Protests at cosmetic company caught up in red tape

Hundreds of employees of Thuy Loc Company Ltd. staged a protest, asking for their salaries and insurance benefits after the company claimed bankruptcy.

On March 23 around 250 workers gathered at Paragon Trade Centre, No.3 Nguyen Luong Bang Street, D7, HCM City, asking to speak with Le Hoai Anh, General Director of the company, to negotiate payment of salaries, that have been neglected for two months, as well as a return of their insurance records.

The incident caused disquiet in the area, making it necessary for local police to step in and invite representatives of the protest to meet with company officials.

Many of the protesters have worked at Thuy Loc Company for decades. The company has also gone on record to praise these employees' contribution.

Still, on January 30th, Le Hoai Anh, the director, suddenly terminated labour contracts with all staff, informing them that the company was going to halt operations on January 31.

At the time she promised to settle all debts to employees in accordance with the law.

The employees, however, have yet to receive any of the payment or benefits that were promised them. The workers were shocked, when on March 22nd, Le Thanh Van Khuong, Personnel Manager, announced that the company’s account has been blocked by Shiseido Cosmetics Vietnam (SCV), and would be unable to pay back-wages or social insurance for the months of January and February. 

The protesters were asking, not only for their back pay and social insurance, but also demanded a 2-month severance pay for the illegal termination of their contracts.

Thuy Loc became the exclusive distributor for Shiseido products in Vietnam in 1997. In January 2010, Shiseido Cosmetic Vietnam took over distribution from Thuy Loc, turning the latter into a retailer.

After a series of complicated legal disputes between SCV, Thuy Loc Company Ltd., and 13 other investors in their retail network, 40 retail outlets were shut down, leaving 200 employees without jobs.

Thirteen individuals who made 30-60 per cent investments in several retail outlets have said they were preparing to sue both SCV and Thuy Loc Company to the tune of VND97 billion (USD4.7 million) for losses suffered because of unfair trade practices.

Meanwhile, director Le Hoai Anh has said that her company would also sue Shiseido Cosmetics Vietnam for violating a management contract.

Previously, Shiseido Cosmetics Vietnam sued Thuy Loc, claiming that the latter owed them VND45 billion (USD2.1 million). To make things more complicated, last month, the HCM City People's Court decided to freeze the bank assets of Thuy Loc, which Anh said, had a balance of VND100 billion (USD4.7 million).

She added that the company would have paid salary to their staff if their accounts hadn't been frozen. She claims that, even though SCV is the actual owner of the company, they are still owed a total of VND40 billion (USD1.9 million).