Witnesses in the industrialised suburbs of Ho Chi Minh City said hundreds of workers massed peacefully inside and outside the factory owned by Pou Yuen Vietnam, a footwear maker for firms that include Nike and Adidas and brands including Lacoste, Converse and Reebok.

Pou Yuen, which employs close to 80,000 workers, is controlled by Chinese shoemaker Yue Yuen Industrial Holdings, a subsidiary of Taiwan-listed Pou Chen Corp .

Strikes and protests are rare in communist Vietnam, which has been tightly controlled by one party for four decades. It is known for taking decisive action to thwart the kind of labour and civil unrest that has affected other manufacturing rivals like China and Cambodia.

That has earned Vietnam a reputation as a safe bet for firms such as Gap, H&M and Inditex’s Zara. Such companies have helped fuel annual export growth of 15.8% last year in garments, to $20.8 billion and 21.6% in footwear, to $10.2 billion.

The employees are disgruntled about a social insurance law taking effect from 2016, which restricts the scope of entitlements for a lump sum payment if they leave.

The strike is another blow for a factory that was among dozens hit by anti-China rioting last year during a maritime diplomatic row between Hanoi and Beijing.

It comes as Vietnam’s tries to lure big firms with its cheap labour, tax breaks and its looming accession to Free Trade Agreements (FTA) with its biggest export partners.

Vietnam is in the final stages of FTA talks with the EU and hopes soon to conclude a Trans Pacific Partnership (TPP) in a region covering 40% of global GDP, including the United States, Japan and Australia.

Source: The Telegraph