupted, but operating costs went up dramatically and it suffered a net loss of VND30 billion ($1.3 million) in the third quarter. However, it plans to pay bonuses as usual to employees for Tet (Lunar New Year) in two months from now.

Pham Hong Phu, the company's general director, said it no longer has to house workers and so costs have fallen.

It expects profits of VND51 billion and the year-end payout comprising the 13th month salary and Lunar New Year bonus to cost it around VND25 billion.

"Rewarding workers with year-end bonuses is our way of retaining workers for next year," Phu said. The Tet bonus is a way of thanking employees for putting in their best when the stay-at-work scheme was in place.

Despite not reaching its annual production targets like Casumina, Thanh Cong Textile Garment Investment at Tan Binh Industrial Park in Tan Phu District still aims to give Tet bonuses to 4,000 employees.

In August the company reported its first monthly loss for the year because of the stay-at-work model’s high costs.

It lost nearly VND6.4 billion compared to a profit of nearly VND23 billion a year earlier.

A worker is seen at Thanh Cong Textile Garment Investment Trading in Tan Phu District, Ho Chi Minh City. Photo by VnExpress/An Phuong

A worker is seen at Thanh Cong Textile Garment Investment Trading in Tan Phu District, Ho Chi Minh City. Photo by VnExpress/An Phuong

Nguyen Huu Tuan, the company's director of human resources, said only half the production target for the year is expected to be achieved, but Tet bonuses are incorporated into the company's regulations.

Usually some 70-80 percent of all employees get two months’ wages as bonuses, but this year, due to the financial downturn, it is expected that would fall to 1.5-1.7 months, he added.

Despite their difficult financial situation, many subsidiaries of the Vietnam National Textile and Garment Group are still looking for ways to pay workers the 13th month salary.

Workers who did not work during the stay-at-work period would get a lower rate than those who did, it said.

While plans for where to raise the funds needed to pay Tet bonuses have yet to be made, the money would be raised from many sources, it said.

Huynh Van Tuan, chairman of the trade union affiliated to the HCMC Export Processing Zone and Industrial Park Authority, said Covid-19 has caused many factories to suspend operations. Others had to cut production and suffer the costs of stay-at-work model, so they will lower this year-end bonuses.

Some businesses have said they will pay Tet bonuses ranging from one month's salary to 50-70 percent of it.

The city's 17 industrial parks and export processing zones are home to more than 1,400 businesses, and when Covid restrictions were imposed less than half of them operated with 18 percent of the normal complement of 280,000 workers.

Tuan said the union would urge companies to pay Tet bonuses.

A survey of 50 companies by recruitment company Anphabe found none could guarantee bonuses this year while 52 percent had paid them last year.

The survey, which also polled nearly 54,300 employees, found 20 percent had been told they would receive no bonus this year, mostly in Covid-ravaged sectors like tourism, aviation, food and beverage, hospitality, media, and entertainment.

Last year the average bonus employees received was VND8.81 million, the highest being VND990 million paid in the financial industry and over VND1 billion in the refrigeration industry by foreign companies.

 
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