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Wednesday, 06 December 2017 15:23
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Perfection of mechanisms on labor relations to meet the demands of international economic intergration

(LLCT) - Thanks to the implementation of the national renewal and international economic integration policy, Vietnam’s economy has transformed successfully from the central planning mechanism to the market economy mechanism— employment and labor relations are increasingly regulated by the market principles. Moreover, Vietnam’s participation in the International Labor Organization (ILO) in 1992 has promoted and prompted the application of international labor standards for the improvement and supplement of national labor standards and the gradual development of sustainable, harmonious labor relations. To date, Vietnam has approved 21 conventions of ILO(1). Many conditions in various labor standards have been applied into Vietnam’s domestic legislations of the new Labor Code. However, the current legal framework of labor relations in Vietnam is still inadequate and unsuitable with the reality of Vietnam.

1. The current issues of the laws on labor and labor relations

In general, the legal regulations on labor and labor relations in Vietnam have institutionalized the guidelines lines of the Party, to be in line with each period of national development, forming step-by-step international integration and meeting the basic requirements of state management of labor, to ensure the legitimate rights and interests of employees and employers. However, the compliance with labor law is mainly applied only in the state sector, while that of the non-state sector still has many limitations.

Labor disputes, such as strikes, have increased in both size and complexity. According to the statistics of the, “Ministry of Labor, War Invalids and Social Affairs,” from the beginning of 2013 to the end of June 2016, there were more than 1,000 strikes in Vietnam, but all of them did not follow any sort of order or procedure regulated by the Labor Code in 2012.  Strikes mainly occurred in industrial zones such as Dong Nai, Binh Duong, Ho Chi Minh City, Hanoi, Hai Phong . One reason for these strikes includes the inappropriate legal regulations that  are not yet suitable for real life. Another reason is the compliance of the law of both workers and employers is not being taken seriously, the biggest violation is the issue of wages, social insurance, working overtime, occupational safety and hygiene, labor contracts, collective working agreements, and the unserious handling of labor violation of the state management agencies. In the collective economic sector, in cooperatives, there are some labor disputes but they are small in quantity and are all solved by conciliation and negotiation, without the need for strikes.

Most strikes are spontaneous. They have neither a leadership of any trade union organization nor the reconciliation or arbitration of the provisions outlines in the Labor Code.  Most of these strikes end with workers' requests being resolved primarily with administrative measures by state agencies, employers and employees joining the strikes reached agreement through reconciliation and negotiations, with the support of interdisciplinary trade union teams. This process can, in the immediate future, settle these spontaneous strikes, but on the other hand, it eliminates any chance of the formation and operation of labor dispute settlement mechanisms that are in accordance with the law.

The main reasons are that the capacity of local trade union officials is limited; the management of labor law compliance is not serious enough; the work of inspection and examination of labor law compliance does not meet the requirements; inspection force is too thin, slow in enhanced arrangement, with limited quality. According to statistics in 2015, the total number of inspectors in the sector of labor, war invalids, and social affairs in Vietnam is 500 officials (in which, the number of the inspectors on labor policy, occupational safety and hygiene is about 300 officials). Supportive mechanisms for the settlement of labor disputes in accordance with the law are not actually involved in the process of resolving these strikes.

2. The representative organizations of workers and employers

Trade unions play a vital role in the socio-political life of the country - they are an important socio-political organization that protects the rights of workers. At present, when the economy of the country is transformed under the market mechanism, integrated more and more deeply with the worldwide economy, trade unions are facing many difficulties, especially in non-state enterprises:- The organizational development of local trade unions and the development of non-state sector members have been implemented and refined for many years; however, the results are still limited. The reason for this is that a part of the employer does not want to establish a local trade union, even make it difficult with many obstructions in the establishment of local trade unions. Employees have not yet understood the roles and benefits that trade union organizations bring to them, so they are not eager to establish a trade union.

- A number of local trade unions being set up at many enterprises, especially foreign-invested enterprises, are neither qualified to discuss the legitimate rights of the employees nor capable to negotiate and protect  such rights. A number of the union presidents also serve as members of the executive management boards to the enterprise (deputy director or deputy manager or manager of different departments). This fact has hindered the rightful representation of workers in trade unions. The Resolution No 06-NQ/TW of the 4th Congress of the Party Central Committee, (12th tenure), confirmed that: "To ensure the establishment and operation of the organization of employees at enterprises in accordance with the process of completing the legal framework, the strengthening of management tools and measures to facilitate the smooth and healthy operation of these organizations in accordance with the provisions of Vietnamese law in accordance with the ILO Principles." This is a breakthrough in recognizing employees' representative organizations in line with the reality of diversified labor relations in many developing countries.

Regarding the representative organizations of employers, there are two main organizations - the Chamber of Commerce and Industry of Vietnam and the Vietnam Union of Cooperatives.

Vietnam Chamber of Commerce and Industry has been participating in the trilateral mechanism and cooperating with state management agencies to participate in policy making, bridging investment and services to create the environment beneficial for employers and business community. However, the operation of this agency is limited. Most of the current employers' organizations do not have enough authority to decide, actually represent the employees to be in dialogue, negotiate with the employee collective representative organizations (trade union) to sign collective labor agreements, consult, conciliate, and settle labor disputes and strikes in enterprises.

The Vietnam Union of Cooperatives acts as a co-agent for employers at the national and lower levels. However, in practice, the operation of this agency is still limited.

3. Institutional mechanisms to enforce labor legislation and support labor relations

Regarding state management

In recent years, the content of state management on labor relations has gradually been supplemented and improved. The government has approved the establishment of a department specializing in labor relations and settlements of labor disputes and strikes. However, the mechanism of negotiation, mediation, and reconciliation has not been fully understood; the mechanism has not been properly focused, so the implementation is not really effective. The State administration of labor in local governmental organizations has not satisfied the requirements while a large number of employers have deliberately avoided fulfilling the law registrations and do not care about the rights of the employees. The level of awareness and understanding of labor law of the employees is limited; they lack the cultural behavior and knowledge associated with labor relations. Cross-sector coordination has not been synchronized and the development and promulgation of labor policies is still very slow; they are not in line with the reality of enterprises and employees.

Mechanisms on Arbitrators and labor courts

Arbitration is a conditional provision taken before a labor dispute is brought to court; however, in practice the Arbitration Council does not yet play that role in resolving labor disputes. Court judgments are also still inadequate. The number of labor disputes is very high, yet the number of dispute cases brought to the court is very low, most of them are personal labor disputes, because  the civil procedure is prolonged, tedious, and unpractical. The proportion of cases judged by the Court of First Instance to be modified is relatively high, many cases have been prolonged.

Mechanisms for consultation and supports

  The mechanisms and organizations for consultation and support, including social dialogue, consultation and negotiation, are new concepts to Vietnam. The legal regulation on this issue is still developing; the trilateral mechanism (State - Trade union and employer) in labor relations has not been organized and operated in line with the development of the socialist-oriented market mechanism.

4. Orientation to renew activities of organizations representative of employees and employers

  Renewal of trade union activities

One priority to renew trade union activities is to build up the local trade union organization in non-state enterprise. Industrial and export processing zones are areas of focus for a large number of enterprises, especially the private enterprises and FDI invested enterprise because they use a large quantity of employees, meaning they are also the places for labor disputes and strikes. Therefore, it is necessary to concentrate in mobilizing and establishing local trade unions who are a trustworthy and transparent representative for groups of employees, who are strong and competent enough to discuss and negotiate with the representative of the employer in order to sign and commit to a suitable collective labor agreement. Moreover, it is also vital to provide the trade union of the industrial zones and export processing zones with full-time and part-time personnel who can actively discuss and negotiate with representative organization of employers in these areas to sign the collective labor agreement. In such enterprises without representative organization of employers, the trade union should be active to propose suitable condition of employee using for that enterprise. Currently, the organization of trade unions in industrial zones and export processing zones is a practical and suitable solution which needs to be further studied and implemented in pilot scale and come to the summary, assessment, experiences and implementation in large scale.

Renovation of the operation of the employer representative organization

The representative organization of the employer must be competent enough to decide, dispose and represent employers in dialogue, discussion, negotiation signing and commitment to follow all conditions in the agreement regarding rights and responsibilities of employees and employers in the enterprise.

Based on the current practical status, according to the real representative principle, at the national level, it is necessary to establish the concrete organization model representing the employers to replace the alternate model between the Vietnam Chamber of Commerce and Industry and the Vietnam Union of Cooperatives. At the local level, in order to solve the problem of inadequate and limited labor relations, it is necessary to focus on building representative organizations of employers of industrial zones and export processing zones, conducting dialogue, negotiation and negotiation with the trade union of these areas, and basically settling arising issues related to the interests and obligations of laborers and employers

5. Several solutions to improve the institutional system of labor relations

  Firstly, improve the capacity of the court judicial institution on the basis of the reorganization of the court system under the Central Judicial Reform Project; specializing judicial works of labor law trials; building and allocating a team of specialized judges with a professional capacity to handle labor disputes according to the actual demands of each area in order to improve the quality and efficiency of timely settlement of labor disputes at courts.

Secondly, make use of diverse and flexible labor arbitration institutions. When support institutions are officially formed and the mechanism of dialogue and negotiation operate effectively, the arbitration will be selected by the disputing parties. Therefore, the provincial Labor Arbitration Council should be strengthened as a compulsory arbitrator whose function is to reconcile different collective labor disputes on interests in accordance with the provisions of the Labor Code.

Thirdly, strengthen the capacity of the state management agencies on labor relations. It is needed to specify the agencies responsible for state management of labor relations, which clearly states: management content, management mechanism, management decentralization and necessary conditions for the state management implementation. At the same time, it is necessary to state clearly which contents the State should support with specific mechanisms and institutions. It is also vital to strengthen the inspection apparatus which is qualified to satisfy the requirements, to change the mode of inspection, to add more suitable rights to decide directly to the inspectors handling the disputes. We need to increase the responsibility for the heads of state management agencies at all levels from the central to local levels regarding the situation of labor law violations committed by enterprises under their respective management localities.

Fourthly, continue to improve and strengthen the capacity of the consultative institutions, enhance the legal framework on the organizational structure and functions, duties and powers of the Labor Relations Commission. Improve the capacity and coordination of the National and Local Labor Relations Committees. Implement the mediation mechanism through voluntary negotiation and make it an obligation to reach an agreement after mediation. Only after the unsuccessful reconciliation will the dispute be tried in court. Research and replace the local Conciliation Council by the Advisory and Reconciliation Council; the foundation and operation of this organization does not require the fixed trilateral mechanism. The state labor relation agency is only involved in the counseling and mediation process with the role of the witness, but not joining in the council.

Fifthly, complete the trilateral coordination mechanism in labor relations, delineate and perform well the functions of the parties, strengthen the trilateral coordination mechanism at the central level and promote the formation and perfection of this coordination mechanism at the subnation and sector level to create the foundation for the establishment of regular dialogue and consult between the parties on issues related to labor relations. The basic and long-term solution is to establish a genuine dialogue and negotiation mechanism between the two main subjects who are the collective representative organization of employees and employers. This is a prerequisite to eliminate labor disputes and strikes, towards building a harmonious, stable and progressive labor relationship. The perfection of labor legislation shall be based on the international labor standards in the context of globalization and deepening international economic integration. The Vietnamese labor law system needs to have greater access to international labor standards, not only limited in the 21 conventions of ILO that Vietnam approved, but also to other basic principles, namely the removal of forced laborhood, full employment and humanity, free association and collective negotiation, the fight against discrimination, and warranty of the basic rights of employees in the workplace.


(1) Vietnam has approved 21 Conventions of ILO (20 conventions is currently effective), in which there are 5 out of the 8 basic Conventions (Convention No. 29 on Forced Labor, Convention No. 100 on equal payment and Convention No.111 on employment discrimination, Convention No. 138 on minimum working age and Convention No. 182 on worst forms of child labor). Source: http://www.ilo.org, accessed on February 20th, 2017.

MA Nguyen Hoang Ha

Office of International Labor Organization (ILO) in Vietnam

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