Trade unions unable to sue any business owing social insurance

Social insurance debts topped VND14 trillion (US$616.08 million) at the end of March and it is likely to increase now but the VGCL has been unable to sue any business.

Many workers’ rights have been affected after owners of the companies they work for ran away without paying social insurance premiums (Photo: SGGP)

Many workers’ rights have been affected after owners of the companies they work for ran away without paying social insurance premiums (Photo: SGGP)

That was reported at an online dialogue with representatives from the National Assembly Committee for Social Issues, the Vietnam General Confederation of Labor (VGCL) and the Vietnam Social Insurance Agency. The event was hosted by the Vietnam Government Portal in Hanoi yesterday.
Mr. Dao Viet Anh, deputy director of the Vietnam Social Insurance Agency, said that, businesses’ social insurance debt has been upward. By the end of the first quarter, it numbered VND14,019 billion, up 7.1 percent compared to the same period last year.
Most of the debtors are non-state own enterprises. Of these, two HCMC based companies Phuong Trang Passenger Transport Company and Nam Phuong Ltd Company owed VND28.7 billion and VND20.9 billion respectively.
Hanoi based Lilama 3 Company has been VND25.4 billion in arrears with the social insurance fund, VIT Garment Company VND19 billion and Xuan Kien Vinaxuki Motor Joint Stock Corporation.
Binh Dinh based Construction Joint Stock Company No.47 has not paid VND15.7 billion, Dong Nai based Vietbo Company VND19.9 billion and Hung Yen Based Inox HB Company VND14.2 billion.
The most concerning problem is the unrecoverable amount of VND1.4 trillion ($62 million) from companies which have stopped operation, dissolved or gone bankruptcy or from those which owners have run away, Mr. Anh added.
The above debt has affected rights of 193,661 workers as of December 31, 2015.
A representative of the Vietnam Social Insurance Agency said that social insurance debt in fact was much more complicated than reports.
According to data from the General Department of Taxation, Vietnam now has nearly 500,000 businesses operating but statistics by the insurance industry show that only about 235,000 companies are paying social insurance, accounting for 47 percent of total.
Newly effective law change likely needed
The Social Insurance Law has been passed by the National Assembly and issued in 2014 to tackle the situation, in which businesses take advantage of policy loopholes to deliberately evade payment of social premium.
The law, taking effect since January 1, 2016, entitles trade unions to sue businesses for not paying social insurance. More than one year has gone by but trade unions have yet to successfully take any firm to court.
Deputy chairman of the VGCL Mai Duc Chinh said that the social insurance agency has transferred documents of 1,177 businesses in social premium arrears to the confederation by the end of January this year.
The confederation has transferred 1,115 cases to grassroots trade unions to take legal proceedings against the debtors. Eleven unions have gone to law against 77 businesses as of February with 11 files being returned.
The court explained that the returned cases do not come within its jurisdiction and trade unions are not authorized by workers to sue businesses. Some firms have proactively paid their debts so trade unions waive claims.
Mr. Bui Sy Loi, deputy chairman of the NA Committee for Social Issues, said that the law entitles trade unions to sue social insurance debtors because the unions have been established to protect workers’ rights. However grassroots trade unions must be authorized by workers to take the debtors to the court.
Moreover, the unions are getting paid by businesses so they do not dare to sue businesses’ owners. Workers affected by the debts have also not dared to sign authorization letters to take their owners to court.
To tackle the issue, the Social Insurance Law should be changed to no longer entitle grassroots trade unions but their superior organizations to take legal proceedings against social insurance debtors.

By PHUC HAU – Translated by Hai Mien

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