VietNamNet Bridge - According to a General Confederation of Labor survey, there are about 300 industrial zones (IZs) and export processing zones (EPZs) throughout the country, attracting 2.8 million workers.

Foreign Invested Enterprises (FIEs), when recruiting workers, tend to choose those aged 15-18 and will not accept workers who are over 35 years old.

In order to avoid the charge of violating the labor law, FIEs plead low demand, renovation of technology or changes in business location to terminate labor contracts with workers who are over 35.

In many cases, employers lay off workers without stating any reason.

Nguyen Huu Tri from the Institute of Sociology and Management Sciences commented that this is the other side of the ‘FDI (foreign direct investment) medal’.

Tri said FIEs lay off workers aged over 35 because the workers have worse health than young workers. Since they have been working for enterprises for a longer time, employers have to pay higher salaries and allowances. 

There are about 300 industrial zones (IZs) and export processing zones (EPZs) throughout the country, attracting 2.8 million workers.

“FIEs prefer young workers to economize on production costs and to have higher productivity,” he explained.

“It is a growing tendency for FIEs that they will step by step replace the labor force,” he said. “They will only retain the older experienced high-ranking managerial staff.”

A labor expert warned that the refusal by FIEs to use workers over 35 is a waste of the labor force, leading to increased unemployment risk.

The workers over 35 don’t have many opportunities to find new jobs if they are sacked by employers. They cannot return to their home villages to farm because the land has been used to build industrial zones.

Tri commented that Vietnam, in an effort to attract as much FDI as possible, offers many investment incentives to investors. In many cases, though courts have decided that FIEs must rehire laid-off workers, workers cannot return because FIEs place roadblocks for them. 

Le Si Thiep from the National Academy of Public Administration commented that it is necessary to tighten management over FIEs to avoid problems in labor relations. He said Vietnam has a legal framework on the issue, but the laws have not been strictly obeyed.

Experts commented that tax incentives offered by Vietnam to foreign investors help attract business and improve the competitiveness of the country. However, when things go beyond the framework, there will be a “competitive race to the bottom”.