POST-SOCIALIST TRADE UNIONS, LOW PAY AND DECENT WORK
VIETNAM RESEARCH TEAM
FIRST REPORT
THE POLICY AND PRACTICE OF THE VIETNAMESE GOVERNMENT AND TRADE
UNIONS IN RELATION TO LOW WAGES AND POOR WORKING CONDITIONS
Research Team:
Do Quynh Chi
Tran Tuan Doanh
Nguyen Ngoc Thuy
Dang thi Hai Ha
Hanoi, March 2006
1
Methodology
From late December 2005 to February 2006, the research team was divided into three groups,
each focused on one part of the Report. Group 1 worked on the Government policy regarding low
wages and poor working conditions or urban workers; Group 2 collected materials on VGCL
policy discussion at national level and it coordination with the provincial and industrial unions;
Group 3 specialised in the new initiatives and best practices of unions at provincial and
enterprise level.
A large number of materials have been gathered by the three groups including legal documents
(laws, policy papers, guidelines, directives etc.), publications (seminar papers, articles) and
unpublished documents (internal discussion notes, internal-circulated memos). After a series of
strikes on higher wages happened in the South (starting in the late December 2005 and still going
on), the team leader (Ms. Do Quynh Chi) conducted a mission to Ho Chi Minh city to interview
relevant people including the DOLISA officials, provincial VGCL officers, employers and unions
of industrial and processing zones (the mission report is put in the Annex) on strike causes, their
reactions to the problem, especially the roles of the union in these strikes and VGCL’s
perspectives for future path.
After the first draft was developed in early March, the researchers found it necessary to make
further interviews with officers from provincial and industrial organisations to study the
coordination and links between the central and provincial/industrial unions as there is a loophole
of this part in the published documents available to us. So two interviews were made with an
offcial from HCMC VGCL and one from VGCL central. Most interviewees preferred not to be
mentioned by name in the report. Researchers took note of the interviews rather than recording at
the request of interviewees.
The final draft was sent around to all researchers for comments before it was submitted by e-mail
to Mr. Tim Pringle and Prof. Simon Clarke.
2
1. Government policy regarding low wages and poor working conditions of urban
workers
Overview of the government’s strategy
Much have been written about the remarkable achievements that Vietnam gained after 20
years of Doimoi (reform): the annual GDP growth rate has been maintained constantly at 7%
(8.4% in 2005) and the country is accelerating its integration into the world economy by acceding
to the WTO. These progresses give hope for a second wave of reform that is stronger and more
in-depth. However, the success of reform, the first and second wave alike, depends heavily on
Vietnam’s competitiveness in the world and the improvement of people’s, particularly workers’
lives at home.
From a bird view, the growth of the economy, especially the booming-up of the nonpublic sector since Doimoi has strongly boosted the average income of urban workers. A recent
report by the Ministry of Labour, Invalids and Social Affairs (MOLISA) showed that the per
capita income of workers in the FDI (foreign-invested) sector in 2005 was 2,180,000VND/month
(approx. $140), that in the private sector was 1,400,000 VND/month (or $90), and in the Stateowned enterprise sector, it was 2,400,000VND/month (or $152). Though still low by regional
standards, these figures are encouraging taking into account the current national minimum wage
of 350,000VND/month ($22).
Certain progresses have also been made in the wage determination structure of Vietnam.
Even though the Soviet-model wage table system still lingers to the public service and SOEs, the
non-public enterprises are free to determine wages based on market principles. Still, they have to
comply with two MWs: one for FDI sector and the other for all remaining enterprises. Though
limited, this reflects an on-going effort to lessen the government’s intervention in wage
determination. In the non-public sector, theoretically, wages should be set in consultation with
local unions. As CBAs are negotiated, unions can request for annual wage increase for workers.
In reality, however, since collective bargaining has not become a common practice in Vietnam
and local unions remain too weak to negotiate CBAs of added value for workers 1, wages,
especially those of workers in labour-intensive industries such as textile and garment, footwear
and wood processing, are determined only by employers at very low rates. Unskilled, new
recruits often receive 400,000-500,000VND/month in a Vietnamese private company and
630,000-700,000VND/month in a FDI enterprise (prior to 1 February 2006). As reported by the
HCMC VGCL, a number of workers have received the same pay of 630,000VND/month for the
last 10 years2. Also, with industrial unions established only among state-owned companies, no
CBA has ever been signed at industrial level. Therefore, the VGCL can only somehow affect the
wages of their members by lobbying for higher minimum wages at the policy level. In fact, by
either participating in the drafting committee for new wage policies (for instance, the drafting
committee of the proposal on wage reform lead by MOLISA) or consulting on wage-related
under law documents (decrees on adjustment of MWs), VGCL central has been a strong voice
advocating for setting up a separate MW system for FDI sector and for raising the national MW.
With a socialistic tradition of sympathy for workers and attention to social values,
Vietnamese government declared their pursuit of the twin goals of economic growth and social
development. Despite the fact that cheap labour remains one of the major comparative
advantages of the country, there have been good signs of efforts to improve working conditions.
1
According to MOLISA strike research 2006, a vast majority of CBAs are replication of the legal minimum
standards.
2 Interviews with Mr. Mai Duc Chinh and Nguyen Hong Son from HCMC VGCL on 16 March 2006.
3
At the governmental level, MOLISA, Ministry of Home Affairs and Ministry of Finance are
working on a 5-year plan (from 2003 to 2007) to raise the national MW from
290,000VND/month to 400,000VND/month.
The 1994 Labour Code and its amendment in 2002 have apparently revealed
inappropriateness, especially in terms of collective bargaining, labour dispute settlement, and
social insurance. After 4 years since 2002, according to MOLISA strike research (2006), only
20% of enterprises have got CBAs but over 90% of these are simple replication of the labour law
regulations rather than the outcome of real negotiations between workers and employers. In terms
of dispute resolution, from 1995 to 2005, there were as many as 1,056 strikes in Vietnam, all of
which were wildcat strikes. No strike has followed the legal dispute settlement procedures and
only few disputes (about 10 cases in the last 10 years in Vietnam) were referred to the
Conciliation Council and Arbitration Council – the two official bodies established in accordance
with to Labour Code to settle disputes. The legal procedures, clearly, have not been functioning
at all.
Also, upon perception of the aging trend of the population, the government needs to
reform the social insurance system. Its plan now is to develop a Social Insurance Law which
merges the Social Insurance and Health Insurance schemes into one and add a voluntary social
insurance scheme for agricultural and self-employed workers in the informal economy. The
whole Social Insurance Scheme, then, will be administered by MOLISA in coordination with
Vietnam Social Insurance (VSI). As the Social Insurance Law is to be approved by the National
Assembly by the end of 2006, the Labour Code Chapter on Social Insurance will be amended
accordingly3.
Recently, the legal framework for occupational safety and health (OSH) has been
improved with Decree 109 (December 2002) providing regulations in terms of working hours and
rest for workers; Decree 110 (December 2002) providing instructions on some OSH-related
articles in the Labour Code (OSH measures, quality OSH equipments, medical checks for
workers exposed to hazardous conditions, training etc.); Decree 113 (April 2004) on
administrative sanctions on violations of the labour law (including violations of OSH-related
regulations); and Circular 20 (June 2004) enhancing the implementation of OSH in agricultural
sector.
After the Hygiene Inspectorate which used to be affliated to the Ministry of Health was
merged into the Labour Inspectorate (Policy and OSH Inspectin) under MOLISA 3 years ago,
MOLISA now is principally in charge of the enforcement of the Labour Code. The trade union,
in principle, has the mandate to support and coordinate with MOLISA to enforce the labour
legislation by reporting, training OSH officers in enterprises and informing the inspectors of
wrong-doings but in fact, this can only be practised in the state-owned sector.
As admitted by a number of VGCL officials, there exists no working mechanism to
enforce the Trade Union Law. And despite the planned revision of the Labour Code by 2008,
VGCL has no intention to amend the union legislation yet.
At the enterprise level, the government seems to encourage the corporate social
responsibility (CSR) movement among the export-oriented industries. With strong CSR
initiatives from influential MNEs such as Nike, Gap, Adidas, among others, Vietnamese
suppliers now have to adopt a number of codes of conduct (for example: WRAP, SA 8000, Nike
code of conduct etc.) focusing on higher-than-minimum-standard labour and environmental
requirements such as no child labour, no forced labour, improved occupational safety and health
system, remuneration etc. As long as the initiatives enhance enterprises’ competitiveness and
3
Chapter 14 of the Labour Code will be revised by 2006 but the whole Labour Code is expected to be amended by
2008 (according to an interview with MOLISA officials)
4
improve working conditions, they receive ‘green signals’ from the government. The VGCL,
however, remains silent on the issue.
New Directions
As the date of WTO accession comes closer4, the pressure of reform is pushing Vietnam
to a historical turning-point. The challenges of WTO accession plus recent strikes on wages and
working conditions are accelerating the government’s search for new directions.
As mentioned earlier, there exist two MWs in Vietnam: the FDI’s and the national
minimum wage. The national MW (currently 350,000VND/month) not only serves as minimum
rate to protect workers, but it is also linked to public wages and social benefits. So according to a
report by the Wage Reform Steering Board of MOLISA in 2004, in order to raise 1VND for a
worker in the public sector, the government has to pay 6VND to cover also rise in pension, social
benefits, allowances for veterans etc5. Therefore, it is extremely difficult for the government to
raise the national MW. Though the MW was increased to 350,000VND/month from 290,000
VND/month in October 2005, the salaries of public workers, especially those working in public
hospitals, training institutions, government offices remain extremely low. In Vietnamese private
enterprises, due to weak unions, absence of real collective bargaining practice and insufficient
labour inspection, wages of workers, especially newly-recruited, low-skilled ones, are just
slightly higher than the MW level (approx. 400,000VND-500,000VND).
Almost seven years after the issuance of Decree 53 on minimum wages for the FDI sector
which were significantly higher than the national one6, workers started walking out for higher
MWs (see Annex 1 for further details).And the government did respond to their appeal. After the
wave of strikes in early 2006 which involved over 140,000 workers in 150 strikes, the
government issued Decree 03 on 6 January 2006 (effective on 1 February 2006) to raise the FDI
MWs to 870,000VND ($55), 790,000VND ($50) and 710,000VND ($45) while keeping the
national MW the same. As anticipated, this move soon lead to a second wave of strikes of
workers in the non-FDI sector (which are still going on) demanding for raising the national MW
to the FDI MW level. Nonetheless, as the Minister of Labour explained in a press conference in
January 2006, merging two MWs into one is a long-term goal, probably accomplished in 2015
rather than now. The government has been confronted with budget constraints, pressure from
foreign investors and the need to maintain Vietnam’s competitiveness.
Although the demand for higher MW by non-FDI workers may not be satisfied now, the
last waves of strikes posed an unprecedented upward influence for better wages7. The
government, as a result, is looking for other measures to improve wages and working conditions
while delaying the adjustment of MWs.
First, the government attempts to strengthen its cooperation with the union and
employers’ organisations to develop channels for tripartite negotiations. Decree 145 issued in
2004 formalized the tripartite consultation mechanism at national level. Decree 145 allows the
nationally-recognized social partners (the Vietnam General Confederation of Labour (VGCL),
4
Vietnam is wrapping up its negotiation for accession with the United States, the last bilateral negotiating partner
and it is highly expected that the country will acquire official WTO membership in 2006
5 There are 6 millions beneficiaries of pension, social benefits and veteran allowances in Vietnam (N.M.Cuong,
Social Impacts of WTO Accession, ILO Hanoi: 2006)
6 Decree 53 issued on 26 March 1999 provides for 4 MWs in the FDI sector: 626,000VND ($45) for Hanoi and
HCMC; 556,000VND ($40) for suburbs; 487,000VND ($35) for other areas; and 417,000VND ($30) for areas with
special difficulties according to the exchange rate at that time.
7 The most important demand of strikers was higher wages but they also
complained about meals, working hours, rest time (only 30 minutes for lunch)
etc. However, they did not raise the latter issues as official demands.
5
Vietnam Chamber of Commerce and Industry (VCCI) and Vietnam Cooperative Alliances
(VCA)) to be consulted by the Government on formulation of labour-related policies and laws.
Until now, however, this Decree has yielded few meaningful impacts on Vietnam’s industrial
relations system. No permanent tripartite body has been set up and most of the time, the social
partners are consulted on case-by-case basis only. At provincial level, as VCCI has only 17
branches with limited capacity and VCA represents only the cooperatives rather than companies,
tripartism remains infeasible. In bigger provincies and cities where VCCI and VCA set up
permanent branches, although they participate in provincial tripartite labour arbitration councils
together with VGCL and the local labour administration, this mechanism has been largely
ineffective.
However, the provincial labour authority and the local VGCL have been working closely
with each other to fire-fight wildcat strikes. Normally, when a strike happens, the DOLISA
together with the provincial VGCL will form an ad hoc strike task force to visit the strikeaffected enterprise in an effort to settle the conflict. Recently, in order to find a solution to the
spate of strikes, Ho Chi Minh city, Binh Duong and Dong Nai people’s committees have
formalized regular strike task forces comprising of DOLISA, VGCL and VCCI staff. Though still
controversial, this initiative has provided these provinces with a working substitute to the
ineffective legal strike-settlement procedures.
Second, as discussed earlier, facing with severe criticisms over the ineffective legal
dispute settlement procedures from both workers and employers, the government is going to
revise the Labour Code, starting with Chapter 14 on dispute settlement procedures. MOLISA
plans to submit the draft revision of chapter 14 to the National Assembly by June 2006 and it
may be approved by October 2006. The first draft of Chapter 14 revision (Annex 5) has been sent
around social partners for comments since January 2006. As usual, both VGCL and VCCI have
organised a number of internal discussions on the Draft both at provincial and national level to
prepare formal comments to send to MOLISA (please refer to Annex 2 for the initial draft of
VGCL’s comments on Chapter 14 revision).
In parallel with Chapter 14 revision, an inter-ministerial action plan on developing sound
industrial relations (see Annex 6) will soon be promulgated by MOLISA, VCCI, VCA and
VGCL. The latest draft of this action plan shows an encouraging shift of attention from firefighting strikes to prevention of disputes by promoting the practice of collective bargaining and
social dialogue at the workplace. There have been also proposals within the VGCL and
governmental circles about setting up a collective bargaining department in the union system and
an industrial relations unit in MOLISA. If approved, these two units will serve as specialized
focal points that coordinate efforts to improve industrial relations in the country.
In comparison with China or Vietnam itself ten years ago, the Vietnamese political
regime now seems to be much more tolerant of wildcat strikes and open debate on such ‘sensitive
issues’ as the effectiveness of VGCL, government’s intervention, workers’ rights etc. This
tolerance, hopefully, will help stir up healthy debates among social partners and other
stakeholders and lead to progressive changes in the government’ policy on wages and working
conditions.
2. VGCL strategy and policy discussion at the national level
Analyzing the causes of recent strikes, experts often point to the ineffectiveness of
enterprise unions in representing and organizing workers. Though local union’s weakness is no
longer a secret, this time, the strikes have shaken the whole VGCL system from local to central
level, posing critical questions about the meaning and goals of the union.
6
If it were not because of wildcat strikes, on surface, it seems there would have been no
change in VGCL. Assuming the dual roles of upholding the labour legislation and protecting
workers’ interests in theory, VGCL has been taking part in policy consultations, governmental
meetings, and organizing social events for its members as it has always been doing since its
foundation. However, the fact that none of the 1,056 strikes from 1995 to 20058 was organized by
the union and the increasing trend of workers in the non-public sector refusing to join union have
made it visible that VGCL has not been doing enough to protect workers’ interests. At the same
time, VGCL’s inability to stabilize industrial relations at the local level has indirectly contributed
to the destabilizing economic and investment environment of the country. VGCL, therefore, is
under pressure from both the workers and the government to reform itself to respond to the new
demands of a transitional economy. Unfortunately, at the moment, it appears that VGCL has not
been able to clarify its way forward to overcome the conflict of its dual roles: serving as a semigovernment agency or a protector of workers’ interests.
Though local unions have not been able to lead a single strike so far, the VGCL central
has always encouraged (and assigned) provincial VGCL officers to take an active role in the
settlement of strikes together with the labour administration. A typical scenario of the de facto
strike settlement would be9:
8
9
Statistics provided by MOLISA (February 2006)
Developed based on strike researches by VCCI (2004) and VGCL (2005)
7
Labour disputes caused by: (i) violation of the employers; (ii)
inconsistency (misunderstanding) during implementation of company
policies; (iii) demands by the workers for better interests
Wildcat strikes by workers
Enterprise Union and/or the Employers notify
labour management authorities (HEPZA,
DOLISA) and/or provincial VGCL/HEPZA
Union.
The Joint Task Force (comprising HEPZA/DOLISA
and VGCL/HEPZA Union + press) meets with the
workers to investigate reasons for strikes and demands of
the workers
The Joint Task Force meets with the employer, forwards
the demands of the workers to the employer and
negotiates with the employer
In most cases, the employers satisfy all
or some of the demands
The Joint Task Force persuades the workers to come back to
work and persuades the employers to pay salary for strike days
to the workers to sustain good working relationship.
Though active in protecting workers during strikes, the union fails to recognize the
genuine causes of these industrial actions. In the most recent strike research conducted by VGCL
central in 2005, the union pointed to right violations by employers as the major reason for
disputes and wildcat strikes. Also, in recent internal discussions among high-ranking VGCL
officers (at central level), many claimed right-violation as the only reason for disputes and
strikes, denying the acknowledgement in the Draft Chapter 14 of conflict over interests as the
second cause of strikes10. Moreover, some unionists even blamed the local authorities for
embracing foreign investment at the expense of workers: “some provincial authorities are laying
red carpet on the back of workers to welcome foreign investors”11. However, the emergence of
interest-based disputes has been figured out in quite a few studies by independent researchers.
The ILO Discussion Paper on Strike and Industrial Relations (2004) clearly pointed to conflict of
interests between workers and employers as the cause of over 50% of surveyed strikes (See
Annex 4 for details). Surprisingly, this new development is better understood by provincial
unionists than the national ones. Mr. Khai, an officer in Ho Chi Minh city VGCL explained in an
interview with the Laodong Daily: “Workers used to go on strikes against law violations of
10
In the current Draft of Chapter 14 Revision, disputes are classified into right-based disputes and interest-based
disputes. Consequently, the dispute resolution procedures for each type will significantly differ.
11 Mr. Mai Duc Chinh from central VGCL in a tripartite roundtable meeting on
dispute resolution held by the ILO in March 2006.
8
employers. But now they also walk out for better meals, shorter working hours, higher wages and
bonus”.
In the recent spate of strikes, VGCL’s reactions help us take an in-depth into the mindset
of the unionists in face of the current pressures. As wildcat strikes broke out in the late December
2005 at large scale, while sending provincial unionists in TFs to help settle conflicts, VGCL
leaders interpreted workers’ demands as requests for adjustment of FDI MW rather than demands
for higher wages and better working conditions (see Annex 1 for more details). Consequently,
VGCL vigorously called for the government to raise MWs for FDI workers while ignoring the
fact that the ineffectiveness of unions at enterprises in negotiating for better wages and conditions
for workers is attributed to the crisis. As can be seen in the series of articles and interviews of the
VGCL chairwoman and other top unionists (Annex 1), few words were spoken about their
weakness but only focusing on the slow reaction and poor enforcement capacity of the
government.
However, when the situation calmed down, there have been signs of a reform inside
VGCL. In mid-February, VGCL Chairwoman toured the strike-affected provinces in the South
and made important personnel changes. The more capable, reform-minded officers have been
promoted or moved to the strike-vulnerable regions (in the industrial and processing zones, for
example). Moreover, in the latest official comments on Draft Chapter 14, VGCL admitted that
union weakness is one of the five major causes of strikes (Laodong Online, 6 March 2006).
Within the framework of Chapter 14 revision, therefore, the union is lobbying for simpler, more
effective dispute settlement procedures with the involvement of higher-level unions (provincial
level) as a member of strike task forces or a mediator between workers/local unions and
employers. At the same time, VGCL strongly urges the government to strengthen enforcement
(labour inspection) of the labour law as an important measure to prevent disputes and strikes as
they argue that law violations by employers present the biggest cause of wildcat strikes.
Unfortunately, little has been discussed in the VGCL at the national level about specific measures
to promote social dialogue at workplace and collective bargaining capacity of local unions. This,
to some extents, reveals the legacy of the centrally-planned economy in which the union
embraces a legalistic approach and relies on the government to solve union problems.
Another priority for the VGCL both at local and national level is to improve recruitment
in the non-public sector. VGCL waged a campaign to recruit 1 million new members by 2007 and
asked provincial and industrial unions to register for their target of new recruits. The number of
new members now is over 700,000 according to recent reports by VGCL. It seems the campaign
has been successful; however, a vast majority of recent strikes occurred in unionized enterprises.
Apparently, the quality of unions is not necessarily commensurate with the size of union
membership.
The lack of coordination between enterprise unions and the provincial and national VGCL
has distanced the VGCL from its rank-and-file members. As can be seen through VGCL’s
reactions during the recent strikes, even though the VGCL central has been vocally voicing for
their members’ interests, what they are lobbying for is not necessarily what their members need
most. Without the trust of workers, the union may face even more difficulties in working with
employers. As found out in a recent interview by VCCI with Taiwanese and Korean companies
suffering from Tet strikes, the employers now work directly with rank-and-file workers to catch
up with their needs and complaints (in order to prevent further strikes) rather than relying on the
ineffective official union system.
From a more optimistic viewpoint, the recent wave of strikes was a shock for the VGCL
to accelerate their internal reforms. The on-going policy discussion within the VGCL system
reveals signals of a new trend of the union to stand more on the side of their members at the
workplace. This, to many extents, reflects changes in the mindset of the VGCL that to retain the
9
meaning for their existence, the first priority of the union should be to protect their members. As
the first step in this effort, the VGCL is considering a proposal to build up teams of professional
union negotiators at provincial level who are capable of supporting their local colleagues in
bargaining against employers for better pay and working conditions for workers.
3. VGCL policy directives for its provincial and industrial organisations
VGCL Central
Central
Industrial
Unions
Industrial
-level
General
Corporatio
n Unions
Local
Union
s
Local
Union
s
Provincial
Unions
Provincia
l-level
General
Corporati
on Unions
Local
Industr
ial
Unions
Local
Local
Union
Union
s
s
VGCL Organisation Chart
Distric
tal
Unions
Local
Union
s
EPZ
Union
s
Local
Union
s
As can be seen in the above chart, the structure of VGCL at local level is complicated.
Under VGCL central, the provincial union and central industrial union have the same position as
each bases on their local branches. In each province, the provincial VGCL works closely with the
local authority and gives directions to provincial-level general corporation unions (large SOEs’
unions), the local industrial unions (unions of local industries), and districtal unions. However, if
there are industrial and processing zones (EPZs) in the province, the EPZ union rather than the
provincial VGCL will be in charge of union activities in the zones. The border line between
provincial VGCLs and EPZ unions has been well-respected so far. Once a strike occurred in an
EPZ, the EPZ union will visit the strike-affected enterprise to settle the conflict first. Only when
they fail and ask for support, can the provincial VGCL officers come down and help.
The industrial unions, on the other hand, have their own structure with central industrial
unions and corporations’ unions. However, the local industrial unions report to the provincial
unions rather than the central industrial ones. Each industrial union is attached to a line ministry
(Ministry of Health, Ministry of Education, Ministry of Industry etc.). Almost all members of
industrial unions are the remaining SOEs.
By June 2005, VGCL had 5.2 million members affiliated to 64 provincial unions and 19
central industrial unions. There are 82,000 enterprise unions with 7,000 full-time union officers
and 300,000 part-time ones. The average level of unionisation in all sectors is 12%.
10
When the VGCL central wants to consult local branches on a bill or a government policy,
they can opt among the following choices or in case of special importance, combine all these
methods:
(i)
VGCL Board of Chairmen issue a directive to all VGCL local branches, asking
them to gather opinions from all members in their localities and report back to the
central;
(ii)
VGCL central send experts to provinces and enterprises to organize consultation
meetings;
(iii) VGCL provincial/industrial and central can gather their members’ comments
through online forum (Laodong online, the Labourer online) or the press.
With regards to dispute prevention and strike settlement, the hottest issue at the moment,
the VGCL central has sent a number of guidelines to provincial, EPZ and industrial branches.
The VGCL central suggested measures to prevent strikes (such as to have regular talks with the
workers to find out their needs, negotiate CBAs with employers, provide labour law education for
workers). Once strikes happened, the local unions are encouraged to actively cooperate with the
local authorities to set up ad hoc organizations (such as strike task forces) to settle disputes.
Regarding other issues such as occupational safety and health, social insurance, and
cooperating with the labour administration in inspecting of labour law compliance, the VGCL
central has issued different resolutions on coordination among various levels of the union. The
Resolution No. 5B issued in July 2005 on OSH, for example, requires provincial and enterprise
unions to make plans for improving OSH in their areas/workplace and report to the VGCL central
annually. The local unions are also asked to provide training for their members and other workers
in OSH. The provincial unions have to set up a permanent unit on OSH to cooperate with the
authority in inspecting OSH situation in local companies and organize trainings when needed.
However, as also admitted in recent reports by VGCL central, effective implementation of these
resolutions is only observed in SOEs where the union is considered a part of management. In the
non-public sector, unions rarely initiate proposals to improve pay and working conditions,
particularly when many union leaders are HR managers.
As observed by researchers, the implementation of VGCL policy directives stops at the
provincial level. They can be carried out in the SOEs and among branches of industrial unions
but yield little influence on unions in non-public enterprises. Possible reasons are: (i) employers
in these sectors do not welcome union activities, particularly control from higher-level unions;
thus, they do not facilitate the compliance of enterprise unions with these directives and (ii)
workers and even union leaders in these companies may have a different attitude toward union
activities and directives from higher-level unions from that in SOEs.
4. Trade union initiatives and experiments at provincial and local levels
As explained earlier, improving recruitment is one of the top priorities in VGCL’s fiveyear plan. With the launch of the “1-million-new-recruits campaign” focusing on the non-public
sector, each provincial and district units of VGCL have to find their own ways to increase
membership. Some experiences have been highlighted in VGCL’s newspapers as best practices.
In Ha Tay province, the unionists were obstructed by the employers who only allowed
them to talk to workers for 1 hour during lunch. Undiscouraged, they started talking to workers to
find out their specific needs from the union: wage policy, meals and accommodation, social
insurance and benefits etc. The union officers then organized several meetings with groups of
workers in which they discussed issues of concern and what the union can do for workers.
11
Thanks to this creative and practical approach, Ha Tay VGCL recruited as many as 5,000 new
members in 2005 (Laodong Daily, 15 December 2005).
This example shows a good sign of a significant change in the way unions approach their
potential members. Before, unions did not have to persuade workers to join the union but workers
automatically become union members as they are employed by SOEs. Now, the younger
generation of workers in the non-public sector who are more practical and materialistic in their
attitude towards the union would refuse to join the union if they see no real benefits in being a
member of the organisation. Lectures on the glorious history of VGCL which have been used by
union officers for decades appear to be irrelevant for these workers. Therefore, the new approach
described above is increasingly regarded by VGCL officers in general as a good practicethat
should be replicated nation-wide.
The VGCL central is also working with the ILO, DANIDA and the Swedish Embassy in
several projects12 to provide local and provincial union leaders with modern, practical skills
including negotiation and mediation skills, collective bargaining, marketing union’s roles and
benefits to employers and workers. Within the framework of the ILO/Vietnam Industrial
Relations Project, a training manual is being developed and will be published by mid-2006. This
manual is expected to help change the old mindset of unionists who are used to lecturing on
labour law, VGCL charter and history rather than persuading workers in more practical ways to
join the organization.
Upon perception that enterprise unions are too weak to represent and lead workers in
negotiations with employers13, VGCL is proposing to include in the next Amendment of the
Labour Code that the provincial VGCL branches should be allowed to support enterprise unions
in negotiating CBAs with employers and to organize industrial actions (see Annex 2). This also
means that the provincial VGCLs need to train their own professional negotiators and mediators
if they are to support enterprise unions. This initiative has received support from many experts
who believe that it would be a practical, meaningful way for VGCL to improve pay and working
conditions of workers in the private sector by negotiating genuine CBAs with employers instead
of lobbying the government to raise MWs. This proposal, however, is still under discussion and
negotiation among VGCL and other IR actors, particularly the MOLISA.
However, in support of this initiative, the next phase of the ILO/Vietnam Industrial
Relations Project (to be funded by the Norwegian Embassy) will kick-start and sponsor a national
campaign on collective bargaining which certainly base on the cooperation of VGCL at all levels.
The ambition of the project would be to develop some good models of real collective bargaining
and CBAs then replicate the best practices through the national union system.
It appears quite obvious for outsiders that most wildcat strikes in Vietnam were wellorganized without any involvement from the local unions. According to interviews conducted
during the author’s mission to HCMC, most of them were lead by rank-and-file workers rather
than the white-collar ones. In many cases, the organizers of some strikes prepared well-structured
leaflets calling for workers to walk out and distributed them around a week before the strike
occurred. Sometimes, workers from several enterprises walked out at the same time and for the
same reasons. These workers’ leaders build their basis on groups of workers from the same
provinces or those living in the same dormitories. They are also well-protected by their followers
since managers and government officials can rarely find out from strikers who are their real
With ILO: ILO/Vietnam Industrial Project, ILO Bangkok Project on Training
for Unionists; With DANIDA and Swedish Embassy: Projects on Capacity building
for Unionists.
13 VGCL officers are complaining that enterprise union leaders are only part-time unionists who are changed every
3 years due to elections. Also, they are paid by employers so most of them are unwilling to stand against employers
to protect union members. They got little help from provincial VGCL.
12
12
leaders. These examples evidenced the fact that there is a strong solidarity and good sense of
organization among the rank-and-file workers in Vietnam. However, these de facto workers’
leaders, sometimes called ‘black union leaders’ in contrast to ‘red union leaders’ (the official
union leaders), are considered by local unions, employers and the authorities to be “bad
elements” who incite good workers for personal reasons (retaliation against the management, for
instance). These black leaders, consequently, have not been included in the enterprise union
executive boards or recognized or consulted in any union matters after strikes. Most of union
executive board members in enterprises now are management people (HR staff) or office
workers. Rank-and-file workers are rarely elected to be union leaders because, as explained by
most of our interviewees who are government officials and higher-level unionists, they do not
have good education and their position in the companies is often too modest to represent workers
in negotiations with employers. It appears that a stereotype of who should be a union leader has
prevented the union to incorporate these real workers’ leaders into their organization.
13
Conclusion and Assessment
The dual mandates of VGCL as a semi-government agency and workers’ representative
organization, if unchanged, will continue to be an obstacle to the union in protecting their
members’ rights and interests. As the confidence of workers in them fades away, even their
mandate of upholding labour legislation will be badly affected. Yet, in the mid-term, there are
still prospects for the trade union to engage in a meaningful way with the problems of low pay
and poor working conditions confronting their members.
First, the links between VGCL higher-level and their rank-and-file members must be
strengthened. As observed by researchers, while there is little disparity in terms of
communication and understanding between the provincial and central level of VGCL, the
distance between the provincial union and their local members is huge. To bridge this gap, the
provincial/EPZ unions can provide more frequent support to enterprise unions through training
and assisting with negotiation with employers. In other words, in addition to setting up local
unions in newly-established enterprises, the provincial VGCLs need to maintain regular and
practical contacts with these unions to ensure they receive support when needed. Also, as reality
shows, education of labour law is neither the only subject for union training nor the most useful
knowledge to provide for local union officers and workers. Strikers know exactly how many days
they should go on strike without being dismissed by employers or how many hours of overtime
allowed by the law. Therefore, union training should focus on other issues such as how to
negotiate CBAs with employers, how to develop regular communication between workers and
unions, between unions and employers etc.
At the national level, the VGCL should initiate a campaign to promote real collective
bargaining practice, particularly in the non-public sector. To carry out this campaign, a number of
professional mediators and negotiators must be trained to back-up local unions in their
negotiations with employers.
The approach to election should be changed as well. The stereotype of who should be a
union leader (good education, management position etc.) is producing local unionists who are
closer to the management than workers. As wildcat strikes so far discerned, there are real leaders
among rank and file workers who do not have good education and hold no management position
but they have the most important qualities of union leaders: they stand on the side of workers and
they have workers’ trust. The existing election rules of VGCL appear to be democratic. It is the
mentioned stereotype that is preventing rank and file workers to be incorporated in the formal
union system. Whether this can be changed depends largely on how VGCL sees its roles now and
in the future: as a part of the management or a real protector of workers.
As analyzed in part 4, we have observed some sparkle of change in the recruitment
strategy of the union. The more proactive union officers have explored more practical, nontraditional ways to approach potential union members. However, this initiative has not been
adopted on a larger scale. The VGCL, we believe, should provide recruitment skill training for
their officers at provincial/EPZ level in parallel with replicating the good practices on a wider
range.
The current debates over strikes and Labour Code Revision evidence the legalistic
approach of the VGCL (and the government) at provincial and national level in figuring out
solutions to their difficulties. To be more exact, they seem to turn to the government for more
regulations and sanctions to solve any problem. Nonetheless, experiences in other countries prove
that an overdose of intervention by the state does not necessarily benefit the long-term
development of unions as workers will look to the government insteead of the union for support
and protection. Further intervention by the government will increase two parties’ reliance on the
state rather than providing initiatives for them to negotiate to solve their own problems. In the
14
long run, this approach will reduce the flexibility of enterprises and the economy in coping with
market changes, thus adversely affecting the competitiveness of the country. Therefore, to
improve pay and working conditions for workers, the union should negotiate first with employers
and their organizations. A recent initiative of VGCL and VCCI to hold annual meetings14
between their top leaders seems to be a step on the right track. Hopefully, similar initiatives will
be carried out at local level as well.
The meeting in 2004 focused on cooperation to improve unionisation in the
non-public sector. The next meeting is expected to cover disputes and dispute
settlement procedures.
14
15
ANNEX 1
BRIEFING ON THE TET FLURRY OF STRIKES
Is Minimum Wage the Cause?
How strikes happened?
Freetrend Indus
On December 28th 2005, the first and the biggest strike in a series of wild-cat strikes in the South
exploded in Freetrend Indus, a Taiwanese-owned footwear company in Linh Trung Processing
zone, Thu Duc district, HCMC. 18,000 workers walked out and the reason they claimed was that
wage increase was too low and unequal between new workers and experienced workers.
According to Lao Dong Daily (the Vietnamese Union’s official newspaper), a week before the
strike, the union leaders of the company requested that the Taiwanese management raise the
salary for workers. The Taiwanese managers agreed to raise the salary for new workers from
626,000 VND (equal to the current FDI minimum wage) to 790,000 VND but not to wage
increases for over 800 core workers (team leaders and higher-ranking workers). At the same time,
they cut a 60,000VND/person/month allowance. A few days before the strike, hundreds of
leaflets prepared by unknown workers were distributed all over the company. The leaflet
explained that by raising the salary by 160,000 VND and cutting 60,000 VND of allowance, the
real salary was pushed up by merely 100,000 VND while the inflation rate is much higher. The
authors of the leaflet called for all workers to go on strike.
Confronting the strikers, the Taiwanese managers attempted to shift the blame to the government
by saying that “MOLISA is to be blamed for being too slow in raising FDI minimum wage rather
than us. We have done what we can by raising the minimum wage (from 626,000VND to
790,000 VND) even before any official governmental decision was made”.
HEPZA (HCM Economic Processing Zone Administration) union officers came in time to firefight the strike by mediating between workers and the management. They asked the managers to
maintain the 60,000VND allowance, raise salaries by for all workers by 5% and pay the strikers
for the one working day lost. Taiwanese managers eventually agreed to all these demands.
During the negotiations, some male workers broke furniture, burnt paper, and threw some
materials away. The strike ended on late December 28th.
.. and the contagion
In the early morning of December 29, 2005, encouraged by the victory of Freetrend strikers,
4,000 workers in the Hong Kong-owned Kollan company and 1,000 workers in Korean Hugo
company (both base in Linh Trung Processing zone) followed suit for the same reason. Kollan
managers agreed to raise the salary by 80,000 VND across the board, which is lower than
workers’ expectation. The strike was not be resolved. The company is still temporarily closed.
After Kollan and Hugo, 12,000 workers in Taiwanese Latek, Korean Danu Vina, Taiwanese
Quint-Major (Linh Trung Processing zone), and Taiwanese Chutex (Binh Duong province) also
went on strikes. Most of these workers, particularly those from Kollan and Chutex, demanded a
wage increase of 30% to 36%.
The VGCL’s Response to the Recent Spate of Strikes
16
Like all previous strikes in Vietnam, the VGCL has not been consulted nor is it leading these
actions.
But this time, perhaps because of the scale and publicity surrounding these strikes, VGCL at the
provincial and national level has been quite vocal on television and newspapers in demanding an
increase in the minimum wage. Mai Duc Chinh, Vice Chairman of VGCL HCMC in an interview
with Lao Dong Daily on 4 January 2006 said (literally translated): “Recently 5 strikes have
occurred in 6 companies in HCMC and Binh Duong, mostly because workers demanded the
employers to raise the minimum wage… The HCMC VGCL together with DOLISA, and HEPZA
explained to workers that the minimum wage must be adjusted by the government. VGCL has
already proposed to the Government that it raise the minimum wage starting 1 January 2006”. Cu
Thi Hau, chairwoman of VGCL, echoed this viewpoint in an interview on the same day. She
emphasized that the demand of workers to raise the minimum wage is legitimate and VGCL has
made more than one proposal to adjust the FDI minimum wage to the Prime Minister and
MOLISA. VGCL predicted that strikes will continue and spread more widely if the minimum
wage is not adjusted soon. According to sources from VGCL, VGCL is requesting for 40%
increase of the FDI minimum wage as of 1 January 2006.
And the Government
HCMC People’s Committee held a meeting with all strike-hit companies on January 4th and
relevant stakeholders to discuss solutions. On January 5th, MOLISA’s Pham Minh Huan, Director
of the Wage and Salary Department, in an interview with VnExpress stated that the nature of the
current conflict is not about where the government has set the minimum wage, but about the
actual salary that companies are paying workers. He emphasized that it is the responsibility of
the trade union to negotiate with employers about wage increases and that the Government will
facilitate (if necessary) and respect their agreement as long as nothing illegal is negotiated.
Regarding the plan to adjust the minimum wage, Huan explained that there are currently two
minimum wages in Vietnam: One for foreign invested companies and one for public and private
entities including government officials, pensioners, veterans and their dependents, and all
government-support recipients. The government has the sensitive task of improving a welcoming
investment environment while trying to gradually merge these two minimum wages (the national
minimum wage15 and the FDI MW) into one by 2010 in order to eliminate discrimination against
foreign investors in accordance with the WTO rules. Therefore, the FDI minimum wage will be
increased more slowly than the national minimum wage. When asked about his suggestions to
end strikes, Huan informed that probably a government decree will be issued next week regarding
minimum wage adjustment. But still, he insisted that in the long run, strikes can only be
prevented if employers improve the working conditions for workers and reconstruct their wage
tables.
According to some experts, it takes time and more effort to get this message through. Internal
sources told the author that the Prime Minister remains quite cool about whether the MW will be
raised and by how much may be because he understands that this concession may lead to
misunderstanding of the responsibility and the roles of each stakeholder and possible abuses of
the power of workers’ strikes in the future as well as the tremendous burden that the state budget
has to shoulder in the long run16.
15
The current national minimum wage is 350,000 VND (or over $20)
17
Analysis
1. These strikes are actually more about actual wage increases rather than a raise in the
minimum wage. Because workers (and the union) have not yet been able to negotiate with
the employers effectively about their wages in individual labour contracts or collective
agreements, many employers, especially the Taiwanese and Korean, are paying lowskilled workers the minimum-wage-level salary (about 600,000 VND17). Given the
extremely high turnover rate (sometimes as high as 50%) and skill level of workers in
such labour-intensive industries as textile and footwear, a huge number of workers are
receiving this minimum-wage-level salary.
2. The case of Freetrend Industries is typical for foreign invested companies where,
employers have been able to keep wages low by capitalizing on the confusion in the
thinking of both workers and the local union that the minimum wage (which is set by the
government) sets the standard for what a company should pay its workers.
3. That the union and the public are blaming at the government and MOLISA for their role
in causing the strikes by not raising the MW soon enough – shows their own confusion in
understanding the responsibility of union to negotiate directly to employers to raise wage
and improve working conditions. This reliance on government authorities to set wage
reflects an old socialist mentality of the centralised economy not the dynamics of the
market economy.
Further updates:
1. On 6 January 2006, the Prime Minister issued Decree 03 stipulating new FDI minimum
wages: VND 870,000 for Hanoi and HCMC, VND790,000 for suburbs of big cities, VND
710,000 for other areas. The Decree took effect on 1 February 2006.
2. Since 1 February 2006, however, a second wave of strikes started as non-FDI workers
walked out demanding for wage increase. In February alone, there were approx. 20
strikes, mostly in the South. But there were 2 strikes in private companies in Hai Phong
and Nghe Tinh showing the fact that the strike contagion is spreading to the North.
3. The VGCL is well aware of the possibility of the 2nd wave of strikes as one of the union
officer said in a recent tripartite discussion: “If the government do not raise the national
MW to the level of FDI MW, more strikes will happen”. Apart from calling for the
government to raise MW in the non-FDI sector, the VGCL is urging their provincial
officers to work closely with the local authority, especially to take part in the de facto
strike task forces.
Prepared by Do Quynh Chi
Program/Research Assistant
ILO/Vietnam Industrial Relations Project
January 2006
The FDI minimum wage is $45 which is to paid in Vietnamese Dong at the
fixed exchange rate of $1 = 13,000 VND according to a government decision in
2003. Although the exchange rate has since changed to $1= 16,000 VND, the
minimum wage rate is still pegged to the 2003 exchange rate due to government
regulations.
17
18
ANNEX 2
Following is the comment of VGCL on the first draft of Chapter 14 Labour Code expressed in
an official note from Mr. Nguyen Hoa Binh, Vice Chairman of VGCL, member of the
Tripartite Drafting Committee of the Labour Code Revision to MOLISA on 9th January 2006.
1. Definition of labour disputes (Art. 157): Labour disputes not only emerge from the
labour-management relations but also relations directly related to industrial relations
(vocational training, labour export). Thus, this concept should be extended to incorporate
these related disputes as well.
2. Labour dispute settlement procedures (Art. 162, 163, 164):
 Mediation authority: mediation should be conducted by either the enterprise conciliation
council or district/provincial mediators. Disputants have the right to choose mediators. A list
of mediators including labour administrators, unionists, and representatives of employers’
organizations and individuals with good knowledge of labour law will be issued by the labour
administration. Qualifications and procedures for selecting and appointing mediators will be
stipulated by MOLISA or by the three IR actors.
 Voluntary or obligatory mediation? In cases of right-based collective disputes and
individual disputes, mediation should not be obligatory. Disputants can either opt for
mediation or skip this step to bring the case to the Court. Mediation is only obligatory in
interest-based collective disputes.
 Mediation outcome: In case one of the two parties does not comply with the successful
mediation result, the other should have the right to ask for the Court’s recognition of the
mediation result. The compliance with the result, then, can be enforced by the State.
3. Individual dispute settlement procedures (Art. 165 – 167)
 After negotiation between the disputants fails, they can request mediation support from the
enterprise conciliation council or mediator or bring the case to the Court.
 In case the disputants request for mediation but mediation fails, they can bring the case to
the Court.
4. Collective dispute settlement procedures (Art. 168 – 171a)
 There should be two sections: one on right-based disputes and the other on interest-based
disputes.
 Suggestions on right-based dispute settlement procedures:
Step 1: After bipartite negotiation fails, the workers can choose among several options: (i)
request for support from the enterprise conciliation council or mediators; (ii) bring the case to
the Court; or (iii) strike (or collective work stoppage if strike is not allowed in this case). The
employers, in turn, can choose: (i) to request for support from the enterprise conciliation
council or mediators; or (ii) to bring the case to the Court.
Step 2: In case the workers choose to go on strike, before and during the strike, disputants
can request for Court’s decision over the lawfulness of the strike and settlement of the
dispute. In case the law does not allow strike in this situation but work stoppage only, the
disputants should have the right to request the labour administration or the Court to solve the
dispute.
 Suggestions on interest-based dispute settlement procedures:
Step 1: If negotiation fails, the dispute will be mediated by either the conciliation council
or mediator.
19
Step 2: The workers can choose between two options: (i) request for provincial
arbitrator’s decision or (ii) go on strike. The employer, on the other hand, can ask for
provincial arbitrator’s decision. If both parties agree to ask for the arbitrator’s support, the
decision by the arbitrator will be the final, binding one for both sides. If only one party opts
for arbitration, the decision is only a suggestive solution. The request from employers for
arbitration will not limit the right to go on strike of workers.
Step 3: In case workers decide to go on strike, during and after the strike, disputants can
request for the Court’s decision over the lawfulness of the strike. The settlement of the
dispute will be conducted through negotiation and mediation between the two parties.
 Regarding disputes involving both right and interest: the procedures should be similar to that
for settling right-based disputes.
5. Other regulations on strike and strike resolution
 Advanced notice time for different types of disputes should not be the same. For right-based
dispute, the strike or workstoppage should be noticed 1 day before.
 The Law should not provide for non-strike enterprises but for non-strike areas or occupations.
Also, the right of strike should not be restricted for all public srevice sector but only those areas
that directly impact national defence and security, safety and life of a certain group of the
population.
 More regulations on:
+ Appeal procedures after the Court’s decision over the dispute
+ The mandate of the Court in dealing with emergencies during strike resolution
+ The mandate of the local labour administration and union in supporting the two parties
in negotiation, mediation after strike or work stoppage.
6. In right-based disputes, workers should be given either right of strike or workstoppage.
7. Not only the enterprise union but also the higher-level union can organise and lead strikes.
8. Post strike resolution: more detailed regulations on payment for workers and
compensation by the local union for the damages caused during strikes.
20
ANNEX 3
Joint Mission Report
Dates: 18-20 January 2006
Participants:
Interviews on strike issues:
- Mr. An Kyung Duk, Labour Affairs, Korean Consulate Office
- Mr. Nguyen Van Khai, VGCL
- Mr. Tran Hong Son, VGCL
- Mr. Nguyen Van Doi, Director, VGCL Law Consultancy Centre
- Ms. Doan Thu Ha, Labour Management Dept., HCMC EPZ/IZ Authority (HEPZA)
- Ms. Nguyen Thi Thanh Mai, Chief of Foreign Labour Management, DOLISA
- Mr. Vo Tan Thanh, Director, VCCI HCMC
- Ms. Nguyen Hong Ha, BEA, VCCI HCMC
Background:
Recently strikes involving thousands of workers have occurred in enterprises, mostly FIEs in
IZs and EPZs in HCMC and Binh Duong province. The strikes were said to be over wage
and minimum wage issues.
Summary/Accomplishments
STRIKE RESEARCH
According to information from different sources, the series of strikes started on 28 December
2005 resulted from issues such as wage increase, minimum wage which is used to pay all
workers regardless of their seniority or skills, too much overtime work, no payment of social
insurance, no plan for Tet bonus, poor quality of meals and other poor working conditions.
Certain tension was created by some misleading and pro-workers articles.
During the strikes, the enterprise unions were very weak and could not deal with the situation
and hid. Municipal VGCL could only involve in settling strikes in EPZs/IZs when requested
by Union of HEPZA or when requested by the People’s Committee. HEPZA lacked of
human resource and could not enforce the law. VCCI did not have the right to involve until
officially permitted by MOLISA when strikes have happened already. DOLISA had to come
and settle the strikes in the usual way with other authorities of the joint task force.
Leaflets calling for workers to go on strike were dispersed in the middle of the strikes series.
18 individuals were found inciting workers to go on strike.
The series of strikes stopped after the issuance of Decree 03 setting out new minimum wage
for foreign-invested enterprises (FIEs).
Information from Korean Consulate Office
There have been 15 strikes in Linh Trung IZ and 10 strikes in Song Than IZ. Some Korean
companies have contacted Korea Consulate Office to seek for help.
21
The strikes have occurred because of, among other reasons, an understanding among the
workers that minimum wage would be increased from 1 January 2006. The understanding
was generated from the fact that in September 2005 MOLISA prepared some options to raise
minimum wage of FIEs, pending Government approval. A consultation meeting was held in
HCMC by VCCI with DOLISA speaker to gather opinions of enterprises on the options, and
MOLISA left the impression that it was favoring option 1 to raise minimum wage effective
from 1 January 2006. Though it was made clear that this was just a proposal to the
Government, that would not yet officially decided, this led to an expectation and rumor that
the minimum wage would be raised as of 1 January 2006.
After the meeting no communication or announcement was made by relevant authorities.
Near the end of December 2005, being queried by Korean companies, the Korean Consulate
Office contacted DOLISA for a decision on which option and timeline are going to be taken –
DOLISA did not know. The enterprises did not know what they should do.
On 27 December 2005, there was an article on the English version of the Saigon Times
stating that “according to a report to the Prime Minister” the minimum wage was to be raised
in April [instead of January] 2006.
On 28 December 2005 the strikes started. Some company chose to voluntarily raise their
lowest wage level from January 2006 because they wanted to avoid or stop strikes. But
workers in other companies who did not raise their wage and wanted to wait for the
Government decision became frustrated. By the end almost companies were forced by the
strikes to raise their wage.
During the strikes, the Union was unable to lead or stop strikes. The HCMC People’s
Committee Vice Chairman commented that Union did not prove to be representative of the
workers during these strikes.
According the Korean Consulate’s labour officer, Korean companies should follow what their
neighbor companies do [raise wage] in this case to calm the workers down because there is a
serious shortage of laborers in the area and it is critical issue especially for garment and shoe
making companies. One Korean manager revealed the information that they were consulted
that the strikes were illegal and the company should hold and wait for a few days for official
settlement rather than raising wage. However there was no coordination among companies in
preventing wage raises.
At present, foreign business associations of Korea, Taiwan, Hong Kong, Singapore… are
drafting a joint letter of complaint to the Prime Minister.
From 24-26 January DOLISA HCMC will organize seminars for companies to introduce and
provide guidance on the new Decree 03 on minimum wage.
Another decision/regulation needs to be issued to clearly define “trained workers” who are
entitled to 7% higher wage than minimum wage.
22
Information from the VGCL
Good news: none of 10 enterprises of the project had a strike during this period.
Reasons of the strikes are wages, working conditions, working hours and rest time, quality of
meals. A list of recent strikes with more details is attached.
Union officials were not given good conditions to implement their union tasks.
Many companies did not support Unions or their activities:
- Companies such as Latex (footwear) did not provide free time of three days per month for
Union officials to carry out union jobs.
- There is no suggestion box, no communication channel to communicate with workers,
Union official can hardly find time to communicate with members out of working hours.
What need to be done to improve the situation and to prevent strikes and disputes?
A joint effort needs to be mobilized from all relevant authorities, not only VGCL’s effort.
Given the fact that the Prime Minister can not always raise wage, VGCL agrees that the
minimum wage provided by the Government is not necessary the same with the lowest wage
of FIEs, let alone that in many cases the “lowest wage” is actually the wage for majority of
workers. In the State sector, minimum wage is multiplied by some coefficient in order to
calculate actual wages for workers. In the foreign-invested sector, no such coefficient is used
to calculate wage, and the wage payable to the workers is the wage specified in individual
labour contracts. So if the company uses minimum wage as their lowest wage and pay
minimum wage to almost workers, the Union does not know how to cope with the situation
because it is still considered legal by law.
Ideally it’s the task of the Union to negotiate for higher wages for workers. However the
Union at the enterprise level is very weak. There are also Industry Unions which relate to
central VGCL, not provincial VGCL. Union Committees in EPZs/IZs are under the
management of local government rather than provincial VGCL. Therefore provincial VGCL
do not have information or participate in settling disputes in EPZs/IZs if it is not requested by
Union Committee of the EPZs/IZs. Officially provincial VGCL does not have an official
role in settling disputes in EPZs/IZs, it is HEPZA’s job. Provincial VGCL can only be
involved if requested.
For recent strikes, enterprises in EPZs/IZs reported the strikes to HEPZA. HEPZA, being
unable to settle the disputes independently, then reported and requested help from provincial
VGCL. VGCL then was also requested by the HCMC People’s Committee to help settle the
strikes in EPZs/IZs. VGCL came to the company, talked on the loudspeakers and invited
representatives of the strikers to meet with VGCL and the dispute resolution team.
There are 5-6 Union officials of HEPZA, it is an insufficient number to deal with issues of
appx. 300 companies located in EPZs/IZs.
It was suggested by the Project that collective bargaining and real CBAs should be
promulgated and through effective collective bargaining the Union can prove itself as
representative of workers. The capacity of enterprise Unions can be improved through
“coaching” practice provided by VGCL at upper level. This practice is silent in the law
23
which also means that the law does not prohibit. VGCL agreed that this is a good idea but
then the problem came back to the insufficient human resource to cover current jobs.
In general, the VGCL official who we interviewed understood the difference between
minimum wage set by the Government and lowest wage of a company and that companies
can pay higher wages to workers without relying on the minimum wage of the Government.
But enterprise union is weak and is not supported by enterprise. And Union does not know
how to deal with the situation when companies rely on minimum wage of the Government.
Information from Ho Chi Minh City EPZs/IZs Authority (HEPZA)
The series of strikes can be compared to an epidemic because of their contagious
characteristic.
The main reason was wages. There were other reasons such a quality of the meals, overtime
work, healthcare for workers…but wages were the final “spark” for the strikes to occur.
There was wrong-doing by the employers. All the striking companies kept wages at the bare
minimum level.
There was no sign of planning or coordination among companies. Workers stood outside the
gate of the company and persuaded other workers not to come to work. HEPZA received
notification of the strikes from employers, security team of the EPZ/IZ and workers calling
and asking for help. Leaflets were dispersed during strikes, handwriting was found on the
toilet wall persuading workers to contribute to make pressure on the companies.
The difference of these strikes as compared to previous strikes was that the strikes this time
became more serious because of some articles announcing misleading information on
minimum wage increase which raised the expectation of the workers, especially at this critical
time near Tet. However HEPZA did not think of questioning the newspapers about the
inaccuracy of published information, they thought that the newspapers could claim their
freedom of press.
Many companies have Unions and CBAs but the Unions are weak.
Recommendations:
- Because wages are the main reason, employers need to have reasonable salary scale and
clear schedule for salary increase.
- The Union needs to be more active, especially in case where the company has poor salary,
by being trained in union practicing skills, dispute settlement skills…to deal with disputes
and strikes situations.
- Because of poor awareness and understanding of the laws and regulations by the workers,
the workers need to be trained on labour law and regulations. The law and regulations
should be interpreted and explained in an easy way to understand for the workers. If the
workers have certain understanding of the law, they will not be so easily incited.
- Newspapers also need some guidance to be more careful with the information they
publish.
- The current procedure for strike is not feasible. A new legal regulation to deal with
strikes more efficiently is needed. Though the workers are going on illegal strikes
causing damages to the companies but they can still be benefited from those strikes. The
24
law and regulations should also be clear in identifying responsibilities of those involved in
strikes. If the employers violate the laws, the employers will be punished. Similarly if
the workers violate the laws, the workers will also be disciplined. There is Decree 113 on
disciplines for various types of violation including violation of the Labour Law.
Assistance needed:
- Helping foreign investors to understand Vietnamese culture. Many foreign
investors/managers imposed their own culture on Vietnamese workers. Many disputes
were emotional.
- Educating workers on the laws and regulations. Because most workers have low level of
education, the laws and regulations should be interpreted in simplified wording.
- The project will send second publication of Labour Law poster to HEPZA to distribute to
companies.
Information from DOLISA
Minimum wage and extra allowances
Previously companies normally paid the minimum wage and some extra allowances to
workers. Now the companies have to raise minimum wage in accordance with Decree 03 but
tend to cut extra allowances. A number of companies questioned whether they have the right
to cut the extra allowance. The answer is that the allowance is not stipulated in the law but if
it has been agreed in the CBA or individual labour contract then the company must continue
to pay until it can re-negotiate with the workers. In practice although many Taiwanese
companies did not put an allowance officially in writing, it can be considered as a past
practice in certain period of time and can be considered as an oral agreement – therefore it is
advisable that the company re-negotiate any change with workers.
Union
The Union is every weak in dealing with strikes and many enterprise union officials chose to
hide when strikes happened. The strike at Latex Company was only settled with the
involvement of a joint task force of DOLISA, VGCL, HEPZA. The enterprise union official
disappeared.
The Unions at both the enterprise level and upper level are weak and lack sufficient number
of staff. It is reflected in the reality that many CBAs are drafted by HR
manager/management, not by both parties. It is very important to build capacity of union to
organise and negotiate. HCMC People’s Committee has requested VGCL within the next 6
months to strengthen the capacity of union at enterprise, district level and union in EPZ/IZ.
Reasons of strikes
The strikes this time have similar timing and similar reasons of previous strikes. The
difference is the domino effect of the strikes, all strikes took place in 2 EPZs and there was
certain effect of misleading articles. There are many reasons of the strikes including poor
working conditions, too much overtime work, no payment of social insurance, no individual
labour contract, healthcare…and wage increase is just the final spark.
Articles
25
On 3 January, a few days after the first strike happened, an article on “Nguoi Lao Dong”
newspaper [of VGCL HCMC] had the title: “Minimum wage of FIEs is increased by 40% confirmed on 2 January by Madam Cu Thi Hau, Chairwoman of VGCL” and “Madam Cu Thi
Hau, Chairwoman of VGCL: The Government agreed to increase wage from 1 January
2006” while in the body text of the article it is stated that “On 1 January VGCL and MOLISA
has jointly sent a proposal to the Government for wage increase for workers of FIEs. The
proposed increase is 40% and it has been approved by the Government. An official document
will be issued soon and will take effect from 1 January 2006”.
There were also a number of articles on Lao Dong Newspaper reported on the strikes which
may have made the workers/strikers feel that they were supported by the press.
Between 3 January and 6 January, in the middle of the strike series, leaflets were dispersed to
encourage “all workers to go on strike at 7a.m. on 6 January” to request the company to
increase wage, recalculate piecework price…. and “Request for Tet holidays from 26
January!” [the last sentence was in handwriting, officially Tet holidays only start from 28
January]
On 6 January, Decree 03 was officially issued providing increased minimum wage for FIEs
effective from 1 February 2006. The strikes calmed down and stopped.
Delay and Ambiguity
In September 2005 MOLISA sent two options of wage increase and its timelines to the
Government. After that, 10 business associations in HCMC asked to postpone the effective
to April 2006. HCMC DOLISA was in favor of the option to raise minimum wage to
VND870,000 effective from April 2006 in support of the investors’ appeal for some
additional time to prepare for the increase, while VGCL was in favor of the option to raise
minimum wage effective from January 2006. Then the Government did not make clear
decision on which option to implement. The consultation meeting with companies in
September, the delay in decision making afterward, the articles, the lack of information of
minimum wage increase status for both employers and workers – all these factors have
caused ambiguous status and misunderstanding which led to strikes.
HEPZA
According to MOLISA, if officials of HEPZA had clearly informed workers about status of
minimum wage, some strike could have been avoided. Inspection of DOLISA in 2005 found
14 out of 16 enterprises in EPZ having very poor working conditions and violated the labour
law but HEPZA failed to enforce law on the companies. HEPZA was considered by
MOLISA to be too pro-company.
An observation was made by the Project CTA that HEPZA possibly has conflicting duties of
attracting foreign investors and enforcing laws at the same time.
Suggested solutions
- Increasing minimum wage is only a first step.
- Building ongoing good relationship between union and management to handle many other
problems and conditions such as overtime work, annual leave, quality of food, working
conditions, heat and hygiene environment, social insurance contribution, health
insurance… so workers can receive benefits thereon timely.
26
-
DOLISA has prepared a list of 16 Questions and Answers on the application of the new
minimum wage and related issues and the Q&As will be distributed to companies.
Similarly there should be a Labour law user’s guide in Q&As format to address practical
issues directly and in a way that is easy to understand for workers.
The project should continue to support Union and management to develop good
relationship themselves without too much involvement or settlement of the Government.
Information from VCCI
None of the striking companies are member of VCCI but some companies have close contact
with VCCI HCMC.
VCCI was only recognized and admitted recently to take part in the joint task force to settle
strikes and labour disputes in HCMC, and VCCI needs to be supported to strengthen this new
role. During the series of strikes, some companies contacted VCCI but VCCI did not have
the role or the right to settle the strikes. VCCI then had to make a request to MOLISA for
VCCI to take part in the settlement of the strikes and was only admitted after the strikes
happened. From now on, VCCI is officially a member of the joint task force.
Though not all the employers are complying with the laws, there are certain employers who
do not know why workers go on strike. The company pays average salary of VND1
million/month, gives them benefits, organizes social activities… but when strike happens the
employer had to suffer from damages and losses and no one protects the employers.
The problem lies in legislation system:
- the Labour Law and the legal system still have some loopholes for both employees and
employers, causing the employers to feel insecure and unfairly treated. There is no
mechanism to protect the employers.
- Law enforcement is poor.
- Lack of information sharing to both companies and workers.
In September 2005 a consultation meeting was held with companies and all companied
agreed with the plan to raise minimum wage but the question is implementing roadmap. The
government did not address the issue timely. There was long delay in decision making.
It was suggested by the project that companies do not necessary have to wait for the official
decision to increase wages for workers. They have the right to take the option to pay wages
higher than minimum wage – that is not prohibited by the Government or the law. This point
was agreed by VCCI.
The HCMC PC has strong statement that those who are found having incited workers to go
on illegal strikes may be charged as criminals.
The employers are satellites and they do not coordinate with each other and exchange
information. VCCI has organised two dialogues to consult the opinions of companies. VCCI
did raise the concern of companies about roadmap for increase of minimum wage but did the
Government listen? VCCI draws the lesson that it should follow up even when there is no
sign of response.
27
The network/link among employers is still weak. There are Amcham, Eurocham, AusCham
but they operate independently and have weak links with each other and with VCCI. VCCI
wants to develop and improve the network of all business associations and to represent all
employers better.
Date filed: 24 January 2006
28
ANNEX 4
Percentage of Strikes in Viet Nam by Enterprise Ownership
1995 to 2004
State-Owned
Enterprises
Private (Vietnamese)
Owned Enterprises
9% (75 Strikes)
27% (223 Strikes)
Foreign-Invested
Enterprises
64% (446 Strikes)
Number of Strikes in Viet Nam by Enterprise Ownership
1995 to 2005
Number of Strikes
100
80
State-Owned
Enterprises
60
Foreign-Invested
Enterprises
Private
(Vietnamese)
Owned
Enterprises
40
20
0
1995
1996
1997
1998
1999
2000
2001
2002
2003
2004 20/5/05
Year
According to ILO research findings, the following were
reasons given by workers for going on strike:
33%: Low wages or failure to pay a promised increase
25%: Failure to pay a promised bonus
25%: Excessive overtime hours
20%: Failure to pay for overtime hours worked
17%:
Workers complain that they have not received labour
contracts
13%: Failure to pay social insurance
29
ANNEX 5
REVISION OF CHAPTER 14 OF THE LABOUR CODE (2ND DRAFT)
Section I: General Regulations
Art. 157 is revised as follows:
“Article 157:
1. Labour Disputes are disputes over rights and interests, emerging from the industrial
relations between an individual worker or a group of workers and the employer.
2. Labour dispute is classified into individual dispute between an individual worker and the
employer and collective dispute between a group of workers and the employer.
Right-based collective labour dispute is a dispute over the violations of labour law
regulations, collective agreements or work regulations that have been registered to a
competent authority, or other legal rules by the employer as claimed by workers.
Interest-based collective labour dispute is a dispute emerged from negotiation between the
two parties over remuneration, bonus and other working conditions that are better than the
legal minimum standards.
3. A group of workers (actually if literally translated, it is ‘collective of workers’): include
workers in one enterprise or a part of the enterprise.
Art. 158 is revised as follows:
“Article 158:
Labour disputes should be resolved in the following principles:
1. Direct negotiation, self-determination by two disputants at the place of conflict.
2. Involvement of mediation, arbitration on the basis of respect for rights and interests of
each side, and respect for the common interest of the society and the law.
3. Transparency, objectiveness, timeliness, and lawfulness
4. Participation of the union and employer’s representative in the dispute resolution process.
Art. 159 is revised as follows:
“Article 159:
State authorities and competent agencies create favourable conditions for the negotiation,
mediation of the two parties to ensure the business stability and social order.
The competent agency in charge of labour dispute resolution shall get involved when a party
refuses to negotiate or both sides can not get to resolution despite negotiation and one of the
parties makes an official request for labour dispute resolution.
Art. 160 remains unchanged as follows:
“Article 160:
1. During labour dispute settlement process, disputants have the right to:
a) Participate in the settlement process directly or through a representative;
b) Withdraw their complaint or change the content of dispute;
c) Request for a change of the person directly in charge of resolving the dispute if they can
present legitimate reasons that the person is unable to ensure the objectiveness and
fairness in dealing with the case.
2. During labour dispute settlement process, disputants have the responsibility to;
a) Provide all documents, evidence as requested by the authority in charge of dispute
resolution;
30
b) Abide by agreements made, successful mediation record, binding decision of the authority
in charge of dispute resolution, or court decision.
Art. 161 remains unchanged as follows:
“Article 161:
The authority or organisation in charge of solving labour disputes, within its capacity, has the
right to request disputants and relevant individuals, organisations and agencies to provide
documents, evidence, appeal for investigation, invite witnesses and related parties to involve in
the process of dispute settlement.”
Art. 163 now becomes art. 162 and it is revised as follows:
“Article 162:
1. In unionised enterprises, local conciliation councils must be set up. Membership of the
conciliation council includes equal numbers of representatives of workers and employers.
The number of members is decided by both sides.
2. Each tenure of the conciliation council is 2 years. Each side will take turn to be the
Chairman and Secretary of the Council. The Conciliation Council follows the principles
of consensus and agreement.
3. The employer shall create necessary conditions for the operation of the Council.”
Art. 165 now becomes art. 163 and it is revised as follows:
“Art. 163:
Labour mediator helps mediate labour disputes in enterprises without conciliation councils or
disputes over apprenticeship contracts and training fee.”
Art 164. is revised as follows:
“The sequence of mediation of labour disputes shall be:
1. The local conciliation council or labour mediator conducts mediation in 3 working days as
from their reception of the request for mediation. Both sides or their representatives must
be present at mediation meetings.
2. The conciliation council or the mediator suggests solutions for both sides to consider. If
the two disputants agree to the suggested solution, a mediation record will be made with
signatures of both parties, Chairman and secretary of the Council or that of the labour
mediator. The mediation record is legal-binding. Within ten days after the conclusion of
the mediation record, two parties have the responsibility to comply with the record. After
ten days, if one party fails to abide by the agreement, the other party can request the local
enforcement agency to force the former to carry out the agreement.
3. If mediation fails or one of the disputants does not show up at the second request for
meeting without a good reason, the conciliation council or the labour mediator shall make
a record of the case. This record is sent to each disputant within 3 days.
Section II: Individual labour dispute resolution
Art. 162 becomes Art. 165 and remained unchanged as follows:
“Art. 165
Agencies in charge of solving individual labour disputes are:
1. Enterprise conciliation councils, or district labour mediators in the absence of
enterprise conciliation councils.
31
2. People’s Court”
Art. 165a is supplemented as follows:
“Art. 165a
1. The agencies in charge of solving individual labour disputes stated in clause 1 of Art. 165
shall mediate individual labour disputes in the process stipulated in Article 164 herein.
2. In case of unsuccessful mediation, any disputant shall have the right to request for the
settlement by the People’s Court. The minutes of unsuccessful mediation must be
included in the dossier submitted to the People’s Court.
3. If the enterprise conciliation council or district labour mediator does not mediate the
disputes within the period of time stipulated in Clause 1 of Art. 164, one of the disputing
parties has the right to request for settlement by the People’s Court.”
Art. 166 remains unchanged as follows:
“Art. 166
1. The People’s Court settles individual labour disputes that have been unsuccessfully settled
or mediated by enterprise conciliation council and labour mediator respectively or that
have not been settled by enterprise conciliation council and labour mediator within
stipulated period of time.
2. The following individual labour disputes can be settled by the People’s Court without
having to go through prior mediation:
a. disputes over disciplines in the form of dismissal or unilateral termination of
labour contracts
b. disputes over compensation and allowance upon termination of labour contracts
c. disputes between housemaid and her/his employer
d. disputes over social insurance as stipulated in Item (b), Clause 2, Art. 151 herein
dd. disputes over compensation relating to labour exporting agencies.
3. The labourers shall be exempted from court fees in cases where the claim is lodged to
claim wages, unemployment allowance, severance allowance, social insurance,
compensation for working accidents and occupational diseases, dismissal and illegal
termination of labour contracts.
4. During the settlement process, the People’s Court declares an individual labour contract
or a collective labour agreement partially or entirely null and void if it finds any
contradictions in the individual labour contract as compared to the collective labour
agreement and the law, or any contradictions in the collective labour agreement as
compared to the law.
5. The government shall provide regulations on solutions for the null and void individual
labour contracts and collective labour agreements as mentioned in Clause 3 Art. 29,
Clause 3 Art. 48 and Clause 4 of this Art.”
Art. 167 is revised as follows:
“Art. 167
Prescription for request for settlement of individual labour disputes is as follows:
1. One year since the occurrence of the incident in which disputing parties claim that their
rights and benefits are infringed for the type of disputes stipulated in Items (a), (b) and
(c), Clause 2, Art. 166.
2. One year since the request for settlement was lodged for the type of disputes stipulated in
Item (d) Clause 2 Art. 166.
32
3. Three years since the occurrence of the incident in which disputing parties claim that their
rights and benefits are infringed for the type of disputes stipulated in Item (dd) Clause 2
Art. 166.
4. Six months since the occurrence of the incident in which disputing parties claim that their
rights and benefits are infringed for other the types of disputes.”
Section III: Collective labour dispute resolution
Art. 168 is revised as follows:
“Article 168:
Agencies in charge of solving right-based collective labour disputes are:
1. Local conciliation council or district labour mediator in case of absence of conciliation
council;
2. People’s Court”
Art. 168a is added as follows:
“Article 168a:
Competent authorities responsible for solving interest-based collective labour disputes are:
1. Local conciliation council or district labour mediator in case of absence of conciliation
council;
2. Provincial labour arbitration council”
Art. 169 is revised as follows:
“Art. 169
1. The Provincial Arbitration Council shall comprise of full time and part-time officials
representing provincial labour authority, trade union, employers, lawyer association and
individuals having strong experience of labour relations in the province.
2. The number of the members of the Provincial Arbitration Council must be an odd number
and maximum 5 members and chaired by representative of provincial labour authority.
3. The Provincial Arbitration Council will have tenures of 3 years each.
4. Decision of the Provincial Arbitration Council is made by majority votes.
5. The provincial labour authority shall provide necessary conditions for the operation of the
Provincial Arbitration Council.”
Art. 170 is revised as follows:
“Article 170:
1. Relevant authorities implement mediation process for collective labour disputes in
accordance with Art. 164 herein.
2. In case of mediation effort failed, the local conciliation council or the labour mediator
makes a record with opinions of the disputants, the council or the mediator. For rightbased disputes, one side or both sides have the right to request for Court’s decision. For
interest-based disputes, one side or both sides have the right to request for the arbitration
council’s decision. The minutes of unsuccessful mediation shall be included in the
dossier submitted to the Arbitration Council or the Court.
3. After 3 days, if the conciliation council or the mediator fails to start mediation for the
disputants, one of the two parties have the right to request for the Court’s decision in case
of right-based disputes and to request for the provincial arbitration council’s decision in
case of interest-based disputes.
33
Art. 171 is revised as follows:
“Article 171:
1. The arbitration council has to conduct mediation and resolution of collective labour
dispute within 5 working days as from the date the request is received. At the arbitration
session, the two disputants or their representatives must be present. In special cases, the
arbitration council can invite the higher-level union and representative of competent
government agencies to the meeting.
2. The arbitration council suggests a solution to both sides. If the disputants agree with the
solution, a record of successful mediation will be made with signatures of two disputants,
Chairman of the arbitration council. The record is legal-binding, two parties have the
responsibility to comply with this agreement.
3. In case of unsuccessful mediation, the arbitration council makes decision on the dispute
and inform to the disputants. Within 15 days as from the date of decision, if two parties
have no objection, the decision automatically becomes legally effective”
“Article 171a:
The time limit for resolving a collective labour dispute is one year as from the date either party
claims that their rights or benefits are violated”.
Section IV: Strike and Strike Resolution
Art. 172 is revised as follows:
“Article 172:
Strike is temporary, voluntary and organised work stoppage by a group of workers in an
enterprise as an attempt to solve interest-based collective labour dispute in industrial relations”.
Art. 176 is changed to Art. 173 and revised as follows:
“Article 173:
A strike is considered illegal if conducted in the following cases:
1. A strike does not base on interest-based dispute;
2. A strike does not happen in an enterprise or the pre-noticed place and it is not organised by
workers in one enterprise;
3. A strike occurs when the dispute is being dealt with by the mediation or arbitration agencies;
4. The union does not consult workers before the strike;
5. A strike is not organised by the local union;
6. A strike happens in a non-strike sector as stipulated by the Government;
7. When a decision to delay or stop a strike has been made by the authority.
Art. 173a is added as follows:
“Art. 173a
Within the period of time provided for in Clause 3 Art. 171 herein for interest-based collective
labour disputes, if the workers are in disagreement with the decision of the Arbitration Council,
the workers have the right to request the Union Executive Committee to prepare steps for a strike,
to notify the employer, DOLISA, provincial VGCL and representative of provincial employers
organization.”
Art. 173 is changed to Art. 174 and revised as follows:
“Art. 174
34
None of the disputing parties shall unilaterally have opposing actions against the other parties
while the dispute is being settled by relevant authorities.”
Art. 174a is added as follows:
“Art. 174a
1. Agreement of the workers to go on strike shall be sought by the Union through secrete
vote or collection of signatures of the workers.
Enterprises having more than 500 workers or groups of more than 500 workers, the
agreement of the workers could be sought though representatives of the workers.
2. The vote or collection of signature of the workers shall be organised out of working
hours. If this activity is organised within working hours, it has to be agreed by the
employer and the employer must be given one day notice of this activity.
The employer shall, if requested, provide good conditions and suitable venue at the
enterprise for the Union to organise this activity.
3. The content needs to be consulted and agreed by the workers before going on strike
include:
a. The content listed in Clause 2 Art. 174b
b. Agreement or disagreement of the workers to go on strike
“Article 174b:
Procedure to wage a strike:
1. The standing committee of the union issues a written decision of strike with over 50% of
workers’ consensus. The decision must clearly state the starting date and place for the
strike and attach a letter of demands of the workers. The decision must also be signed by
Union Executive Committee members and stamped by the Union organization.
2. The content of the decision consists of:
a) The collective labour disputes that have gone through mediation and arbitration but
workers do not agree with the suggested solution;
b) The outcome of the vote over strike;
c) Starting time of strike (date, time)
d) Place of strike;
dd) Names, addresses of leaders of the strike;
e) Signature of representative of the union and seal.
3. At least 5 days prior to the strike, the union shall send representatives (3 at mosts) to
deliver the demand to the employer. At the same time, three copies of the demand will be
sent to the local DOLISA, provincial VGCL, and provincial employers’ organisation.
4. After the notice time as specified in Item 3 of this article, if the employer does not accept
the demand, the union will organise and lead the strike”.
Article 174c is added as follows:
“Art. 174c
1. Prior to and during strikes, the disputing parties have the right to negotiate with each other
and jointly request for mediation by government authorities and relevant organizations.
2. Prior to and during strikes, the Union Executive Committee has the right to decide:
a. the content of the demand letter on the basis of the collective labour dispute that
has gone through mediation and arbitration by enterprise conciliation council,
labour mediator and arbitration council;
b. to organise the strike involving all the workers or groups of workers of the
enterprise;
35
c. to amend the content of the demand or withdraw the demand.
d. to end the strike;
dd. to request for settlement by the People’s Court.
3. Prior to and during strikes, the employer has the right to decide:
a. to agree to all or part of the demands and notify its agreement to the Union
Executive Committee in writing;
b. to request for settlement by the People’s Court. The settlement of the People’s
Court does not affect the right to go on strike of the workers.
Art. 174d is added as follows:
“Article 174d:
1. Rights of workers on strike:
a) During the strike, workers do not receive pay or other benefits except when both sides
agree otherwise;
b) The workers who do not take part in the strike but have to stop working because of strike
are paid in accordance with Item 2, Art. 62 of the Labour Code.
2. In case of illegal strike, employers have the right to require the union, leaders of the
strike, compensate for any physical damage. The level of compensation is agreed between
two sides and if no agreement is reached, they can request for Court’s decision”.
Art. 174e is added as follows:
“Art. 174e
The following actions are prohibited prior to and during strikes:
1. preventing the workers to exercise their right to go on strike, forcing the workers to go on
strike, preventing non-strikers to go to work;
2. violent actions, damaging machines and property of the enterprise;
3. violation of public order and security;
4. terminating individual labour contract, imposing labour disciplines or transferring the
workers to other jobs or other locations as a result of the workers’ involvement to strike;
5. Revenging the workers for going on strike or leading strikes;
6. Unilateral suspension of business operation in order to resist the strike;
7. Taking advantage of strikes for illegal purposes.
Art. 174 is changed to Art. 175 and is revised as follows:
“Art. 175
Strikes are not allowed in such enterprises providing public services and essential products for
the economy and national security as stipulated by the Government.
The government authorities shall organise periodical dialogue with representative of the workers
and employers of these enterprises in order to timely address and resolve their legitimate
concerns and demands. Collective labour disputes arising in these enterprises shall be settled by
the Labour Arbitration Council. A disputing party has the right to request for settlement by the
People’s Court if it does not agree with the decision of the Labour Arbitration Council.”
Art. 175 is changed to Art. 176 and is revised as follows:
“Art. 176
When the strike is considered to become so serious that it may affect the national economy and
public security, the Prime Minister shall decide to postpone or stop a strike and assign
government authorities and request relevant organizations to resolve.
36
The Government shall provide regulations on the postponement of strikes and protection of the
benefits of the workers.”
Art. 176a is added as follows:
“Article 176a:
During or after the strike, the union is entitled to submitting a request to the Court for decision
over the lawfulness of the strike while the employer can submit to the Court for decision over the
unlawfulness of the strike. Time limit for submitting such request is 6 months as from the last day
of the strike”.
Art. 176b is added as follows:
“Art. 176b
1. Union Executive Committee or the employer who wishes to request the People’s Court to
consider the legality of the strike must make a written request.
2. The request must include:
a) Date of the request;
b) Name of the People’s Court;
c) Name and address of the requester;
d) Name and address of the Union organising the strike; name and address of leaders of the
strike;
e) Name and address of the employer;
f) Name and address of the enterprise where the strike takes place;
g) Issues to be settled by the Court;
h) The request must be signed and stamped by the requesters or their authorized
representative.
3. The request must be attached with copies of the demands, notification of the strike, decision
of the Provincial Arbitration Council evidences and documents relating to the strike.”
Art. 176c is added as follows:
“Art. 176c
Procedures for submitting and processing the request and providing evidences at the Court must
be in accordance with procedures for collective labour dispute resolution.”
Art. 177 is revised as follows:
“Art. 177
1. The Labour Court under the provincial People’s Court of the province where the strike takes
place has the authority to make a conclusion on the legality of the strike.
2. The Court of Appeals under the Supreme Court has the authority to settle grievances over the
decision of the provincial People’s Court on the legality of the strike.”
Art. 177a is added as follows:
“Art. 177a
1. The committee to consider the legality of the strikes comprises of 3 judges.
2. The committee to settle grievances over the decision on the legality of the strikes also
comprises of 3 judges.”
Art. 177b is added as follows:
“Art. 177b
37
Adjudication bodies, adjudicators, tasks and authority of the adjudicators and the replacement of
the adjudicators shall be in compliance with regulations in Chapter IV, Part 1 of the Civil Code.”
Art. 177c is added as follows:
“Art. 177c
1. Upon receipt of the request for consideration of the legality of the strike, the Tribunal
President assigns a judge to consider the request.
2. Within three working days since the receipt of the request, the assigned judge must decide:
a. to investigate the legality of the strike
b. to stop settling the strike
Art. 177d is added as follows:
“Art. 177d
1. The Court will stop settling the strike in the following cases:
a) the requesters withdraw the request;
b) the disputing parties negotiate with each other successfully and request the Court to
stop its consideration.
2. Within 5 working days since the suspension of the consideration of the legality, the Court
shall send its decision to stop settling the dispute to both disputing parties.”
Art. 177dd is added as follows:
“Art. 177dd
1. The committee to consider the legality of the strike shall be chaired by the assigned judge.
2. Authorised representatives of both disputing parties.
3. Representatives of other organizations as requested by the Court.”
Art. 177e is added as follows:
“Art. 177e
1. In the absence of either disputing parties or their authorized representatives, the meeting in
order to consider the legality of the strike shall be postponed.
2. The length of time of the postponement is proposed by the parties provided that it is not
longer than 3 working days.
3. The Committee continues to settle the dispute in the absence of either party if the party,
having been legally summoned, continues to be absent for the second time.”
Art. 177g is added as follows:
“Art. 177g
1. The judge who is also the chairman of the committee gives a briefing on the preparation and
process of the strike.
2. Authorised representatives of the two parties give their own views.
3. The committee considers the legality of the strike and makes decision on the majority
principle.”
Art. 178 is revised as follows:
“Art. 178
1. In cases when the workers do not come back to work and continue to go on strike even when
the strike is identified as illegal by the Court, labour disciplines, administrative sanctions or
criminal charges will be sought depending on the seriousness of the violation. Any material
damages to the enterprise shall be compensated in accordance with the laws.
38
2. Actions, taking advantages of the strike, such as committing violent actions, damaging
machines and property, preventing or inciting workers to go on strike, revenging strikers and
leaders of the strike will be charged with administrative sanctions or criminal charges
depending on the seriousness of the violation, damages shall be compensated in accordance
with the laws.
3. In case the employer violates the labour law and regulations, the investigating organizations
shall request relevant authorities to apply punishments.”
Art. 178a is added as follows:
“Art. 178a
The Union has to establish a reserve fund to be used for compensation to the company when
necessary.
The management and utility of the fund shall be in accordance with the laws.”
Art. 179 is revised as follows:
“Art. 179
1. The decision of the Court on the strike must include:
a) a conclusion that the strike is legal or illegal. If the strike is illegal, its illegality must be
explained.
b) Consideration of the demands of the workers:
- If the strike is legal, the Court continues to mediate disputing parties. If the parties can
reach an agreement then the Court acknowledges the agreement. If the parties fail to
reach an agreement, the workers can continue to strike.
- If the strike is illegal, the workers must top going on strike and return to work within one
day since the Court’s decision is issued.
2. The decision of the Court as stipulated in Clause 1 of this Article must be announced and
issued to both disputing parties at the meeting with immediate effect. The decision must
also be sent to the People’s Procuracy, enforcement bodies within 5 days since the
issuance of the decision.”
Art. 179a is added as follows:
“Art. 179a
1. Both parties shall strictly implement the agreement reached in the minutes of successful
mediation and the Court’s judgment. The parties will be forced to implement the
agreement in accordance with the laws if they do not voluntarily implement it.
2. Those who fail to implement or prevent the implementation of the Court’s judgment will
receive administrative sanctions or criminal charges depending on the nature and
seriousness of violation.”
39
ANNEX 6
Draft 4
Inter-ministerial Action plan on Solutions to Develop Sound Industrial Relations in
Enterprises
1. Completion of IR Policy and Legal Framework
a) Consultation over the Draft Amendment of the Labour Code (Chapter 14)
b) Development of under-law documents on mediation, arbitration and labour dispute
settlement to provide instructions on the Amended Labour Code once it is approved by
the National Assembly
c) Guidelines on mediation, arbitration, employers’ representation, union, social insurance,
CBA, wage and salary, working hours, OSH etc. in accordance with the governmental
requirements
d) Training and capacity building for labour conciliators, conciliation council, provincial
arbitration council in terms of labour dispute settlement
e) Development of bilateral cooperation mechanism at workplace, collective bargaining at
enterprises to facilitate the coordination between employers and workers in addressing IRrelated issues.
f) Development of detailed mechanism to protect local unionists and facilitate the
establishment of enterprise unions.
2. Improvement of dispute prevention and settlement in enterprises
a) Strengthen the propaganda and education of labour law to employers and workers as well
as their representatives.
b) Promote social dialogue among parties at workplace, at provincial and national level.
c) Build capacity for employers’ representative organizations to participate more effectively
in the tripartite social dialogue at provincial and national level.
d) Provide support and guidelines on establishment of enterprise unions, especially in
foreign-invested and Vietnamese private companies.
e) Provide training and capacity building for union officers at all levels in terms of
representational skills, mediation and arbitration for disputes and strikes, particularly for
union officers at FDI and private companies.
f) Intensify inspection over labour law implementation
g) Provide better assistance and support to member units of each signatories regarding IR
skills
h) Develop a data base on IR to facilitate the coordination among IR actors in dealing with
IR issues nationwide including mediation, dispute settlement, union, collective
bargaining, strike resolution.
40
i) Divide clear responsibilities among different actors and develop action plan for each
quarter or each year for each signatory from now till the end of 2007.
3. Promotion of international cooperation in Industrial Relations
A specific plan of international cooperation in IR with other countries and international
organizations, especially the ILO to share information and learn experiences in order to
contribute to better IR and smoother integration of Vietnam into the regional and global
community.
To be signed by
MOLISA
VGCL
VCCI
VCA
41