Thousands of Vietnamese workers at a major footwear factory were on strike for a sixth day Wednesday over a social insurance law in a rare challenge to government policy.

Several thousand people at the Taiwanese-owned Pou Yuen factory in southern Ho Chi Minh City began the stoppage last Thursday. Pou Yuen Vietnam, which employs more than 80,000 workers, is a subsidiary of Pou Chen Group and makes footwear for companies such as Nike and Adidas.

The workers continued the peaceful strike in the factory's compound Wednesday under a heavy police presence. They marched along Highway 1 with banners and beating drums on Monday and Tuesday, blocking traffic on the main road artery.

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They were protesting a new law, which comes into effect next year and says that workers will get a social insurance monthly allowance when they retire instead of getting a one-time payment if they resign. The striking workers said that if they quit earlier, they would have to wait until their retirement age — 60 for men and 55 for women — to get the allowance, and they prefer the lump sum to pay for their daily needs while seeking new jobs.

Vietnam is hit by several hundred labour strikes a year, but they are mostly over poor working condition and low pay. Protests over government policies are rare.

Vice Minister for Labor Doan Mau Diep met with the workers Tuesday and said that his department would propose to allow them to choose whether to get one-time social insurance benefits when they quit or receive them upon retirement. His words were met with applause from the workers, according to state media reports, but if was not clear that he had persuaded them to stop the strike.

Dang Ngoc Tung, the president of Vietnam General Confederation of Labor, said in a statement on the trade union's website that the strikers should return to work and authorities will address their concerns.

He also told them not to allow "bad elements" to take advantage of the situation to stir up unrest that would affect security, order and the company's operations.

Nearly 70 per cent of Vietnam's population of 90 million are under 40, providing a major workforce for many multi-national companies.