Report on the Survey on Industrial Relations in East Asia
COLLECTIVE BARGAINING IN VIETNAM
ILO- Japan Multi- Lateral Project, 2006
Report on the Survey on Industrial Relations in East Asia
COLLECTIVE BARGAINING IN VIETNAM
Prepared by ILSSA – MOLISA (first draft)
Revised and Edited by Do Quynh Chi
ILO-Japan Multi-Lateral Project, 2006
2
COLLECTIVE BARGAINING
IN VIETNAM
Prepared by ILSSA – MOLISA (first draft)
Revised and Edited by Do Quynh Chi
© ILO- Japan Multi-Lateral Project, 2006
International Labour Organization
Subregional Office for East Asia
United Nations Building
Rajdamnern Nok Avenue
P.O. Box 2-349 Rajdamnern
Bangkok 10200, Thailand
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Contents
Part 1: Legislative and Institutional Framework for Industrial Relations
A. Legislation on Labour Standards
B. Freedom of Association
Part 2: Industrial Relations Actors
A. Government
Labour inspection system
Labour Dispute Settlement Machinery
Labour Market Data
B. Employers
C. Employees
Union structure
Union objectives and functions
Establishment of a union
Union elections
Union officials
Union Finances
Part 3: Legal and Institutional Framework and Practice of Collective
Bargaining
A. Legal Sources and Relevant Legislative Provisions
B. Duty to Bargain
C. Definition and Legal Status of Collective Agreements
D. Levels of Collective Bargaining
Collective bargaining at the enterprise/ workplace level
E. Bargaining Units
F. Bargaining Agents/Parties to Collective Agreements
Employees
Employers
Multiple bargaining agents at a given bargaining unit
Role of national-level organizations
G. Scope of Collective Bargaining
H. Procedural Requirement for Concluding a Collective Agreement
I. Failure to Conclude an Agreement
J. Modification and/or Termination of an Agreement
K. Enforcement
L. Extension of a Collective Agreement
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M. Coverage and Significance of Collective Agreements
N. Collective Bargaining in Public Sector
O. Other Mechanisms of Representation
Part 4: Trends, Issues and Debates: Social partners’ and Political
Actors’ Views and Proposals for Future development of national
Bargaining Systems
Collection of data on collective bargaining
References
Appendices
Appendix 1: Organizational Structure of MOLISA
Appendix 2: Organization chart of ILSA
Appendix 3: VCA Organizational chart
Appendix 4: VCCI Organizational chart
Appendix 5: Organization Chart of VGCL
Appendix 6: List of Central Sectoral Unions
Appendix 7: Official Form of Collective Labour Agreement (issued in attachment to
Decree 196, 31 December 1994)
Appendix 8: Example of a strike in a Japanese Electronics Company
Appendix 9: Basic labour data
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Part 1:
Legislative and Institutional Framework for Industrial
Relations
A. Legislation
on Labour Standards
The Labour Code of Vietnam which was passed by the National Assembly on 23 June 1994
and became effective on 1 January 1995 is the major legislation on labour standards. The
launch of the ‘Doimoi’ policy in 1986 marked the commencement of Vietnam’s transition from
a centrally-planned economy into a market-oriented economy. After the historic promulgation
of the Law on Enterprise in 1999 which recognized the private sector, industrial relations in a
market economy began to emerge. The 1995 Labour Code, therefore, paved the way for the
growth of a multi-sectored, multi-ownership economy by providing a new legislative
framework to “regulate the rights and obligations of workers and employers, labour standards,
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labour utilization, and management principles”.
The Labour Code consists of 17 chapters and 198 articles. The legislation has been revised
twice since 1995. The first major revision took place in 2002 and the second one in 2006
which specifically focused on Chapter 14 on Labour Dispute Settlement. In 2006, three major
chapters of the Labour Code were developed into three pieces of legislation: the Law on
Social Insurance, the Law on Labour Export and the Law on Vocational Training. The Ministry
of Labour, War Invalids and Social Affairs (MOLISA) plans to revise the Labour Code by 2009.
The Labour Code removed a number of direct interventions by the State in the realm of
industrial relations. Instead, the State’s role is now confined to providing the legislative
framework for industrial relations, making policies on human resource management and
supporting employers and workers to develop sound labour relations. Industrial relations are
defined by collective bargaining based on the principles of voluntariness, equity, cooperation
and respect of mutual rights and benefits.
The implementation of the Labour Code is guided by a number of supplementary documents
including governmental decrees, ministerial and inter-ministerial circulars, and directives by
ministerial-level organizations (the Vietnam General Confederation of Labour, for instance).
The 1995 Labour Code and its revisions in 2002 and 2006 apply to “all workers and
organizations or individuals utilizing labour on the basis of a labour contract in any sector of
the economy and in any form of ownership” (Labour Code, Article 2). The legislation also
covers Vietnamese workers employed by foreign enterprises, foreign or international
organizations and foreign workers employed by enterprises, organizations or individuals in the
territory of Vietnam (Labour Code, Art. 3).
For government employees, appointed and elected officials, members of the armed forces
and police force, members of public organizations, members of other political and social
organizations and members of cooperatives, the Labour Code is not applicable, except for
selective provisions such as those on social insurance (Labour Code, Art. 4).
Self-employed workers and those who are not engaged in labour relations, however, are not
regulated by the Labour Code. Yet, these types of workers make up a half of the national
labour force.
B. Freedom of Association
Vietnam has not ratified the ILO Conventions on Freedom of Association and Collective
Bargaining (Nos. 87 and 98). Yet Article 69 of its 1992 Constitution declares that “a
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Preamble of the 1995 Labour Code
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Vietnamese citizen has the freedom of expression, freedom of press, the right to information,
the right to meet, associate, and take part in demonstration in accordance with the law”.
Paragraph 2, Article 7 of the 1995 Labour Code provides that: “an employee shall have the
right to form, join, or participate in union activities in accordance with the Law on Trade
Unions in order to protect his legal rights and benefits”.
The right of association of Vietnamese workers is echoed in the 1990 Law on Trade Unions:
“Vietnamese workers working in enterprises of all economic sectors, foreign-invested
businesses, mass-organizations, public services shall have the right to form and join unions
within the framework of the Union Statute” (para. 2, Art. 1, Chapter 1). However, the
Government issued Decree 96-2006 on Enterprise-level Unions and Provisional Union
Establishment which limits the right to join a union for workers with labour contracts of over 6
months.
Chapter 5 of the Labour Code specifies provisions on collective bargaining and collective
agreements. Particularly, Article 46 states that: “each party [of labour relations] shall have the
right to request the signing of a collective agreement and to propose its terms and conditions”.
Union organization, union rights and obligations are specified by two major legislations: the
1990 Law on Trade Unions and the 2003 Union Statute. The Law on Trade Unions was
passed by the National Assembly. The Union Statute (or Constitution), which is similar to
statutes governing organizations like the Vietnam Chamber of Commerce and Industry (VCCI)
and Vietnam Cooperative Alliance (VCA), was drafted and approved by its National Congress
and passed and promulgated by a Decision of the Prime Minister.
Chapter 3 of Article 14 of the Union Statute provides that “a workplace union can be set up at
an enterprise, industrial, service and craft cooperative, public services, State agency, political
and socio-political organization, professional association which already have at least 5 union
members and the higher-level union has issued a decision on the formulation of the union”.
There are four basic levels in the Vietnamese union structure:
1.
2.
3.
4.
Enterprise/occupation-based unions,
District, general corporation or provincial sectoral unions,
Provincial federations of labour or central sectoral unions, and
The Vietnam General Confederation of Labour.
Since the Vietnam General Confederation of Labour is the only recognized national
representative organization of workers in Vietnam, all workplace (enterprise) unions are set
up by the higher-level VGCL union and registered within the umbrella of the Confederation.
Therefore, a multiplicity of unions does not exist in Vietnam. The VGCL also represents
Vietnamese workers at the International Labour Conference of the ILO.
There is no distinction between employees in the private sector and those in public sector
with regard to the right to join trade unions. The scope of union membership is defined both in
the Law on Trade Unions (Para. 2, Art. 1, Chapter 1 as stated above); and in the Union
Statute: “Vietnamese workers and public servants who are wage earners and legitimate selfemployed workers irrespective of gender, religion, and profession shall be entitled to join the
union if they agree with this Statute, voluntarily join a local unit of the union, and pay union
dues” (Chapter 1, Art. 1).
Tripartism in Vietnam remains at its infancy. The first and only legislation on tripartite relations,
Decree 145-2004, regulates the relationship between the State and the social partners in
relation to tripartite consultation over labour-related policies and coordination in industrial
relations activities. Chapter 1, Article 2 of the Decree recognizes the VCCI and VCA as the
two national employers’ organizations to engage in tripartite consultation: “The employers’
representative organizations referred to in this Decree are the Vietnam Chamber of
Commerce and Industry and Vietnam Cooperative Alliance”. However, as it is not obligatory
for companies in Vietnam to register or acquire membership of any employers' organizations
or business associations, the membership coverage of these two organizations remains
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limited: the VCCI has 7,000 member companies and business associations and VCA has 602
member cooperatives.
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Part 2:
Industrial Relations Actors
A. Government
The highest government body responsible for industrial relations and labour policies in
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Vietnam is the Ministry of Labour, Invalids and Social Affairs (MOLISA). MOLISA was set up
in 1987 as a result of the merger of the Ministry of Labour and the Ministry of Invalids and
Social Affairs. The mission of MOLISA is provided in Art. 1 of Decree 29 (issued by the
Government on 31 March 2003, regulating the functions, tasks, authority, organizational
structure of MOLISA): "Ministry of Labour, Invalids and Social Affairs (MOLISA) is the
governmental agency in charge of state administration over labour, employment, work safety,
vocational training, policies for wounded veterans, fallen soldiers, national devotees, social
assistance, and prevention from and combating against social evils in the whole country".
The organizational structure of MOLISA originated from the previous centrally-planned era
when modern industrial relations issues were not as important as they are now. Therefore,
there has not been a single specialised department in MOLISA responsible for industrial
relations policy to date. Several different departments, including the Departments of Legal
Affairs, Wage and Salary, and Labour and Employment Policy, share the responsibility for
industrial relations.
MOLISA’s main office consists of 14 technical departments and other financially semiautonomous units such as the Labour and Social Affairs Publisher, Labour and Social Affairs
Daily Newspaper and Journal, University of Labour and Social Affairs, orthopaedics centres,
vocational training schools, employment service centres etc. The administration body spreads
from the central to communal level throughout the country. See Appendix 1 for an
Organizational Chart of MOLISA.
Labour inspection system
The Government’s labour inspection system consists of three parts: labour policy inspection,
work safety inspection and occupational hygiene inspection. Previously, the first two functions
came under the responsibility of the Labour Inspectorate of MOLISA and the third one fell into
the authority of the Health Inspectorate of the Ministry of Health. In March 2003, after the first
revision of the Labour Code, the three labour inspection components were merged into the
Labour Inspectorate under the administration of MOLISA.
There are approximately 300 labour inspectors in Vietnam. At the national level, the Labour
Inspectorate in MOLISA is headed by the Chief Inspector and two deputy chief inspectors.
Major responsibilities of the Ministry-level Inspectorate include: inspecting the enforcement of
labour policies (on employment, vocational training, labour relations and social insurance),
work safety and occupational hygiene in collaboration with sectoral inspectorates;
investigating work accidents and violations of work safety rules; imposing fines and penalties
on violators of the labour legislation (Decree 29, issued in March 2003).
Each provincial Department of Labour, Invalids and Social Affairs (DOLISA) has a division for
labour inspection, which consists of provincial labour inspectors in charge of inspecting the
enforcement of labour policies, work safety and occupational hygiene of enterprises within the
localities. Their specific functions are: developing annual plans for inspection; inspecting local
companies' compliance with labour legislation on working conditions, safety and health and
occupational hygiene; working with central labour inspectors to carry out inspection visits and
investigations.
Labour Dispute Settlement Machinery
2
MOLISA website: www.molisa.gov.vn
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The revised Chapter 14 of the Labour Code provides for the procedures and machinery for
settling individual, right-based and interest-based collective labour disputes. The first step of
the dispute settlement procedures is conciliation by either a conciliation council set up by
management and union at the enterprise level or a District Labour Conciliator. The District
Labour Conciliator is a paid staff of the district labour administration (Office for Labour,
Invalids and Social Affairs) appointed to resolve labour disputes.
Collective interest disputes must go through the Provincial Arbitration Council. Chapter 14,
Article 164 provides that the Arbitration Council is a tripartite body with members of the
provincial labour administration (DOLISA), the union (VGCL) and employers’ organization/s
and experts in labour relations. The Arbitration Council is located within the DOLISA. The
chairperson and secretary of the Arbitration Council are representatives of the provincial
labour administration. Funding for the arbitration council is provided by DOLISA.
A major problem with the dispute settlement machinery is that since 1995, a vast majority of
strikes have been wild-cat strikes which neither followed the legal procedures nor settled by
the legitimate machinery. As such, the revised Chapter 14 of the Labour Code allows the
intervention of the labour administration to settle wild-cat strikes (Article 159, Clause 3). When
a wildcat strike happens, the common practice in many provinces and cities such as Ho Chi
Minh City, Dong Nai and Binh Duong is for the labour administration, the provincial union and
the VCCI (if VCCI has a branch in the locality) to form an ad hoc strike taskforce which would
visit the striking enterprise to settle the dispute. Though the Labour Code provides for
intervention of the labour administration and the use of provincial strike taskforces have been
formalized in Dong Nai, Binh Duong and Ho Chi Minh City, there are still no legal provisions
on strike settlement procedures and the authority of the strike taskforce to date. So far, the
labour administration at the provincial level is responsible for the funding and logistical
arrangement of strike taskforces.
Labour Market Data
MOLISA operates two channels of regular statistical data collection on the labour market
situation: one is the reporting system of the labour administration apparatus from the district
level to the provincial and ministerial level. These reports are prepared separately by different
technical divisions in DOLISAs before being submitted to different departments of MOLISA
accordingly. For example, reports on work-related accidents and diseases go to the Bureau of
Work Safety while reports on employment/unemployment/underemployment rates and
collective agreements are collected by the Department for Labour and Employment Policy,
and reports on wages and strikes are submitted to the Department of Wage and Salary.
The second pool of labour market statistics is the annual labour and employment survey
which MOLISA conducts every July in collaboration with the General Statistic Office (GSO).
Recently, within the framework of an EU-funded project, MOLISA has formulated a set of over
70 labour and employment indicators to be applied for all sectors in the economy. These
labour market indicators will have to undergo a testing period before actual implementation.
The Institute of Labour and Social Affairs (ILSA) is the research arm of MOLISA. It specializes
in examining all issues related to labour, employment and social affairs, including work safety,
wage and salary, labour relations, labour standards, social policy and gender. ILSA was
established in 1978 under the Decision 1445 of the Minister of MOLISA with the functions of
organizing researches and baseline surveys, and collecting and disseminating information
and outcome of studies in the area of labour, invalids and social affairs.
See Appendix 2 for an Organizational Chart of ILSA.
B. Employers
In contrast to the one officially recognized union, more than one employers’ organization has
been recognized. At the national level, the Vietnam Chamber of Commerce and Industry
(VCCI) and the Vietnam Cooperative Alliance (VCA) are the two recognized national
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organizations which represent Vietnamese employers in provincial, national and international
tripartite forums (Decree 145/2004/ND-CP).
The Statute of the VCCI, which was approved by the Prime Minister in June 2003, provides
for four types of VCCI members, including:
1. Official members: Registered enterprises, employers and business associations
operating in Vietnam;
2. Associate members: Enterprises and business associations operating overseas that
have commercial relations with Vietnam or have commercial presence in Vietnam;
3. Consultant members: Professional organizations and experts in Vietnam and abroad
who are capable of supporting the VCCI in their functions; and
4. Honoured members: People with exceptional contribution to the VCCI.
In 2006, VCCI claimed 7,000 members which include business associations, general
corporations, SOEs, domestic private enterprises and foreign-invested enterprises. According
to VCCI, it now represents 150,000 enterprises and 2.5 million household businesses which
employ around 10 million workers in total. See Appendix 3 for an Organizational Chart of
VCCI.
The VCA divides its membership into two types:3
1. Official members: Cooperatives and alliances of cooperatives; and
2. Associate members: cooperative groups, social and economic units, trade
associations, research and training institutions and other national and foreign
economic organizations.
VCA has 6 member associations with 402 cooperatives operating in the fields of trade and
service (101), transport-loading (131), handicraft-construction (98), agriculture (32) and credit
funds (10). See Appendix 4 for an Organizational Chart of VCA.
Originally, both the VCCI and VCA were set up as trade/business associations. It was only
after 1995 when the Prime Minister decided to supplement the two organization’s
responsibilities with the function of representing employers in industrial relations. Now, the
VCCI and VCA simultaneously carry out both functions of trade promotion and employer’s
representation.
In accordance with Decree 145 on tripartite consultation, the VCCI and VCA have the
authority to represent member employers in making contributions to relevant draft legislative
instruments when they are consulted by the labour administration. There is no legislative
provision that directly provide VCCI, VCA or any other business association the mandate to
represent members in collective bargaining. Chapter 5 of the Labour Code on collective
bargaining defines specific regulations on collective bargaining at the enterprise level only.
Article 45 of Chapter 5 provides that the employer’s representative in collective bargaining is
the Director of the enterprise or someone authorized by the Director. However, Chapter 5,
Article 54, also states that “the provisions of this Chapter shall be applied to the bargaining for
and signing of collective agreements at the industrial level”. Therefore it is not entirely clear
whether an employer organization has the legal mandate to represent member enterprises in
industry-level collective bargaining or not. To some extent, the above provisions can be
interpreted as such.
Regarding their representational capacity, the two organizations also face difficulties in terms
of membership coverage. While the VCA enjoys a nationwide administrative network from the
central to provincial level, its membership only includes cooperatives and small-sized
enterprises. Members of the VCCI are large corporations and business associations; yet, its
network at the local level is confined to seven provinces/cities and not necessarily the most
industrialized ones. In practice, the two organizations remain reluctant to promote collective
bargaining among their members.
3
http://www.vca.org.vn/htx/Vietnamese/C1283/default.asp?Newid=58
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The provincial offices of VCCI and VCA are in charge of representing local member
employers in provincial tripartite institutions and activities (Decree 145) as well as voicing their
members' interests to the local authority, carrying out trade promotion activities and providing
training and counselling services to members. At the local level, they are also responsible for
coordinating with employers (both members and non-members) to participate in industrial
relations initiatives and institutions, including labour dispute settlement and consultation of
policies and legislation. There is neither a legal provision providing for nor practice of their
participation in sectoral collective bargaining. Therefore, it is difficult to define their roles in
this aspect.
VCCI and VCA provide their members with a number of supporting services, including training,
research, trade promotion, policy advocacy, organization of seminars, conferences and
regular meetings with relevant authorities.
In a Memorandum of Understanding (MOU) signed between the VGCL and VCCI in 2006, the
two parties agreed to collaborate in a number of activities to promote sound industrial
relations, one of which is to initiate collective bargaining and the signing of industry-level
collective agreements. This plan, however, has not been carried out to date.
As stipulated by the VCCI Statute, the highest decision-making body of VCCI is the VCCI
Congress held every 5 years. The Congress shall make decisions, by majority vote, on VCCI
strategies and long-term plans as well as elect the new Board of Directors. In daily activities,
the Board of Directors makes decisions over annual plans and programs of the organization
while a standing committee appointed by the Board of Directors shall oversee day-to-day
management. VCCI’s income comes from membership fees, revenues from its services and
subordinate units, government payments for state assignments and other sources of
voluntary contributions or grants.
As provided by the 2003 Cooperative Law and 2005 VCA Statute, the highest decisionmaking body of VCA is the VCA National Delegate Congress organized every 5 years. The
Congress approves, by majority vote, strategies and long-term plans of the Alliance. An
executive committee in charge of decision-making is elected by the Congress with tenure of 5
years. A standing committee is appointed by the executive committee to implement the
decisions of the Congress and the executive committee, as well as carry out the day to day
administrative activities of the organization. The Statute of each provincial VCA office is
developed in accordance with the general VCA Statute and approved by the provincial
People's Committee.
There are also industry associations such as the Vietnam Textile and Garment Association
(VITAS), Leather and Footwear Association (LEFASO) and foreign investors’ associations
including those of Taiwanese, Korean, Japanese, European, and American businesses in
Vietnam. While they have not been recognized as employers' representative organizations at
any level, these associations are expressing a stronger voice and influence in industrial
relations by informally participating in the setting of wages and working conditions. There are
several ways they can yield impact on labour relations: first, through regular meetings with the
local and national authority (annual meeting with the Prime Minister, leaders of provincial
authority); second, by influencing their member employers; and third, by meeting with highranking officials on an ad hoc basis. Most business associations, including LEFASO, VITAS,
AmCham, EuroCham and associations of Japanese, Korean and Taiwanese investors are
members of VCCI. However, they have been relatively independent of VCCI in representing
their members’ views and interests. In 2006, for example, when the government was
considering raising minimum wages in the Foreign Direct Investment sector due to pressures
from workers on strike, EuroCham and the Japanese Investors’ Association wrote to the PM
to express their members’ views on minimum wage related policy decisions. They also
requested meetings with MOLISA to present their members’ concerns. Even though there
have been cases where VCCI coordinated with its members to influence the policy-making
process (for instance, lobbying to raise the overtime limit from 200 hours/year to 300
hours/year), business associations have generally relied on their own influence and relations
with the Government to lobby for their members’ interests.
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In Vietnam, there is no separate employers' organization of government employers (in the
public service). Civil servants have no right to collective bargaining. Salaries and working
conditions in this sector are determined by the Ministry of Home Affairs and Ministry of
Finance.
C. Employees
The term “trade union” is defined in Art. 10 of the 1992 Constitution as: “a socio-political
organization of the working class and workers, which, together with the State agencies and
other economic and social organizations, shall take care of and protect the rights and
interests of government officials, public servants, and other types of workers; take part in
State and social administration; monitoring the activities of the State agencies and economic
organizations; and educating government officials, public servants and other workers to
defend and develop the country”.
The definition is elaborated in Chapter 1 of the Law on Trade Unions: “the union is a sociopolitical organization voluntarily established by the Vietnamese working class and workers
under the leadership of the Vietnam Communist Party; the union is a member of the political
system of Vietnam; and the union is the school of socialism for workers”.
Union structure
The basic unit of a trade union is organized at the enterprise level, which is referred to as a
“workplace union” (“cong doan co so”) in the Union Statute 2003. Chapter 2 of the Union
Statute provides the legislative basis for the organizational structure of unions, which is
divided geographically/provincially (or horizontally) and on industry/sector basis (or vertically).
See Appendix 5 for an organizational chart of the VGCL. The VGCL comprises of 64
provincial federations of labour and 20 national sectoral unions including postal service,
health care, education, oil and gas, electricity, commerce and tourism, banking, among others.
See Appendix 6 for a list of central sectoral unions, each of which has a network of provincial
sectoral unions.
An enterprise in the industry has the freedom to choose to be a member of the sectoral union
or the district federation of labour. According to the VGCL statistics, a vast majority of
members of sectoral unions are unions of SOEs and joint-ventures between SOEs and
foreign partners.4 Only a small number of their members come from the private sector. For
instance: only 23 out of 124 members of the commerce and tourism national union are from
the non-state sector. Within one sector, there is no demarcation, by law or in practice, of
union membership based on the different jobs carried out by workers. For example, all
employees of a hospital including doctors, nurses, administrators, orderlies, cleaners are
members of the hospital union which is subordinate to the health sectoral union. In provinces
where industrial-processing zones (IPZs) have been set up, unions of companies inside these
zones come together under the provincial IPZ union which is subordinate to the provincial
federation of labour (Union Statute, Chapter 3, Art. 14, para. 1).
Though it is not so common, the Union Statute also provides for the formation of occupationbased union (“nghiep doan”) for self-employed workers in a geographical area (mostly at the
commune level). These occupation-based unions either report to the provincial sectoral
unions (if any) or to the district federation of labour.
4
VGCL website: www.congdoanvn.org.vn
13
Table 2.1 VGCL: Organization Statistics 2005
National Trade
Union Organization
Industry/sectoral or
regional TU orgs.
Vietnam
Confederation of
Labour
64 provincial
Federation of Labour
Total membership:
5.2 million (June
2005)
20 Sectoral Unions
Number of
enterprise where
trade union units
are organized
66,415 (53,312
SOEs and 13,103
non-state
enterprises)
4,451 (3,688 SOEs
and 763 non-state
enterprises)
Membership*
3,713,690
1,373,132
* According to the VGCL, by June 2005, union density in the public service is 95 percent; 90
percent in the SOE sector; 50 percent in the foreign-invested sector; 33 percent in domestic
private sector; and 16 percent among cooperatives.
In 2006, the VGCL membership data showed 76,678 workplace and occupation-based unions
in Vietnam, of which 14,543 operate in the non-state sector. Each union is subordinate to 623
district federations of labour or 436 provincial sectoral unions, which in turn report to 64
provincial federations and 20 central sectoral unions.
Union objectives and functions
Art. 28 of the Union Statute states that the mandate of a provincial federation of labour
incorporates:
(i) To implement the policies and decisions of the Party, the State and the VGCL in the
province;
(ii) Protect rights and interests of union members and workers within its administration
and representation scope by monitoring the compliance of local employers with
related legislations in collaboration with competent authorities, participating in the
provincial labour arbitration council, directing labour dispute settlement, investigating
occupational accidents in the locality in coordination with the labour administration;
(iii) Organize cultural, sport, and entertainment activities for local workers and manage
union culture buildings, employment service centres and law counselling offices set
up by the union; and
(iv) Carry out public relations activities in compliance with VGCL regulations.
Functions of a central sectoral union are stipulated in Art. 26, clause 3:
(i) Represent the legitimate rights and interests of union members and workers in the
sector;
(ii) Take part in the State administration over the sector in conjunction with Ministries,
agencies, organizations and the VGCL;
(iii) Administer, supervise and support the operation of subordinate unions including
organizing union’s congress, educating workers of relevant legislations, signing
labour contracts, negotiating and signing collective labour agreements;
(iv) Coordinate with provincial federations of labour to supervise and support the
operation of provincial sectoral unions; and
(v) Carry out public relations activities in compliance with VGCL regulations.
Functions of a union of industrial-processing zones (IPZ) in one province, as stipulated by Art.
23, clause 3, are:
(i) Work with the labour administration of the province and the IPZ management board
to monitor the compliance with labour legislation in the IPZs; Settle labour disputes
and address grievances of workers in the IPZs;
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(ii) Supervise and provide instructions to workplace unions: to develop, negotiate, and
sign collective labour agreements, take part in developing work rules of the enterprise,
establish enterprise labour conciliation council, resolve labour disputes and take care
of the material and spiritual life of workers; and
(iii) Set up workplace unions, recruit new members, and strengthen the capacity of
workplace unions.
Functions of district federation of labour, as stipulated by Art. 22, clause 3, are:
(i) Collaborate with the local authority to monitor the compliance with labour legislation
of enterprises in the area; settle labour disputes and address grievances of workers;
and
(ii) Set up workplace unions and occupation-based unions, recruit new union members.
Functions of workplace union and occupation-based union, as stipulated by Chapter 3, Art 1519 are:
Union in the public service:
(i) Monitor the implementation of relevant legislation to ensure the legitimate rights and
interests of public servants; settle labour disputes;
(ii) Cooperate with the management to take care of workers’ material and spiritual life;
Assist workers in signing labour contracts; and
(iii) Recruit new union members.
Union in the SOEs:
(i) Negotiate and sign collective labour agreements on behalf of workers; Assist workers
to sign labour contracts;
(ii) Join with the management to improve working conditions, interests and living
standards of workers;
(iii) Monitor the enterprise’s compliance with labour law and settle labour disputes; and
(iv) Recruit new union members.
Union the non-state enterprises:
(i) Negotiate and sign collective labour agreements on behalf of workers; Assist workers
to sign labour contracts;
(ii) Monitor the employers’ compliance with the labour legislation and collective
agreements;
(iii) Participate in the enterprise conciliation council on behalf of workers; settle labour
disputes; and
(iv) Recruit new union members.
Occupation-based unions:
(i) Provide members with information regarding relevant laws, policies, and advocacies
of the State;
(ii) Represent members to work with the local authority and competent agencies to take
care and protect the legitimate rights and interests of members; and
(iii) Recruit new union members.
Establishment of a union
In preparing for the establishment of an official union, a provisional union standing committee
is appointed by the higher-level union with tenure of maximum 12 months. After this period,
the higher-level union shall assist the provisional union standing committee to organize a
union's congress to elect a new union standing committee. The union needs to register only
with the higher level union, and not with any public authority. However, the union, once
established, will inform the local authority and relevant organizations to set up partnerships
15
(Law on Trade Unions, Art. 1). The local authority has no power to reject or de-register a
union.
However, there is a contradiction between the Law on Trade Unions and the Union Statute in
regulating the proceedings of union establishment. The Law on Trade Unions, Chapter 1, Art.
1 states that: “the union is the socio-political organization voluntarily established by the
working class and Vietnamese workers under the leadership of the VCP”. The foundation of
the union, therefore, must spring from voluntary desire of the workers: “All Vietnamese
workers …. are entitled to forming and joining unions in accordance with the Union Statute”
and “legitimate associations of workers may join federations of labour” (Law on Trade Unions,
Art. 1, paras. 2 and 3).
The 2003 Union Statute, Chapter 3, Art. 14, however, provides that: “a workplace union can
be set up at the workplace (enterprise), industrial, service and craft cooperative, public
services, State agency, political and socio-political organization, professional association
which already have at least 5 union members and the higher-level union has issued a
decision on the formulation of the union”. The foundation of a union, as stipulated by the
Statute, is initiated by the higher-level union, rather than workers at the workplace. The topdown process is once again reiterated in the inter-ministerial Circular 1- 2007 on the
establishment of provisional union at the workplace: "The proceedings of appointing a
provisional union standing committee shall be: the higher level union inform the employer
about the plan for mobilizing workers to join the union; gather the list of union members in the
enterprise who have labour contracts of over 6 months; issue the decision on the appointment
of the provisional union standing committee and the Union Chairman at the enterprise"
(Section 2, clause 2). It can be interpreted, in principle, that a union set up at the workplace
not by the initiation and supervision of the higher-level union would not be recognized as
legally constituted by the latter.
In practice, the application of the top-down principle in union organizing reveals some
noteworthy variations. For example, there have been wild-cat strikes in the South in which
workers demanded the formation of a union, among other requests, to the employers. After
the strike taskforce (which composed of government agencies and VGCL representatives)
settled the dispute, it tried to set up unions at these companies. As explained by a VGCL
informant, these companies had avoided unionization of their workplaces in various ways - for
instance, by refusing to meet with VGCL officials, preventing VGCL officials from meeting with
workers, among others. Only after the pressure exerted by the strikers did these employers
agree to the set up of unions at the company. Even though the workers placed pressure on
employers, they still had to comply with the formal procedure of establishing a union under
the regulations mentioned above.
Union elections
Chapter 2 of the Union Statute stipulates the internal structure of a union at different levels,
which includes the organization and mandate of the union congress and the election and
responsibilities of the union standing committee. The lower-level unions shall elect
representatives to take part in the higher-level union congress. The legitimacy of a union
congress depends on the participation of at least two thirds of the elected representatives.
Members of the union standing committee must be elected by a majority of the union
congress and must be approved by the higher-level union. The union chairman is elected
among the members of the union standing committee by the union congress and with the
permission of the higher-level union. Election of the union standing committee shall be held
twice every 5 years (or at least once every 5 years). The standing committee of a workplace
union shall convene monthly while that of a higher-level union meets once every three months.
The union standing committee operates on the key principles of collective leadership,
individual responsibility and majority-based decision-making (Union Statute, Chapter 2, Arts.
5, 6, 7, 9 and 10).
Union officials
16
5
Articles 18 and 19 of Decree 133 provide that a workplace/enterprise union with over 300
workers is entitled to have one full-time union official. The full-time union official receives a
salary from the union fund as well as benefits, allowances and bonus from the employer like
other workers in the company. When s/he no longer works full-time for the union, s/he shall
be prioritized in job-placement within in the company.
However, according to a VGCL report on union performance in 2004, there were
approximately 7,000 full-time union officials at the workplace level across the country. On
average, there was one full-time official for every 745 workers.
In pursuant to Decree 133-1991, Art. 18, a part-time union official at an enterprise employing
over 150 workers is allowed to dedicate 6 working days per month to union work; while that
for a union official in smaller-sized companies shall be 3 working days per month. Specific
arrangements for work assignment, time, and payment of salary and mission allowance for
the union officials shall be decided by the employer and the union standing committee at the
enterprise level.
Union Finances
The Union Statute (Art. 35, para. 1) and the Law on Trade Union (Art. 16, para. 1) provide for
the following sources of union income:
1. Membership dues: 1 percent of the basic salary but not exceeding 10 percent of the
minimum wage;
2. Contribution from the employer: 2 percent of the wage bill (except for foreign-invested
enterprises/FIEs);
3. Funding from the State budget;
4. Other sources of income: from union services, assets, activities and funding from
national and international organizations.
In a number of companies, particularly FIEs, the union stipulates a flat rate of membership
dues. The income of the workplace union is primarily derived from the first and second
sources listed above. Normally, 10 percent of annual membership dues are transferred to the
higher-level union, though this rate varies in practice.
The union fund at enterprise level is used for the following purposes:
1. Payment of salary for full-time union officials (except for those in the FIEs) 6 and
responsibility allowance for part-time union officials;
2. Union activities;
3. Support for union members and social activities;
4. Awards for outstanding union members and those who have made a remarkable
contribution to the union.
Funding of the higher-level unions relies more on the two last sources. The VGCL also has a
policy to re-allocate financial resources from the wealthier provinces to the needier ones.
However, according to the VGCL performance report for 2000-2004, evasion of membership
due contribution is pervasive in the non-state sector and shortage of funding is identified as
one of the major causes of weaknesses of unions at all levels.7
5
Issued on 20 April 1991, the Decree clarifies certain provisions in the 1990 Law on Trade Unions.
Full-time union officials in FIEs are paid by the higher-level union.
7
VGCL report on the “Review of Member Recruitment and Development of Strong Unions, 2000 –
2004”, VGCL Conference, Hanoi October 2005.
6
17
Part 3:
Legal and Institutional Framework and Practice of Collective
Bargaining
Rights of Bargaining
A. Legal Sources and Relevant Legislative Provisions
Chapter 5 of the 1995 Labour Code provides the regulatory framework for collective
bargaining. It states that a group of workers in a single enterprise represented by a union
shall have the right to propose the initiation of collective bargaining as well as the content of
the collective labour agreement (CLA). Once the proposal for collective bargaining has been
raised, the employer is obliged to start the bargaining process within 20 days after receiving
the proposal (Art. 46, Chapter 5).
Apart from Chapter 5, there are a few other articles in the Labour Code concerning collective
bargaining, including Articles 7 and 8 of Chapter 1 concerning "the obligation of an employee
to comply with the collective agreement of the company" and “the right of the employer to
appoint a representative to negotiate and to sign a collective labour agreement of an
enterprise or of an industry", as well as Article 166 of Chapter 14 on labour dispute settle- "the
obligation to perform the signed collective labour agreement".
Decree 196 (issued on 31 December 1994) provides for specific instructions on the
implementation of collective bargaining regulations in the Labour Code. Regulations of
collective bargaining in Chapter 5 of the 1995 Labour Code apply to workers in unionized
establishments in both state-owned and non-state enterprises. After the revision of the Labour
Code in 2002, Decree 196 was amended by Decree 93 issued on 11 November 2002. The
revised Labour Code extended the collective bargaining right to unions of cooperatives that
employ workers. However, unions in public services, armed forces and public security and
occupation-based unions do not have the right of collective bargaining on behalf of their
members.
The Labour Code, the Law on Trade Unions and the Union Statute confine the right of
workers to collective bargaining in unionised workplaces. Only the workplace/enterprise union
is entitled to exercise the right to collective bargaining and sign the CLA on behalf of workers
in the establishment. Elected workers representatives who are neither members of the formal
union standing committee nor authorized representatives of the union are not allowed to
exercise this right. If they do, the collective agreement shall be regarded as invalid.
B. Duty to Bargain
Both the union and employer have the right to initiate the collective bargaining process. Each
party has the duty to accept the proposal for collective bargaining made by the other party.
Chapter 5, Article 46 of the Labour Code provides that "each party shall have the right to
request the signing of a collective agreement and to propose its terms and conditions. No
later than twenty (20) days after receiving the request, the receiving party must agree to the
negotiation proposal and a commencement date for the negotiation". Either party's refusal of
the other's request for collective bargaining shall be considered a violation of the labour law.
Furthermore, Article 8 of the Labour Code states that: "the employer shall have the
responsibility to cooperate with trade unions in discussing issues related to labour relations
and to improve the material and spiritual life of workers". Decree 196 (Chapter 3, Art. 3, para.
2) also stipulates: "Upon reception of the proposal on collective bargaining, the receiving
party [either the employer or the union] must accept the proposal and actively meet with the
other party to discuss time and venue arrangement, number of participants in the collective
bargaining process".
18
The two parties have to conduct collective bargaining in good faith and mutual respect of
each other's rights and interests. Art. 9 of the Labour Code stipulates the principles for labourmanagement relations which also include collective bargaining: "The labour relationship
between an employee and an employer is established and developed through negotiation and
agreement on the principles of voluntary commitment, fairness, cooperation, mutual respect
of legitimate rights and interests, and full performance of undertakings of both parties".
According to the VGCL, the proportion of enterprises covered by collective labour agreements
in June 2005 was 96 percent in SOEs, 40 percent in the foreign-invested sector and 25
percent in the domestic private sector.
There have been few reported cases of employers refusing proposals for collective bargaining
initiated by the union, and intentionally prolonging the bargaining period. On the other hand, a
number of agreements have been initiated and even drafted by management (via the HR
department). According to the VGCL,8 one of the main reasons for the low rate of CLAs in the
non-state sector is the general weakness and hesitation of workplace unions to initiate
collective bargaining.
Processes of bargaining
C. Definition and Legal Status of Collective Agreement
The definition of a collective agreement is provided in Art. 44 of Chapter 5, Labour Code: “A
collective labour agreement (or ‘a collective agreement’ in short) is an agreement between a
group of workers and the employer on working conditions and labour utilization, rights and
obligations of the two parties in industrial relations. The collective agreement is negotiated
and signed by representatives of the group of workers and the employer based on the
principles of voluntariness, equality and transparency”.
A collective agreement shall be declared partially or wholly void if:
•
•
•
part or all of the agreement violates the law,
the signatory does not have the authority to sign, or
the collective bargaining process does not follow the legal procedure. (Labour Code,
Chapter 5, Art. 48)
Once the collective agreement takes effect, all other labour-related rules of the enterprise
must be adjusted in accordance with the agreement (Art. 49, para.2).
An effective and lawful collective agreement shall apply to all workers in the enterprise,
including workers recruited after the signing date and those who are not union members (Art.
49, para. 1).
If an individual labour contract contains working conditions worse than those in the collective
agreement, the provision in the latter shall be applied instead (Art. 49, para. 2).
See Appendix 7 for a copy of the Official Form of Collective Labour Agreement.
D. Levels of Collective Bargaining
The Labour Code provides for collective bargaining at the enterprise and industry levels: "An
employer shall have the right to appoint representative to negotiate and sign a collective
labour agreement of the enterprise or a collective labour agreement of the industry" (Chapter
1, Art. 8, para. 2). Provisions in Chapter 5 specify the collective bargaining procedures for the
8
VGCL report, 2005
19
union and employer at the enterprise level: “representatives of workers and the employer who
sign the collective agreement shall be the chairperson of the enterprise union or a person
authorized by the union standing committee and the director of the enterprise or a person
authorized by the director” (Art. 45, para. 2).
Article 54 of Chapter 5 extends the scope of collective bargaining to the industry level:
“Provisions in this Chapter [Chapter 5] shall be applied to the bargaining and signing of
industrial collective agreements”. Decree 196 (Chapter 4, Art. 8) provides that: "MOLISA shall
work in collaboration with the VGCL to carry out pilot collective bargaining at industry level
and submit to the Government draft regulations on industry-level collective bargaining". In the
2006 Memorandum of Understanding between the VGCL and VCCI, industry-level collective
bargaining was also included as one of the joint initiatives. In practice, however, collective
bargaining has only been practised at the enterprise level.
An industry-level collective labour agreement is understood by Vietnamese industrial relations
actors as a binding pact for all companies in the industry irrespective of their size, conditions,
and ownership. 9 In other words, the sectoral collective agreement is regarded as a legal
document that must be complied with by all enterprises in the sector. However, the practice of
sectoral bargaining is generally hindered by the weak capacity of employers' and workers’
organizations to represent the majority of employers and workers in the sector.
There is no multi-bargaining practice in Vietnam. In legislation, collective bargaining can be
conducted in unionised enterprises and at industry level. Clause 3, Article 26 of the Union
Statute states that the central sectoral union has the mandate to “develop and sign sectoral
collective agreements”. This mandate, however, is not provided for local sectoral unions
which are under the administration of provincial federations of labour.
Collective bargaining at the enterprise/ workplace level
Collective bargaining at the workplace level is conducted by an enterprise-level union10 and
the employer of the enterprise.
There is no specific legal provision that regulates the relationship between
enterprise/workplace unions and higher-level unions in terms of collective bargaining. One
interesting exception, however, is the relationship between unions of industrial processing
zones and member enterprise/workplace unions. The Union Statute, Art. 23, Clause 2, para.
C provides that the union of industrial processing zones has the responsibility to “guide and
supervise member workplace unions to develop, negotiate and sign collective labour
agreements”. In practice, urging workplace unions to initiate collective bargaining and
providing relevant instructions and advice have always been a major task of IPZ unions.
In the last two years, the alarming increase of wild-cat strikes has given momentum to
collective bargaining at all levels of union organization. The bargaining and signing of
collective agreements have been regarded as a key indicator of union performance. In the
2006 Directive of the VGCL (which stipulates criteria for the ‘Strong workplace union’ Award),
the successful signing of a collective agreement that provides for benefits and working
conditions for workers above the legal standards is considered to be the Number One
criterion in assessing union performance. The number of collective agreements is also a
strong performance indicator for higher-level unions. Therefore, unions at the district,
provincial, and industry levels have become much more active in encouraging and guiding
member workplace unions to initiate and sign collective agreements with their employers. A
number of workplace union leaders have reportedly consulted their higher-level unions about
collective bargaining issues prior to concluding and signing the agreements.
9
Synthesis annual report of VGCL, 2006.
“Self-standing enterprise level union” or “self-whole enterprise union” refers a union which has its own
constitution that governs its election, financial and administrative matters and a legally recognised
mandate to engage in collective bargaining and conclude agreements.
10
20
In the MOU concluded between the VCCI and VGCL in 2006, the former agreed to “cooperate
and facilitate” the “one-million-member campaign” – a membership growth initiative of the
VGCL focusing on the non-state sector, to promote labour-management cooperation at the
workplace level. Nonetheless the VCCI has appeared to be reluctant to explicitly promote
collective bargaining among their members as well as in the business community.
According to some union officials and labour administrators at the local level, business
associations, particularly those of foreign investors, extend considerable influence over the
negotiation and setting of wages and working conditions in general as well as collective
bargaining in member enterprises. It is reported that quite a few foreign employers consult
their associations frequently at different stages of the bargaining process.
The VGCL and the Government have recently started to promote collective bargaining both at
the enterprise and industry level. In the last annual meeting between the leadership of VGCL
and the Prime Minister in early 2007, the union made twelve proposals to the Government,
one of which is to experiment with sectoral collective bargaining in some selected industries.
This proposal has been approved by the Prime Minister who suggested four industries as
starting points: textile and garment, leather and footwear, construction and seafood
processing.11 These labour-intensive industries have actually suffered from more strikes than
any other industries over the last two years.
E. Bargaining unit
There is no legislative provision for establishing or arranging a bargaining unit. Instead, the
bargaining unit is referred to in the Labour Code and relevant decrees as “a collective of
workers in one enterprise” that is represented by the workplace union standing committee or
the provisional union standing committee. Given that the Labour Code allows both enterprise
and industry bargaining, the bargaining unit can be interpreted to cover workers in an
enterprise or workers in an industry who are represented by an official union organization.
However, due to the shortage of a legislative provision on the matter, the parties involved in
the bargaining process enjoy some flexibility in determining the bargaining unit.
There is no legislative provision on the minimum number of union members at an enterprise
for a union to be able to initiate collective bargaining. Yet, Article 1 of Decree 196 limits the
right to collective bargaining to any unionised enterprise employing over 10 workers: “the
scope of collective bargaining regulations in the Labour Code shall be applied to SOEs,
enterprises of all other economic sectors, organizations and individuals that employ ten
workers and more”.
A collective labour agreement shall not include or govern the working conditions of the
following categories of workers:
1. Foreign workers (these workers are governed by separate labour/service contracts
with the employer);
2. Workers not included on the company’s payroll but perform periodic work without
signing labour contracts with the employer (prevalent in textile-garment and footwear
enterprises);
3. Part-time workers who are not included on the company’s payroll (though they may
sign a part-time labour contract or service contract with the company, depending on
the type of work);
4. Service providers for the company on service contracts, not labour contracts;
5. Workers who have signed labour contracts with a third-party (or labour hire) agency
(for instance: security guards, cleaners, drivers, cooks).
11
Minutes of the meeting between the PM and VGCL on 7 March 2007, reported by Lao Dong Daily
online (vol. 53, 8 March 2007), www.laodong.com.vn (Accessed: June 2007).
21
It should also be noted that workers who do not have labour contracts or sign labour contracts
of less than 6 months cannot join the union.12 This type of workers seems to be the largest
13
group of employees excluded from collective agreements. According to the VGCL, the
percentages of employees who have signed labour contracts with employers are: 96 percent
among SOEs, 65 percent in the foreign-invested sector and only 45 percent in the domestic
private sector.
F. Bargaining Agents/Parties to the Collective Agreement
Employees
Article 46 of the Labour Code enables the workplace union to represent all employees in the
enterprise, regardless of their union membership. The Law on Trade Unions (Art. 11, clause 4)
specifically states: "A worker who is not a union member has the right to request the union
standing committee to represent and protect his/her legitimate rights and interests at the
Court, in the relations with the employer, and other relevant organizations". A collective labour
agreement, once signed, shall cover all Vietnamese employees (including non-unionised and
unorganized workers) in the enterprise as long as they have signed labour contracts
(indefinite-term, definite-term or seasonal contracts) with the employer.
However, there is no special provision for workers (including union members) at a nonunionised enterprise to initiate a collective agreement for the enterprise or become party to
one as such. As the Law on Trade Unions (Article 2, clause 1) provides that "the union
represent and protect the legitimate rights and interests of workers", the union’s role can be
interpreted to cover workers who are not union members. Therefore, it would not be unlawful
for a higher-level (regional or sectoral) union to represent non-unionised enterprises in
negotiating and signing sectoral collective labour agreement.
In terms of delegation, the Labour Code, Chapter 5, Art. 45, clause 2 provides that: "the
representative who signs the collective agreement for the labour collective must be the
chairperson of the standing committee of the union of the enterprise or a person authorized in
writing by the standing committee".
Employers
On the management side, Article 8 of the Labour Code provides that "an employer shall have
the right to appoint a representative to negotiate and sign a collective labour agreement of the
enterprise or a collective labour agreement of an industry group". An employer is defined by
Art. 6 of the Labour Code as "an enterprise, organization, agency or individual who is at least
eighteen years of age employing and using labour and paying compensation for labour". The
employer also needs to be employing at least ten workers in order to be covered by the
collective bargaining regulations (Decree 196, Art. 1, clause 1).
However, there is no legal provision that clearly states the bargaining agents at the industry
level. As stated in Art. 8, an individual employer can appoint a representative to participate in
the collective bargaining process at the industry level but it is not clear how employers and
employers' organizations in the industry should coordinate to take part in the bargaining
process.
In pursuant to the Labour Code Chapter 5, Art. 45, the negotiating representative of the
employer shall be "the director of the enterprise or a person authorized in accordance with the
enterprise charter or delegated in writing by the director". The representative who signs the
collective agreement for the employer shall be "the enterprise director or a person authorized
in writing by him/her".
12
13
Directive 02/2004/TTR-TLD issued by the VGCL on 22 March 2004.
VGCL Synthesis Report, 2005.
22
In practice, the HR manager or a senior employee of the HR department is normally
authorized to negotiate the collective agreement with the union. The final agreement is either
signed by the enterprise director or the HR manager on behalf of the employer.
Multiple bargaining agents at a given bargaining unit
Indirect forms of employment relations, such as labour hire arrangements, have recently
emerged in Vietnam. It is most popular in the service sector, in areas such as security
services, cleaning, cooking, and maintenance. Labour hire companies or agencies provide
individual workers to a client or host on the basis of a service contract. The labour hire
company is ultimately the direct employer of these workers, responsible for signing labour
contracts and negotiating their remuneration. Workers may work on a regular, full-time basis
for the client, or only provide services when needed. The client pays the labour hire company
which in turn pays the workers after subtracting various fees and expenses.
Due to the high turnover rate and prevalence of labour contracts with duration of less than 6
months, the unionization rate among labour hire companies is extremely low. Therefore, only
a few labour hire companies in Vietnam have signed collective agreements with their workers.
There are no instances of clients becoming a party to collective agreements of labour supply
companies, and none have signed collective agreements with labour hire workers.
Role of national-level organizations
The VGCL and the two employers’ organizations at the national level have made few direct
interventions in lower-level negotiations on wage and working conditions, especially at the
workplace level. The most important way for these national organizations to have an influence
on wages and working conditions at the enterprise level is through their participation in policy
and law making processes by state agencies, particularly MOLISA. As it is obligatory for the
labour administration to consult the VGCL, VCCI and VCA on any labour-related policy or
legislation, the latter partners are becoming more serious in seizing this opportunity.
The VGCL would organize rounds of consultation with their member federations and selected
workplace unions in all regions of the country before discussing a particular policy issue at the
central VGCL. The synthesis of opinions from the overall union structure would be compiled
and sent to MOLISA. When MOLISA submits the draft legislation to the National Assembly
(Vietnamese Congress), the VGCL would have another chance to present its views (on the
basis of its members’ interests) to members of the Assembly before they decide to pass the
law or not. Several proposals of the VGCL have been incorporated in the Labour Code and its
subsequent revisions, such as the provision on a higher minimum wage for the foreigninvested sector,14 a strict limit on overtime hours and more recently, the right of workers to go
on strike in the case of rights-based disputes.
As stated by the Union Statute, it is the duty of higher-level unions, particularly those in
Industrial Processing Zones and the private sector, to urge and advise subordinate workplace
unions to propose collective bargaining with the employers. The collective bargaining
process, however, must be initiated by the workplace unions, not by the higher-level unions.
Unfortunately, as reported by VGCL, the workplace unions remain hesitant in proposing
collective bargaining, due to fear of employers’ retaliation, a lack of confidence in bargaining
skills and power and/or simply ignorance of CLAs. Moreover, the signing of a CLA is often not
included in a union’s initial organizing process. According to some union officials, securing
management’s agreement to have a union set up is often difficult enough, particularly in the
non-public sector, let alone the negotiation of a CLA.
The VCCI and VCA adopt a similar procedure for consulting members in relation to draft
policies and laws of the government. So far, the VCCI has been significantly more active than
VCA in voicing their members’ interests. However, the VCCI’s representation capacity and
14
In early 2006, after an unprecedented wave of strikes in the South, the VGCL successfully pressured
the government to increase the minimum wages for workers in the FDI sector by 30 percent (Decree 03
issued on 11 January 2006).
23
influence have been limited by its modest network and membership. In reality, business
associations and associations of foreign investors have proved to be quite influential in
determining salaries and working conditions. The textile and footwear associations have
successfully lobbied the government to extend the limit on overtime hours from 200 to 300
hours/year in special cases, for example, when companies are faced with financial difficulties
or urgent orders (2002 Revision of the Labour Code, Chapter 7, Art. 69).
G. Scope of Collective Bargaining / Content of a Collective Labour
Agreement
The Labour Code, Chapter 5, Art. 46, stipulates that “the core content of a collective labour
agreement includes: undertakings of the parties in respect of employment and guarantee of
employment; working hours and rest breaks; salaries, bonuses, and allowances; the number
of employees; labour protection, occupational safety and hygiene; and social insurance for
workers”. Clause 2, Art. 2 of Decree 196 adds- “Apart from the above issues, the two parties
can include other provisions including labour dispute settlement procedure, between-shift
meals, collective welfare, support in case of weddings and funerals”.
Labour Code Art. 50 states: “the duration of a collective labour agreement is of one to three
years. For the first collective agreement of an enterprise, its duration may be less than one
year”.
Decree 196, Art. 3 states: “All collective labour agreements must be drafted in a common,
official format. The format of collective agreement is designed and promulgated by the labour
administration.”
In Vietnam, there is no legal distinction between a “collective labour agreement” and “wage
agreement” as wages and salaries have been included as one of the major contents of a
collective agreement (Labour Code, Art. 46). In practice, the wage and salary provision in a
majority of agreements rarely contains specific rates of payment or average annual increase.
Often, collective agreements lay out the principles of remuneration (for example: salaries
should base on seniority and/or performance), the commitment to paying higher than the
minimum level and agreement to review wages and salaries every year.
There are several reasons for employers’ reluctance to include specific wage rates in the
collective agreement: first, a collective agreement is binding on both parties and more
importantly, it must be registered with the local labour administration, which may limit the
flexibility of the employer in adjusting salaries in accordance with business performance.
Second, the Labour Code and other relevant legislation do not make it obligatory for
employers and unions to include benefits that are above the legal standards or specify wage
and benefit levels in the collective agreement. Labour Code Chapter 5, Art. 44, clause 2, para.
2 merely states: “The State encourages the parties to sign a collective agreement which
provide employees with more favourable conditions than those stipulated in the labour
legislation”.
It is roughly estimated by MOLISA15 that over 90 percent of registered collective agreements
simply replicate existing legal standards. As a result, a CLA can become no more than a
formality which yields no practical benefits for workers and/or employers. The major
differences between collective agreements and the law are found in the provision of marginal
welfare benefits such as organization of tours during holidays, Tet bonus, sporting and
cultural activities. Recently, more workplace unions have been able to negotiate for better
payments during company shut-down time (the law currently provides for payment of 70
percent of basic salary during shut-down time), improvement of meal quality, contribution of
foreign employers to the union fund and annual review of wages and salaries among others.
15
Report by the Legal Affairs Department, MOLISA at the Workshop on Resolutions for Labour Disputes
and Strikes in Vietnam, 2005.
24
In accordance with Decree 114-2002 of the Government and Circular 12-2003 issued by
MOLISA, the employer is required to register the company’s pay scales at the local labour
administration and consult the union about the design of the pay scales and other changes
relating to remuneration. The law, however, provides no obligatory ground for wage
negotiations between the two parties. In other words, the employer can still be the only
decision-maker in terms of wages and salaries for workers.
Wage negotiations, however, have been informally carried out in practice, not by unions but
by strikers. Every year, there are over 100 strikes, all wild-cat strikes, in Vietnam. There was
an impressive surge of strikes from late 2006 to first quarter of 2007 (over 100 strikes in the
first quarter of 2007), a vast majority of which were relating to wages and salaries. There were
various reasons why the strikes occurred, including:
•
•
•
Workers were no longer satisfied with the current wages and working conditions;
Workers disagreed with the rate of wage increase set by the employer; and
Workers demanded that employers kept their promise of raising wages.
All of these reasons reflect various dimensions of wage negotiations between workers and
employers. Although this type of ‘wage negotiation’ does not follow the legal procedure of
conducting a strike or collective bargaining, it has been tolerated by government authorities.
H. Procedural requirements for concluding a collective agreement
The process for concluding a collective agreement is provided for by Chapter 5 of the Labour
Code. It is further elaborated in Decree 196 and Decree 93. According to these legislative
provisions, the procedures for concluding a collective agreement are:
1. After collective bargaining is initiated by one party, the other party has to accept the
request and meet with the initiator to arrange for the time, venue and number of
participants involved in the negotiation. The employer has to provide all the
necessary facilities for the negotiation;
2. Each party shall work out their own proposals as the basis of the negotiation. The
union/provisional union drafts the proposal for workers;
3. At the end of the negotiation, the union needs to seek workers’ approval for the draft
collective agreement. The agreement is only approved when over 50 percent of
workers vote in favour of it (voting is carried out by secret ballot or signature
collection). The outcome of the vote must be recorded in detail;
4. Two parties sign the collective agreement and make 4 copies: one for management,
one for the union, one sent to the higher-level union and one submitted to the local
labour administration for registration. The registration file must also include the record
of the voting outcome which is signed by the union standing committee
representative;
5. The labour administration either approves the agreement or requires the two parties
to adjust any unlawful provision/s in the agreement;
6. After the agreement is registered and become effective, the employer has to make it
known to all employees.
The approval process on the employer’s side is regulated by the company’s management
rules; but normally it also requires over 50 percent of members of management to approve
the agreement.
There are three key conditions that must be satisfied for a collective agreement to be
registered (Labour Code, Art. 48):
1. All of the provisions in the agreement must comply with the law;
2. The signatories have the legal mandate to sign the agreement; and
3. The conclusion of the agreement follows the legal procedure.
25
The agreement must be drafted in the prescribed format when it is registered. It is common
that a formal request for registration of collective agreement which is drafted by the employer
also be included in the registration profile, even though there is no legal requirement for it. In
some provinces, the labour administration issues a template request for local enterprises.
The labour administration responsible for the registration of collective agreements has the
power to declare an agreement partially or wholly void if part or all of the agreement
contravenes any laws. The agreement is also declared totally invalid if the signatories do not
have legal mandate to sign the agreement or the conclusion of the agreement does not follow
the legal procedure (Labour Code, Art. 48). If the labour administration finds that the
agreement is void or invalid for one of the reasons mentioned above but certain provisions
provide greater benefits for workers, the labour administration shall allow the parties to revise
the unacceptable aspects of the agreement within ten (10) days. If the parties fail to revise the
agreement within the given timeframe, the agreement is then declared void.
I. Failure to conclude an agreement
There is no restriction on the timeframe in which the negotiation between parties must
conclude. The absence of such a legal provision has been used by a number of employers as
an excuse for the failure to sign collective agreements.
There is no specific legal provision on the options that are available to parties in the case of a
deadlock during the negotiation process. However, according to the definition of ‘interestbased collective labour dispute’ provided in the 2006 revision of Labour Code (Chapter 14 on
Labour Dispute Settlement, Art. 157, clause 3): “interest-based collective labour dispute is a
dispute that has emerged from negotiation between the two parties over demands of
workers for setting new working conditions [our emphasis] other than those stipulated by
the labour legislation, collective agreements, work rules that have been registered with
competent authority or other legal regulations and agreements in the enterprise”. The term
‘new working conditions’ is defined as “the revisions of and supplementation to collective
agreements, wages, bonus, income, work norm, working hours, rest breaks and other welfare
in the enterprise” (Chapter 14, Art. 157, clause 5). In the case of an interest-based collective
dispute, workers have the right to go on strike when all available dispute settlement options
have been exhausted.
These regulations lead to the interpretation that when two parties have reached a deadlock in
the negotiation of a new, renewed or amended collective agreement, they can invite a third
party (such as a conciliator or the arbitration council) to help and facilitate the process. If they
are still unable to reach agreement, workers can resort to taking industrial action.
In practice, however, there has been no reported case of strikes due to deadlocks in collective
bargaining.
J. Modification and/or termination of an agreement
Chapter 5, Article 50 of the Labour Code states that: “Each party shall have the right to
request the amendment of, or addition to the collective agreement within three months from
the date of signing in respect of an agreement with duration of less than a year, or six months
in respect of a one-to-three-year agreement. The procedure for the amendment of or addition
to a collective agreement shall be in accordance with the procedure for concluding the
agreement”.
Chapter 5, Article 51 further provides that: “Prior to the expiry of a collective agreement, both
parties may negotiate the extension of the duration of the existing collective agreement or
enter into a new agreement. Where the collective agreement expires during the negotiation
process, it shall continue to be effective and binding. If the negotiation between the two
parties is still inconclusive three months after the expiry date of the agreement, the old
agreement shall be deemed expired and invalid”.
26
In practice, collective agreements also contain provisions relating to the date of commencing
re-negotiation (for the renewed agreement), the time allowed for the re-negotiation (for
renewal and/or revision of an existing agreement), and when and how an agreement should
be terminated. With regards to the extension of a collective agreement,
If an enterprise is merged with another, and the labour force of the former enterprise accounts
for over 50 percent of the new merged enterprise, then the existing collective agreement of
the former enterprise shall continue to apply until its expiry date or until a new agreement is
signed (Decree 93, Art. 5). In cases of a merger, transfer or sale of business, if the above
condition is not met, the existing collective agreement becomes ineffective and the employer
and union of the new enterprise must start the negotiation of a new agreement within 6
months.
K. Enforcement
In pursuant to the Labour Code, Chapter 5, Art. 49, “all members of the enterprise [that has
concluded a collective labour agreement] including those recruited after the date of signing of
the collective agreement have the responsibility to comply fully with the agreement” and “all
labour regulations in the enterprise must be revised in line with the collective agreement”.
There is no distinction in terms of settlement procedures between a dispute that arises from
an issue in the collective agreement and one that arises from an issue beyond the agreement.
The distinction is only made between a dispute over a provision in law, labour contract,
collective agreement, or any other binding agreements between two parties (known as a
‘right-based dispute’) and a dispute on an issue not covered by or included in the law and/or
legally binding documents (known as a ‘interest-based dispute’). The dispute settlement
procedures for each type of dispute are defined by the 2006 revision of Chapter 14 of the
Labour Code.
A labour dispute that rises from the breach of a collective agreement is defined by the 2006
Revision of Labour Code Chapter 14 as a ‘rights-based collective labour dispute’. In such a
case, “where a party fails to perform fully or breaches the provisions of the collective
agreement, the other party has the right to request full compliance with the agreement and
the two parties must work together to address the problem. If they fail, each party has the
right to request for resolution of collective labour dispute in accordance with the legal
procedure”.
There are three steps in the procedure of settling a rights-based dispute:
(i) Mediation by either the enterprise conciliation council or labour mediator;
(ii) Mediation by the Chairman of the district people’s committee; and lastly
iii) The two parties can either bring the case to Court or resort to industrial action.
However, there is generally no specific provision on the resolution of disputes over the
interpretation of a collective agreement. It is, therefore, assumed that disputes over the
interpretation of the agreement go through the same resolution process as other types of
disputes.
There is no regulation on a mandatory peace clause for the life of the collective agreement.
In practice, few disputes have ever emerged from issues in the collective agreement, since
the contents of agreements mostly contain existing legal standards or principles rather than
specific provisions on wages, benefits and working conditions.
L. Extension of a collective agreement
27
Collective bargaining has been carried out at enterprise level only with the participation of the
enterprise director and the workplace union. The coverage of an enterprise collective
agreement, therefore, shall include all workers, union members and non-union members alike,
in the establishment. There is no legal provision on extension of either an enterprise collective
agreement or an industry-level agreement.
One practical exception is the collective labour agreement of Vinaconnex – a state-owned
general corporation with a group of construction companies. The collective agreement
between management and the general corporation union primarily covered employees at the
headquarter office. However, several selected provisions of the agreement, such as the
minimum salary level, working hours and overtime hours, applied to all other subsidiary
companies within the group. It should be mentioned that the union of a subsidiary company in
this situation is a self-contained workplace union, and the union of the general corporation
represents the higher-level union of all subsidiary unions.
M. Coverage and Significance of Collective Agreements
According to the General Statistics Office (GSO), there were 72,000 enterprises employing
over 5 million workers working in 2003.
Table 3.1 Number of Enterprises by size of labour force and ownership
Year
2002
2003
Statistics on Enterprises
Number
Percentage
State-owned Enterprises
5,364
- Large (>300)
1,733
1,700
- Medium (51-300)
2,626
2,346
953
767
52
32
- Small (10-50)
- Extra small (<10)
Private Enterprises
- Large (>300)
55,236
8.53%
Number
87.80%
4,845
64,526
836
1,003
5,273
6,459
- Small (10-50)
19,130
23,725
- Extra small (<10)
29,997
33,339
- Medium (51-300)
Foreign-invested Enterprises
2,308
3.67%
2,641
- Large (>300)
508
6,22
- Medium (51-300)
996
1,133
- Small (10-50)
635
728
- Extra small (<10)
169
158
Total for the whole country
Percentage
6.73%
89.60%
3.67%
62,908
100%
72,012
100%
- Large (>300)
3,077
4.89%
3,325
4.62%
- Medium (51-300)
8,895
14.14%
9,938
13.80%
- Small (10-50)
20,718
32.93%
25,220
35.02%
- Extra small (<10)
30,218
48.04%
33,529
46.56%
Number
Percentage
Labour in Enterprises
Number
Percentage
28
State-owned Enterprise
2,260,306
48.53%
2,264,942
43.77%
Private Enterprise
1,706,409
36.64%
2,049,891
39.61%
691,088
14.84%
860,259
16.62%
4,657,803
100%
5,175,092
100%
FDI Enterprise
Total for the whole country
The coverage of collective agreements in the three major economic sectors, as estimated by
the VGCL in 2006, is shown in Table 3.2 below.
Table 3.2 Percentage of enterprises covered by collective agreements by ownership
Ownership
State-owned
Foreign-invested
Domestic private
Percentage
96 %
40 %
25 %
Source: Department of Economic Policy, VGCL
The total number of enterprises eligible for collective bargaining in Vietnam is now
approximately 42,000. Among these enterprises, around 13,000 to 14,000 companies (or
around 30-34%) have concluded collective labour agreements.
The number of workers eligible for engaging in collective bargaining is around 5 million
people. The number of workers covered by existing collective labour agreements is currently
around 2.9 to 3.0 million, which represents 50-60% of the total eligible labour.
Table 3.3 Coverage of Collective Labour Agreements (eligible enterprises and workers)
Number
Total number of
enterprises
72,012
Enterprises
eligible for CB
42,000
Enterprises with
signed CLAs
14,000
Workers covered
by CLAs
3,000,000
%
100
58.3
33.3 (of eligible
enterprises)
60 (of eligible
workers)
Source: based on VGCL statistics in 2006 and calculations of the research team.
It is estimated that each year, from three to five thousand new collective agreements are
registered, as shown by Table 3.4 below.
Table 3.4 Number of collective agreements registered every year from 2002 to 2005
Unit: 1,000 enterprises
Year
2002
2003
2004
2005
Number of collective
3.7
4.3
4.7
5.0
agreements registered
Source: Department of Employment and Labour Policy, MOLISA
N. Collective bargaining in public sector
The public sector in Vietnam is divided into two sections:
29
1. Public service agencies: governmental agencies, national assembly agencies, Party
bodies and organizations and socio-political organizations sponsored by the State,
which are fully financed by the State budget. This section of the public sector employs
over 1 million workers.
2. State-owned enterprises: electricity, water service, transportation corporations, and
public health care and education institutions, which have their own revenue streams
and enjoy certain financial autonomy while still receiving some funding from the State.
Workers of public service agencies are not entitled to collective bargaining (Decree 196-1994)
and their salaries and working conditions depend on the State budget and fixed regulations.
However, public service workers still enjoy the right to union membership (Law on Trade
Unions, 1990). On the other hand, workers in state-owned enterprise are entitled to the same
rights to union membership and collective bargaining as those in the private sector.
Although MOLISA provides a sample pay scale for SOEs, it is not obligatory for the latter to
follow the sample. Their pay scales must be registered at the local labour administration. A
major difference between SOEs and non-state enterprises is the union's role at the workplace.
In SOEs, the union is considered to be part of the management structure; while in the latter,
the union represents workers in negotiations with management. As a result, the process of
bargaining and negotiation of collective labour agreements in SOEs generally differs from the
usual process found in other types of enterprises. Instead of direct bargaining with the
employer, the SOE union would draft a collective agreement and seek workers' approval at
the annual workers' congress. The agreement would be signed immediately after approval is
obtained and registered at the local labour administration.
The quality of collective agreements in SOEs varies. While many agreements are simply
replicated statements of existing legal standards and principles, quite a few others stipulate
specific working conditions and remuneration for workers which go beyond the legal
standards.
O. Other mechanisms of representation
A breakthrough in the 2006 Revision of Chapter 14 of the Labour Code was the provision on
the election of workers’ representatives in non-unionised enterprises. The legal mandate and
authority of these workers’ representatives, however, are strictly confined to the organization
and settlement of strikes. There is no provision in the law that allows this ad hoc mechanism
to continue after a strike has been resolved or in situations other than a strike: “a strike must
be organized and led by the union standing committee or provisional union standing
committee. For non-unionised enterprises, a strike must be organized and led by
representatives nominated by workers and the nominations must be informed to the district
federation of labour or a union at a similar level”.
Since 1995, there have been over 1,000 strikes in Vietnam, 100 percent of which were wildcat strikes that were not organized by VGCL unions and did not follow the strike procedures
prescribed in the Labour Code. One of the explanations for this problem is the low union
density in the non-state sector (around 30 percent). However, it is undeniable that the strikes
were well-organized even though the enterprise unions were not involved (for example, see
Appendix 8 for the case of a strike in a Japanese electronics company). This highlights the
fact that the organizers of wild-cat strikes or informal union leaders have substantial influence
over workers. Therefore, the provision on the nomination of workers’ representatives in nonunionised enterprise is an attempt to:
(i) Provide a temporary alternative of workers’ representation where unions have not
been set up, and
(ii) Incorporate the strength and momentum of informal union leaders into the official
system so as to resolve labour disputes.
Workers’ congress is the annual event of public service agencies and SOEs, jointly
organized by management and the union. When an SOE is privatized, workers’ congress is
30
no longer an obligatory activity of the enterprise and the union is responsible for organizing
the annual union’s congress only.
Corporate Social Responsibility is a new concept imported into Vietnam in 2001. The
concept widely affects the export-oriented sector which has to comply with labour and
environmental Codes of Conduct (CoC) of international buyers. The two most popular types
of voluntary CoCs in Vietnam now include:
(i) CoCs designed by a multinational company, such as Nike and Adidas, and applied in
its local supply chain;
(ii) CoCs designed by independent organizations, for instance: SA8000, WRAP, but
applied in local enterprises at the request of an international buyer.
The major provisions of labour CoCs evolve around core labour standards, including the
prohibition on forced labour and child labour, non-discrimination, freedom of association and
bargaining, fair remuneration, improvement of working conditions, work safety and social
insurance. Almost all of these core standards, CoCs require the establishment to improve
working conditions above the legal standards.
However, due to the high costs involved in the application and certification of CoCs, only
larger-sized enterprises can afford to adopt these voluntary regulations.
31
Part 4:
Trends, Issues and Debates: Social partners’ and Political
Actors’ Views and Proposals for Future development of
national Bargaining Systems
After twelve years' of implementation of the Labour Code, collective bargaining has yet to fully
develop into a mechanism for joint determination of terms and conditions of work in most
workplaces. Even though it is still a limited means to effectively determine wages above the
legal minima, it is encouraging to see that more collective agreements have included
provisions that are higher than existing legal standards, such as provisions on a Tet bonus,
an experience allowance (allowance for each year of working experience), payment during
shut-down time and unexpected company closure, overtime hours and overtime payment.
The alarming surge of wild-cat strikes in the last two years, especially the two waves of strikes
during Tet of 2006 and the first quarter of 2007, has shock the union and labour
administration and drawn the Government’s and Party’s attention to the problem. After
several ‘trial-and-error’ attempts, including the revision of the dispute settlement procedure in
the Chapter 14 of the Labour Code, one of the key solutions has been identified by all
relevant partners to be the promotion, extension and improvement of collective bargaining
and collective labour agreement at the enterprise and industry levels.
On 7 March 2007, in the annual meeting between the Prime Minister and the VGCL, one of
the twelve proposals of the VGCL to the government was to carry out a trial with sectoral
collective bargaining. Upon this proposal, the Prime Minister has officially assigned MOLISA
and VGCL to carry out such an experiment. This official endorsement led to the 2007
MOLISA-VGCL Cooperation Work Plan, in which the two parties agree to raise the
percentage of enterprises covered by collective agreements to 60 percent (the current rate is
40 percent in the FDI sector and 25 percent in the domestic private sector) and experiment
with sectoral collective bargaining. The MOLISA and VGCL also agreed to the establishment
of a national tripartite labour relations council. The national tripartite body is expected to
advise the government on labour relations policies and produce guidelines for bipartite
negotiations, particularly wage negotiations, at different levels.
In fact, MOLISA is taking the pioneering role in promoting and improving collective bargaining.
One of the key lessons learnt from the wave of strikes in 2006 was that when workplace
unions are too weak to negotiate for wages and working conditions, the workers and the
VGCL tend to put pressure on the government to increase minimum wages. As a result, the
minimum wages for the foreign-invested sector were increased by 30 percent after the strikes
in 2006. However, as the experiences of other countries prove, this approach cannot offer a
long-term sustainable solution. Upon this recognition, MOLISA is striving to promote wage
negotiation through collective bargaining at the workplace level by working closely with the
VGCL and VCCI, as well as learning from international experiences in collective bargaining.16
While the formal mechanism of collective bargaining has not been able to bring realistic
benefits to all parties, in practice, the so-called ‘wildcat strike’ appears to be an alternative
mechanism in the absence of capable enterprise unions. Therefore, it is useful to closely
examine the nature of such strikes in Vietnam.
Recently, there have been significant changes in the nature of strikes and demands of strikers.
Previously, a majority of strikes were described as emerging from employers’ violations of
workers’ legal rights, such as paying less than the minimum wage, evading social security
obligations, exceeding the limit of overtime hours, among others. According to ILO,17 only one
third of strikes that occurred prior to 2006 arose on the basis of interests or demands for
working conditions that are higher than the legal standards. In the first quarter of 2007, as
16
In early 2007, MOLISA approved the second phase of the ILO project on industrial relations. One of
the major components of the project is to initiate a campaign on real collective bargaining and collective
agreements.
17
Chang Hee Lee, Strike and Industrial Relations in Vietnam, 2004.
32
18
recorded by MOLISA, 80.7 percent of strikes in the country emerged from interest-based
demands. The most common demands of strikers were:
(i)
(ii)
(iii)
(iv)
(v)
Increasing wages and salaries;
Increasing bonuses;
Improving meals between shifts;
Reducing overtime hours; and
Paying an allowance for workers exposed to dangerous, toxic conditions.
With the support of the ad hoc strike taskforce, most strikes have been resolved by satisfying
a part of or all of the workers’ demands. The successful rate of strikers is estimated to be as
high as over 90 percent. Clearly, wild-cat strikes remain the fastest and most effective way for
workers to improve their wages and working conditions, though it poses a great challenge to
the official industrial relations system in the country.
Collection of data on collective bargaining
The labour market information system of Vietnam remains fragmented and incomplete.
Collection of information and data, therefore, has long been a headache for policy-makers
and researchers in Vietnam. The data on collective agreements is now maintained by both
MOLISA (Department of Employment and Labour) and VGCL (Department of Economic
Policy) through their own channels of collection (through the DOLISAs and federations of
labour respectively). However, these data are not published and available to the public. They
are often included in annual reports of the two agencies and circulated internally only.
Useful information about industrial relations actors in Vietnam can be found at:
•
•
•
•
•
VGCL: www.congdoanvn.org.vn; www.laodong.com.vn; www.nld.com.vn
VCCI: www.vcci.org.vn
VCA: www.vca.org.vn
MOLISA: www.molisa.gov.vn
General Statistics Office: www.gso.gov.vn
See Appendix 9 for some basic labour data in Vietnam.
18
Report by MOLISA to the Prime Minister on Strikes and Strike Settlement in the first quarter of 2007,
March 2007.
33
References
Legislation and other legal sources:
1. 1994 Labour Code; Amendment to the Labour Code – 2002; Amendment to Labour Code
Chapter 14 – 2006.
2. English translation of the Labour Code. Phillips Fox Law Firm, 1994.
3. Law on Trade Union, issued on 30 June 1990.
4. Union Statute 2003.
5. Statute of the VCCI 2003.
6. Statute of the VCA 2005.
7. Decree 29 issued on 31 March 2003 on “Functions, Mandate, Organization of MOLISA”.
8. Decree 196/CP issued on 31 September 1994 on “Instructions on the implementation of
several articles in the Labour Code relating to collective bargaining”.
9. Decree 93/ND-CP issued on 11 November 2002. Amendment to Decree 196-1994.
10. Decree 145 issued on 14 July 2004 on “Instructions on the consultation of the VGCL and
employers' representative organizations by State administration regarding labour relationsrelated policies, laws, and issues”.
11. Decree 133 issued on 20 April 1991 on “Instructions on the implementation of the Law on
Trade Union”.
12. VGCL Directive 01 issued on 27 October 2006 on “Instructions on the development of
strong workplace and occupation-based unions”.
13. VGCL Directive 02 issued on 22 March 2004 on “Instructions on the implementation of the
Union Statute”.
14. 1992 Constitution of Vietnam.
Reports and Publications:
1. MOLISA, Report to the Prime Minister on Strikes and Strike Settlement in the first quarter
of 2007, March 2007.
2. VGCL, Report at the Union Conference to Review the Union’s Performance, Vietnam,
October 2005.
3. Minutes of the meeting between the PM and VGCL on 7 March 2007, reported by Lao
Dong Daily online (Vol. 53, 8 March 2007): www.laodong.com.vn
4. Legal Affairs Department, MOLISA, Report at the Workshop on Resolutions for labour
disputes and strikes in Vietnam, Vietnam, 2005.
5. VGCL, Synthesis annual report of VGCL, Vietnam, 2006.
6. Lee, Chang Hee, Strike and Industrial Relations in Vietnam, ILO Hanoi, 2004.
34
APPENDICES
Appendix 1: Organizational Structure of MOLISA
Minister and Vice Ministers
Technical Departments
Labour and Employment
Policies
Wage and Salary
64 Provincial DoLISAs
Social Assistance
Division
Vocational Training
Division
Social Insurance
Social Assistance
Legal Affairs
Labour Policy Division
Provincial Labour
Inspectorate
International Cooperation
Planning and Finance
Division for War
Veterans and National
Devotees
Personnel and Organization
Work Safety Division
Bureau for Administration
of Overseas Workers
Bureau for Work Safety
Bureau for Wounded and
fallen soldiers, national
devotees
General Department of
Vocational Training
Labour Inspectorate
Administration,
Planning Division
District-level Office for Labour,
Invalids and Social affairs
(600 offices in total)
Commune-level cadres in
charge of labour and
social affairs (working at
the communal people's
committee)
Ministry's Office
35
Appendix 2: Organization chart of ILSA
Minister of MOLISA
ILSA Director and
Deputy Directors
Planning and
Administration
Division
Public
Relations
Division
Environment
and working
conditions
Division
Industrial
Relations
Division
Social
Assistance
Policy
Division
PopulationLabourEmployment
Division
Branch Office
in HCM city
36
Appendix 3: VCA Organizational chart
VIETNAM ECONOMICS AND
COOPERATION NEWSPAPER
NATIONAL DELEGATE
CONGRESS
BUSINESS AND PRODUCTS
MAGAZINE
INSECTION
COMMITTEE OF
CENTRAL
EXECUTIVE
COMMITTEE
INSPECTION
COMMITTEE OF THE
PROVINCIAL UNION
UNION OF COOPERATIVES IN 64
PROVINCES AND CITIES
COOPERATIVE AND SME OFFICER
TRAINING SCHOOL
STANDING
COMMITTEE
SCIENCE, TECHNOLOGY AND
ENVIRONMENT CENTER
RECEPTION
CENTRE FOR SOCIO-ECONOMIC
PROGRAMS
MANAGEMENT AND TECHNOLOGY
TECHNICAL SECONDARY SCHOOL
TRADE AND INVESTMENT
DEVELOPMENT CENTRE
INVETSMENT PROJECT
MANAGEMENT DEPARTMENT
ENTERPRISE MANAGEMENT
DEPARTMENT
STANDING OFFICE OF
COMPETITION AND REWARDING
INTERNATIONAL RELATION
DEPARMENT
PERSONNEL DEPARTMENT
PROPAGANDA AND
INFORMATION DEPARTMENT
ASSISTANCE PLANNING
DEPARTMENT
COOPERATIVE POLICY AND
DEVELOPEMTN DEPARMENT
INSPECTION DEPARTMENT
OFFICE
COOPERATIVES, COLLECTIVE GROUPS, COOPERATIVE UNION AND
OTHER MEMBERS
ENTERPRISE SERVICES AND
SUPPORTING CENTRE
THANH DAT LAW
CONSULTING COMPANY
INVETSMENT, CONSTRUCTION AND
SERVICES CONSULTING COMPANY
INSTITUTE FOR COOPERATIVE
ECONOMY AND TYPES
INTERNATIONAL RELATION
DEVELOPMENT CENTRE
steering and guiding relation
collaborative relation
37
Appendix 4: VCCI Organizational chart
CONGRESS
BOARD of
DIRECTORS
INSPECTION
COMMITTEE
STANDING
COMMITTEE
COMITTEES OF MANAGEMENT BOARD
1. Committee for Labour Relation
2. Council for Businesswomen
3. Committee for Vietnam-EU, Eastern Europe
and Russia Enterprises
4. Committee for Vietnam-America Enterprises
5. Committee for Vietnam-Japan and North
Eastern Asia Enterprises
6. Committee for Vietnam-ASEAN, Southern Asia
and Africa Enterprises
7. Committee for Vietnam-China, New Zealand
and Australia Enterprises
TECHNICAL CENTERS AND
DEPARTMENTS
1. International Relation
Department
Exhibition and Festival
Centre
2. Membership and Training
Department
3. Employer's Office
4. Legal and Arbitrator
Department
5. Finance Department
6. Personnel Department
7. SME Assistance Centre
8. Office
1.
2.
3.
4.
5.
6.
7.
OTHER ORGANIZATIONS
1. Centre for Vietnam International Arbitrator
2. Mutual Loss Allocation Department
BRANCHES AND
REPRESENTATIVE
OFFICES
Branch in Ho Chi Minh
Branch in Da Nang
Representative Office in
Khanh Hoa (under Da
Nang Branch)
Branch in Hai Phong
Branch in Can Tho
Branch in Vung Tau
Representative Office in
Vinh City
Representative Office in
Thanh Hoa
SUB-UNITS
1. Trade and Services
Company (TSC)
2. Technical Services and
Import-Export Company
(TECHSIMEX)
3. Industrial Property Rights
and Technical Transfer
Consulting Company
(P&TB)
4. International Trade and
Investment Company
5. Information Development
Company
6. VCCI Exhibition
Organizing Company
7. College for Enterprise
Management Staff
8. Business Forum
Newspaper
9. Vietnam Business Forum
Magazine
10. Economic Information
Centre (BIZIC)
11. Institute for Enterprise
Informatics
12. Entrepreneurship Culture
Centre
38
Appendix 5: Organization Chart of VGCL
VGCL
Provincial Federations of
Labour
Central Sectoral Unions
Unions of
National General
Corporations
Unions of Local
General
Corporations
Provincial
Sectoral Unions
Unions of
Subsidiary
companies
→ : Direct administration link
Workplace
Unions
District
Federations of
Labour
Occupationbased Unions
Workplace
Unions
IPZ Unions
Workplace
Unions
Unions of subsidiary
companies
39
Appendix 6: List of Central Sectoral Unions
1. Vietnam National Union of Post and Telecom Workers
2. Vietnam National Union of Petroleum and Gas Workers
3. Vietnam National Education Union
4. Vietnam National Union of Industrial Workers
5. Vietnam National Union of Electricity Workers
6. Vietnam National Union of Railway Workers
7. Vietnam National Union of Transport Workers
8. Vietnam National Union of Aviation Workers
9. Vietnam National Union of Maritime Workers
10. Vietnam National Union of Banking Workers
11. Vietnam National Union of Building Workers
12. Vietnam National Union of Fishery Workers
13. Vietnam National Union of Health Workers
14. Vietnam National Union of Agricultural & Rural Development Workers
15. Vietnam National Union of Commerce and Tourism Workers
16. Vietnam Public Sector Union
17. Vietnam National Union of Rubber Workers
18. Vietnam National Union of Coal and Mineral Workers
19. Trade Union Committee of People's Police
20. Trade Union Committee of National Defence
40
Appendix 7: Official Form of Collective Labour Agreement (issued in attachment to
Decree 196, 31 December 1994)
The Socialist Republic of Vietnam
Company Name
Address:
Independence - Freedom - Happiness
COLLECTIVE LABOUR AGREEMENT
To guarantee the rights and obligations of the two parties in labour relations, we,:
1. Representative of the employer (name, title)
2. Representative of the collective of workers (name, title)
agree to sign this collective labour agreement which includes the following provisions:
I. GENERAL PROVISIONS
- Coverage;
- Term of the agreement;
- Commitment of the employer to guarantee union rights
II. CONTENTS
- Employment and Employment security
- Working time, Rest breaks
- Wages and Salaries, Bonus, Allowances
- Work norms
- Occupational safety and health
- Social Insurance
- Other provisions as agreed by the two parties
III. IMPLEMENTATION
- Responsibility for complying with the agreement
- Procedure for labour dispute settlement
- Scope of application and revocation of other regulations of the enterprise that conflict with
the agreement.
Date of signing and registration
Representative of Workers
(Title)
Signature and Seal
Representative of the Employer
(Title)
Signature and Seal
41
Appendix 8: Example of a strike in a Japanese Electronics Company
The company is wholly owned by a Japanese investor. It has been unionized but the
Chairperson of the union is also the company’s HR manager. In October 2004, a female
worker who was not a member of the union standing committee handed the Director a petition
asking for a wage increase. Upon this petition, the company planned to engage in discussions
with the workers, but did not inform them about when the discussions would take place. Two
or three days before the strike, the workers gave the management a notice that they would go
on strike for 24 hours unless the company increased their wages by thirty percent across the
board. The Director was angered by the demand, and refused it, thinking that it was simply a
threat. On December 4, all of the Vietnamese employees at the company (almost 1,000
workers) engaged in a 24-hour strike. After the strike, they all returned to work.
(Source: Research note of ILO's Vietnam IR field study in 2005)
42
Appendix 9: Basic labour data
1. Unemployment Rate (%):
Year
1996
1997
1998
1999
2000
2001
2002
2003
2004
2005
5.88
6.01
6.85
6.74
6.42
6.28
6.01
5.78
5.60
5.31
2. Economically Active Population (million people):
Year
Population
2000
37.6
2001
38.5
2002
39.5
2003
40.5
2004
41.5
2005
42.7
3. Consumer Price Index (%):
Year
Ave.
monthly
CPI
1995
101.4
1996
100.3
1997
100.7
1998
100.0
1999
100.0
2000
100.1
2001
100.3
2002
100.2
2003
100.2
2004
100.8
43
2005
100.7
Gross domestic product at current prices by ownership and by kind of economic activity
1995
1996
1997
1998
1999
2000
2001
2002
2003
2004
Prel.
2005
22889
2
27203
6
31362
3
36101
7
39994
2
44164
6
48129
5
53576
2
613443
715307
837858
91977
12248
7
10863
4
14329
6
12697
0
15820
3
14440
7
18039
6
15492
7
19605
7
17014
1
21287
9
18483
6
23024
7
20565
2
25641
3
239736
279704
321942
284963
327347
382743
Collective
23020
27271
27946
32131
35347
37907
38781
42800
45966
50718
57192
Private
17020
20129
29004
13170
6
32267
14270
5
38243
15322
3
44491
16912
2
60703
74612
95896
26153
12211
2
50500
82447
22625
10763
2
188497
215926
250939
14428
20106
28450
36214
48958
58626
66212
73697
88744
108256
133173
52713
61048
65883
76170
83335
87537
87861
96543
106385
119107
132633
Forestry
2842
4695
4813
5304
5737
5913
6093
6500
7775
9412
10052
Fishing
Mining and
quarrying
6664
9771
10130
11598
12651
14906
17904
20340
24125
27474
32363
11009
15282
19768
24196
33703
42606
44345
57326
72492
88154
Manufacturing
Electricity, gas and
water supply
34318
41290
51700
61906
70767
81979
95211
46153
11028
5
125476
145475
173463
4701
6538
8604
10339
11725
13993
16028
18201
22224
25091
28914
Construction
Wholesale and retail
trade; repair of
motor vehicles,
motor cycles and
personal and
household goods
Hotels and
restaurants
Transport, storage
and
communications
Financial
intermediation
Scientific activities
and technology
Real estate, renting
and business
activities
Public
administration and
defence;
compulsory social
security
Education and
training
Health and social
work
Recreational,
cultural and sporting
activities
Activities of party
and of membership
organizations
Community, social
and personal
service activities
Private households
with employed
persons
15792
17766
20522
20858
21764
23642
27931
31558
37100
44558
53276
37491
43125
48914
55783
59384
62836
67788
75617
83297
96995
113768
8625
9776
11307
12404
13412
14343
15412
17154
18472
22529
29329
9117
10390
12418
14076
15546
17341
19431
21095
24725
30402
36629
4604
5148
5444
6274
7488
8148
8762
9763
10858
12737
15072
1405
1629
1774
2026
1902
2345
2646
3009
3694
4315
5247
12392
13507
15355
17683
18260
19173
21589
24452
27287
31304
33620
8278
9417
10460
11849
11683
12066
12784
13816
16676
19061
23038
8293
9887
11274
13202
14004
14841
16245
18071
21403
23335
26948
3642
4007
4381
4979
5401
5999
6417
7057
8865
10851
12412
1259
1511
1844
2068
2378
2558
2800
2987
3376
3693
4158
223
281
443
577
584
614
651
712
774
885
1054
4979
6319
7855
8874
9323
9853
10412
11412
12497
14354
16293
545
649
734
850
895
953
985
1037
1108
1237
1435
TOTAL
By ownership
State
Non-State
Household
Foreign investment
sector
By kind of economic
activity
Agriculture
International Labour Organization
Subregional Office for East Asia
United Nations Building
Rajdamnern Nok Avenue
P.O. Box 2-349 Rajdamnern
Bangkok 10200, Thailand
45