About 3,000 employees from the Yamaha Motor plant in Hanoi walked off the job on Monday, said the official, who refused to give his name.

Management told the other 2,000 workers to stay home Tuesday while discussions continued with the union, he said.

Vietnam bans labour unions that are independent of the ruling Communist Party.

Workers are seeking an increase in the basic monthly salary from 1.65 million dong ($78.57) to 2.03 million dong along with a rise in their housing and other social allowances, the official said.

The company had already agreed to a pay rise for some workers, but that was before the government increased the price of subsidised petrol by 18 percent in late February, he added.

After fuel prices rose, electricity rates increased by 15 percent on March 1, adding to the worries of citizens trying to cope.

Vietnam's inflation reached 12.31 percent year-on-year last month, according to official data, far higher than in neighbouring states, although rising consumer prices are emerging as a top concern for policymakers throughout Asia.

Pledging that fighting inflation is its top priority, the government has unveiled measures to rein in prices and stabilise the economy, which is facing a complicated mix of challenges. These include a struggling currency and a trade deficit that reached an estimated $12.4 billion last year.

Agence France Presse - March 8, 2011