INDUSTRIAL RELATIONS AND STRIKES IN
VIETNAM
Dr. Tran Ngoc Dien
Ministry of Labor - Invalids and Social Affairs
Nurenberg, 08-09/10/2012
I. INDUSTRIAL RELATIONS IN VIETNAM DURING THE REFORM PERIOD
1.1. Industrial relations in the centralized planning mechanism
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Economy operating under the targets goverment, including target
of jobs (centralized planning)
Only two types of enterprise: state-owned (ownership of the
entire population) and co-operative (collective ownership)
Labor status is always distribute and controlled from central to
locality
Simple labor relations, consent to the assignment by the
competent authorities of the State
Passive labor, does not promote creativity, dynamism and
efficiency.
1.2. Industrial relations in the market mechanism
in Vietnam
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The economy is operating under the market mechanism
under the State management (compliance with the rules of
value, supply and demand, competition, efficiency)
Economic development policies have been issued, the
enterprises under different forms of ownership have been
strongly developed:
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State enterprises are the majority (entire people’ ownership);
Foreign Direct Investment (FDI) are encouraged;
Non-state enterprises (Equity shares or private)
Cooperatives (collective ownership) are of interest.
1.2. Industrial relations in the mechanism of
conversion market in Vietnam
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Labor and jobs are considered to be one of the key
policies.
Employees are entitled to freely find legitimate
appropriate jobs, which are protected by the State.
Industrial relation has developed by several forms:
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In the State and administrative agencies (Officials - Civil servants
and Specific Contract), employees are employed/salaried
according to the State regulations);
In other enterprises, the employees are recruited on a voluntary
application and equality with the employer through negotiation,
agreement and labor contract.
1.2. Industrial relations in the mechanism of
conversion market in Vietnam
Industrial relations between enterprises and employees:

In the State enterprises (the Leader who are representative of the
state-owned enterprise will be the employer)

In the foreign-invested enterprises (FDI) (owner directly or through a
hired representative will be the employer)

In private enterprises (Direct owner will be the employer), In Limited
Liability or Joint Stock Company (Direct owner or the hired
representative indirectly will be the employer)

In cooperative (direct owner is the employee or the employer)
II. DISPUTES AND STRIKE IN THE INDUSTRIAL RELATIONS
2.1. Labor disputes, strikes - The problems of market economy
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Labor disputes is a natural phenomenon in the market economy.
Labor disputes often arise when a conflict of rights and interests
between the employee and the employer to appear in the process of
implementation of labor relations;
Labor dispute with the protesting activities are the spontaneus and
passive self-defense as the employeers simply protect their right and
interest;
When conflict of rights and interests between the employees and the
employers is not resolved promptly and satisfactorily, the climax of the
labor disputes will be the strikes.
2.1. Labor disputes, strikes - Problems of market economy
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Vietnam is a country in transition economy following the market mechanism,
the problems arising in the labor relations on the imperfect labor market
are indispensable.
In labor relations, conflict between personal capacity, labor productivity,
wage income and the owner’s interests is constantly increasing, bringing
negative impact on labor relations;
To overcome the shortcomings mentioned above, Vietnam has issued a
number of policies and laws to regulate and manage the social relations in
the field of labor especially labor relations.
However, in comparison with the practical requirements, such policies still
contain limitations that do not meet demand on social development, of
which, labor disputes leading to strikes are becoming pressing issues.
Strike at Phong Phu Textile Company (Da Nang) on 02/07/2012
(Viet Nam Law Newspaper).
2.2. Strike situation in Vietnam for the period of 1995-2011
2.2.1. Strike in labor disputes in Vietnam
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Labor disputes and strikes in Vietnam for the period of 1995-2011
complicated and expanded widely. Total number of strikes in16 year is
4170. 245 strikes a year. In 1995 were 60 strikes, in 2003 were142, in
2008 were 720 and in 2011 were 885 (see Table 1, Figure 2).
The number of strikes increased, more frequently, with spatial scope
expanded not only in the south localities but also in the northern provinces
and the whole country. In 2011 in Binh Duong and Hochiminh City were
400 strickes, Hanoi were 41, Hai Phong & Hai Duong were 21).
The strike prolonged, the forms, content and nature of which have
changed, mixing disputes & struggles for the rights and economic interests
with socio-cultural benefits.
Total number of strikes occurred in period of 1995 - 2011
(Source: Ministry of Labour - Invalids and Social Affairs)
Year
Total by
year
Type of Enterprise
State
Enterprise
FDI
Private
Enterprise
1995
60
11
28
21
1996
59
6
39
14
1997
59
10
35
14
1998
62
11
30
21
1999
67
4
42
21
2000
70
15
38
17
2001
90
9
55
26
2002
99
5
65
29
2003
142
3
104
35
2004
124
2
92
30
2005
152
8
105
39
2006
390
4
287
99
2007
551
1
438
112
2008
720
0
584
136
2009
218
0
158
60
2010
422
0
360
62
2011
885
3
676
206
4170
92
3136
942
Total
State
Enterprise
Percentage (%)
FDI
Private
Enterprise
18,33
46,67
35
10,17
66,10
23,73
16,95
59,32
23,73
17,74
48,39
33,87
5,97
62,69
31,34
21,43
54,29
24,29
10,00
61,11
28,89
5,05
65,66
29,29
2,11
73,24
24,65
1,61
74,19
24,19
5,26
69,08
25,66
1,03
73,59
25,38
0,18
79,49
20,33
0,00
81,11
18,89
0,00
72,48
27,52
0,00
85,31
14,69
0,34
76,38
23,28
2,21
75,20
22,59
Chart 2: Percentage of strikes by type of business
90
80
70
60
50
40
30
20
10
0
1995 1997 1999 2001 2003 2005 2007 2009 2011
DN NN
DN FDI
DN DD
2.2.2. Some of the major reasons of labor disputes and strikes
in Vietnam
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In different stages, labor disputes have different contents and
characteristics.
In the 90s of the 20th century, the cause of this phenomenon is mainly
due to "cultural differences, points of view and perceptions."
From 2001 up to now, economic benefits and right to work have
become major reasons.
Strikes took place in different types of businesses (Strike in FDI sector
more common (up 75.2%), in the private enterprises (22.59%) and
State Enterprises (2.21%)).
Strikes in FDI sector are varied by different owners of capital (Taiwan
37.8%; Korea 30.09; Singapore and the United States 1.18%).
Strike at Hung Nghiep Co., Ltd. (Pouchen Vietnam) – Dong Nai on
05/4/2010 (Source: Tuoi Tre Online)
Chart 3: Percentage of strikes in the FDI by origin of capital
investment
40
35
30
25
20
15
10
5
0
DN
có vốn
đầuTaiwan
tư Đài Loan
FDI
from
FDI
from
DN
có
vốnfrom
đầuTaiwan
tưKorea
Hàn Quốc
FDI
DN khác
FDI
from
others
FDI
from
Korea
Strike at Matrix Co., Ltd. – (Vinh - Nghe An) on 26/12/2009
(Source: Dan tri Online)
Four main reasons lead to labor disputes and strikes in
Vietnam
The cause of the labor management agencies
The cause of the workers
The cause of the business owners
The cause of the representations for the
employees’ rights and interests
First, the cause of the labor management agencies
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Policies on labor relations have not been completed, there were leaks in
legal framework and weakness in labor management;
Legal system on labor relations have not enough specific details;
Content of the labor legal system still contains some provisions that are
not enough comprehensive and flexible as requested by the market
economy;
In the process of implementation there are many limitations, lack of
clear regulations on powers and responsibilities of the competent
agencies (State Representative, enterprises’ representatives, employees’
representatives);
Capacity of the policy enforcement system have not meet the demand
of a transformed, dynamic, diverse and complicated labor market.
Second, the cause of the workers
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A large number of employees in Vietnam lack of understanding of labor
law;
Due to lack of knowledge on labor laws, the employees do not have the
sense of labor discipline, when stressed into an industrial production
machinery they felt to be so confined that lead to the psychological
inhibition (60% of employees consider that the strike is to relieve
psychological pressing for strict, restrictive labor regulations;
Due to the lack of understanding, the employees do not pay attention to
the commitments on their obligations and responsibilities for the
enterprises when entering into labor contract, the conflicts, therefore, arise
during the implementation of the contract.
Increasing inflation, decreasing real income of the employees affects their
material and spiritual life, causing psychological stress, depression…,
leading to the strikes with request on increase of salary, bonuses and
welfare activities.
Third, the cause of the business owners
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Business owners seriously pay attention to the exploitation of cheap
labor force instead of development of long-term human resource.
Business owners exploit labor force through maximize equipment
performance and work time;
Businesses often split wages into two parts: basic salary and additional
amounts in order to avoid or minimize the contribution of obligations
such as social insurance, health care insurance, unemployment
insurance... This type of salary structure causes stress and totally
exploits the workers’ force.
Hard working conditions and pressing working time but inadequate
wages of workers leads to difficult life and deprivation;
Business owners do not pay attention to the laborers’ cultural, mental &
emotional lifes.
Fourth, cause by the representations for the laborers’ rights and interests
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The trade unions in enterprises operate under the movement and
inefficient.
Trade union officials do not often work closely with the labor collective,
not really pay attention to the workers’ aspirations, often compromise in
order to protect their own interests.
The representation of trade union is faint due to lack of the power in the
laborers’ trust.
The trade unions agencies is insufficient and weak in consulting activities
to support the workers when the labor dispute occurred.
When strikes occurred, 90% of the trade unions do not capture the
information on the case and do not forecast the arising situations.
III. SOME SOLUTIONS Promoting harmonious labor relation and
mitigating strike
3.1. Enhance the State management over labor relations
State with a subjective role in promulgating policies, laws, guiding the
implementation, monitoring and supervising the compliance with labor laws,
strictly handling the violations of labor laws, promoting harmonious labor
relations, should carry out the following tasks::
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Complete the general, comprehensive, and flecxibe labor law system in order to
protect the legitimate rights and interests of the parties in labor relations;
Perform the function of State management, supervise, inspect and strictly handle
violations. Strickly and efficiently implement the new Labor Code (adopted in 2012,
effective as of May 01, 2013)
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Tăng cường chỉ đạo hoạt động cơ chế đối thoại 3 bên, minh bạch linh hoạt và
hiệu quả
c. Form and equip the agencies and organizations supporting the labor relations with
operational capacity
d. Consistently direct the implementation of 3-party dialog mechanism, transparency,
flexibility and efficiency.
3.2. Improve the social responsibility of business and the
employer
For the Company:
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
- Promoting propaganda on labor law towards corporate social
responsibility is a commitment to human behavior, ethically and contribution
to the sustainable development of society;
- Organize activities to honor and promote the typical example of
effective implementation in the field.
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For the employer:
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- Raise the awareness of the laws;
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- Execute transparent remuneration for the employees;
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- Enhance dialogue at work, resolve promptly the recommendations of the
workers ...
3.3. Improve the employees’ understanding of the laws
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Enhance legal awareness through dissemination of labor
rights, benefits, responsibilities and obligations of
employees in the legally binding labor relations;
Immediately bring program on disseminating laws to the
programs of general education and vocational training;
Create conditions for employees to learn labor laws
through the mass media, books, documents, consulting;
Organize the movements to learn labor laws, especially for
sensitive issues such as the rights, interests, and negotiate
disputes in labor relations.
3.4. Enhancing the role of trade unions
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Need to continue to improve regulations on the functions of the trade
union organizations.
Should equip the union leaders with legal knowledge to participate in
mediation, negotiation, protect the legitimate rights and interests of
labor collectives.
Ensure credibility and accountability of the executive committee of the
trade union through activities based on real trust of workers, operating
according to the requirements and duties as a bridge to protect the
legitimate rights and interests of workers.
Strictly and effectively implement the provisions of the new Trade Union
Law (adopted in 2012, effective as of Jan 01, 2013).
THANK FOR YOUR ATTENTION!