Report on the Survey on Industrial Relations in East Asia

COLLECTIVE BARGAINING IN VIETNAM

ILO- Japan Multi- Lateral Project, 2006

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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

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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, labour utilization, and management principles”.

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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

1 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. Enterprise/occupation-based unions, 2. District, general corporation or provincial sectoral unions, 3. Provincial federations of labour or central sectoral unions, and 4. 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 self-employed 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 Vietnam is the Ministry of Labour, Invalids and Social Affairs (MOLISA).

2 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 semi-autonomous 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:

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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 decision-making 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 high-ranking 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 socio-political 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 occupation-based 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

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Table 2.1 VGCL: Organization Statistics 2005

National Trade Union Organization

Industry/sectoral or regional TU orgs.

Number of enterprise where trade union units are organized

Membership*

64 provincial Federation of Labour

66,415 (53,312 SOEs and 13,103 non-state enterprises)

3,713,690 Vietnam Confederation of Labour Total membership: 5.2 million (June 2005)

20 Sectoral Unions 4,451 (3,688 SOEs and 763 non-state enterprises)

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 15-19 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

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(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 top-down 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

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Articles 18 and 19 of Decree 1335 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.

6 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.

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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".

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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 labour-management 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

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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 union

10 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.

10 “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.

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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).

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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

group of employees excluded from collective agreements. According to the VGCL,13 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 non-unionised 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 Directive 02/2004/TTR-TLD issued by the VGCL on 22 March 2004.

13 VGCL Synthesis Report, 2005.

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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 foreign-invested 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).

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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 MOLISA

15 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.

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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.

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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 ‘interest-based 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”.

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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

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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 Number Percentage

State-owned Enterprises 5,364 8.53% 4,845 6.73%

- Large (>300) 1,733 1,700

- Medium (51-300) 2,626 2,346

- Small (10-50) 953 767

- Extra small (<10) 52 32

Private Enterprises 55,236 87.80% 64,526 89.60%

- Large (>300) 836 1,003

- Medium (51-300) 5,273 6,459

- Small (10-50) 19,130 23,725

- Extra small (<10) 29,997 33,339

Foreign-invested Enterprises 2,308 3.67% 2,641 3.67%

- 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 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%

Labour in Enterprises

Number Percentage Number Percentage

29

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%

FDI Enterprise 691,088 14.84% 860,259 16.62%

Total for the whole country 4,657,803 100% 5,175,092 100%

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 Percentage

State-owned 96 %

Foreign-invested 40 %

Domestic private 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) Total number of

enterprises Enterprises eligible for CB

Enterprises with signed CLAs

Workers covered by CLAs

Number 72,012 42,000 14,000 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

agreements registered

3.7 4.3 4.7 5.0

Source: Department of Employment and Labour Policy, MOLISA

N. Collective bargaining in public sector The public sector in Vietnam is divided into two sections:

30

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 wild-cat 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 non-unionised 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

31

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.

32

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.

33

recorded by MOLISA,18 80.7 percent of strikes in the country emerged from interest-based

demands. The most common demands of strikers were:

(i) Increasing wages and salaries; (ii) Increasing bonuses; (iii) Improving meals between shifts; (iv) Reducing overtime hours; and (v) 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.

34

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 relations-related 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.

35

APPENDICES Appendix 1: Organizational Structure of MOLISA

Technical Departments 64 Provincial DoLISAs

Labour and Employment Policies

Wage and Salary

Social Insurance

Social Assistance

Legal Affairs

International Cooperation

Personnel and Organization

Planning and Finance

Bureau for Work Safety

Bureau for Administration of Overseas Workers

Bureau for Wounded and fallen soldiers, national

devotees

General Department of Vocational Training

Labour Inspectorate

Ministry's Office

Social Assistance Division

Vocational Training Division

Labour Policy Division

Provincial Labour Inspectorate

Division for War Veterans and National

Devotees

Work Safety Division

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)

Minister and Vice Ministers

36

Appendix 2: Organization chart of ILSA

Minister of MOLISA

ILSA Director and Deputy Directors

Public Relations Division

Industrial Relations Division

Social Assistance Policy Division

Population-Labour-

Employment Division

Environment and working conditions Division

Branch Office in HCM city

Planning and Administration

Division

37

Appendix 3: VCA Organizational chart

NATIONAL DELEGATE

CONGRESS

EXECUTIVE

COMMITTEE

STANDING

COMMITTEE

RECEPTION

INSPECTION

COMMITTEE OF THE

PROVINCIAL UNION

UNION OF COOPERATIVES IN 64

PROVINCES AND CITIES

COOPERATIVES, COLLECTIVE GROUPS, COOPERATIVE UNION AND

OTHER MEMBERS

OF

FIC

E

INS

PE

CT

ION

DE

PA

RT

ME

NT

CO

OP

ER

AT

IVE

PO

LIC

Y A

ND

DE

VE

LO

PE

MT

N D

EP

AR

ME

NT

AS

SIS

TA

NC

E P

LA

NN

ING

DE

PA

RT

ME

NT

PR

OP

AG

AN

DA

AN

D

INF

OR

MA

TIO

N D

EP

AR

TM

EN

T

PE

RS

ON

NE

L D

EP

AR

TM

EN

T

INT

ER

NA

TIO

NA

L R

EL

AT

ION

DE

PA

RM

EN

T

ST

AN

DIN

G O

FF

ICE

OF

CO

MP

ET

ITIO

N A

ND

RE

WA

RD

ING

EN

TE

RP

RIS

E M

AN

AG

EM

EN

T

DE

PA

RT

ME

NT

INV

ET

SM

EN

T P

RO

JE

CT

MA

NA

GE

ME

NT

DE

PA

RT

ME

NT

VIETNAM ECONOMICS AND

COOPERATION NEWSPAPER

BUSINESS AND PRODUCTS

MAGAZINE

COOPERATIVE AND SME OFFICER

TRAINING SCHOOL

SCIENCE, TECHNOLOGY AND

ENVIRONMENT CENTER

CENTRE FOR SOCIO-ECONOMIC

PROGRAMS

MANAGEMENT AND TECHNOLOGY

TECHNICAL SECONDARY SCHOOL

TRADE AND INVESTMENT

DEVELOPMENT CENTRE

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

INSECTION

COMMITTEE OF

CENTRAL

steering and guiding relation

collaborative relation

38

Appendix 4: VCCI Organizational chart

CONGRESS

BOARD of

DIRECTORS

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

OTHER ORGANIZATIONS 1. Centre for Vietnam International Arbitrator

2. Mutual Loss Allocation Department

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

BRANCHES AND

REPRESENTATIVE

OFFICES 1. Branch in Ho Chi Minh 2. Branch in Da Nang

Representative Office in Khanh Hoa (under Da Nang Branch)

3. Branch in Hai Phong 4. Branch in Can Tho 5. Branch in Vung Tau 6. Representative Office in

Vinh City 7. 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

INSPECTION

COMMITTEE

39

Appendix 5: Organization Chart of VGCL

→ : Direct administration link

VGCL

Central Sectoral Unions

Provincial Federations of

Labour

Unions of National General Corporations

Unions of Local General

Corporations

District Federations of

Labour

IPZ Unions

Provincial Sectoral Unions

Unions of Subsidiary companies

Workplace Unions

Occupation-based Unions

Workplace Unions

Workplace Unions

Unions of subsidiary companies

40

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

41

Appendix 7: Official Form of Collective Labour Agreement (issued in attachment to Decree 196, 31 December 1994)

Company Name Address:

The Socialist Republic of Vietnam

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

42

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)

43

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 2000 2001 2002 2003 2004 2005

Population 37.6 38.5 39.5 40.5 41.5 42.7

3. Consumer Price Index (%): Year 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005

Ave. monthly CPI

101.4 100.3 100.7 100.0 100.0 100.1 100.3 100.2 100.2 100.8 100.7

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

TOTAL 22889

2 27203

6 31362

3 36101

7 39994

2 44164

6 48129

5 53576

2 613443 715307 837858

By ownership

State 91977 10863

4 12697

0 14440

7 15492

7 17014

1 18483

6 20565

2 239736 279704 321942

Non-State 12248

7 14329

6 15820

3 18039

6 19605

7 21287

9 23024

7 25641

3 284963 327347 382743

Collective 23020 27271 27946 32131 35347 37907 38781 42800 45966 50718 57192

Private 17020 20129 22625 26153 29004 32267 38243 44491 50500 60703 74612

Household 82447 95896 10763

2 12211

2 13170

6 14270

5 15322

3 16912

2 188497 215926 250939

Foreign investment sector 14428 20106 28450 36214 48958 58626 66212 73697 88744 108256 133173

By kind of economic activity

Agriculture 52713 61048 65883 76170 83335 87537 87861 96543 106385 119107 132633

Forestry 2842 4695 4813 5304 5737 5913 6093 6500 7775 9412 10052

Fishing 6664 9771 10130 11598 12651 14906 17904 20340 24125 27474 32363

Mining and quarrying 11009 15282 19768 24196 33703 42606 44345 46153 57326 72492 88154

Manufacturing 34318 41290 51700 61906 70767 81979 95211 11028

5 125476 145475 173463

Electricity, gas and water supply 4701 6538 8604 10339 11725 13993 16028 18201 22224 25091 28914

Construction 15792 17766 20522 20858 21764 23642 27931 31558 37100 44558 53276

Wholesale and retail trade; repair of motor vehicles, motor cycles and personal and household goods 37491 43125 48914 55783 59384 62836 67788 75617 83297 96995 113768

Hotels and restaurants 8625 9776 11307 12404 13412 14343 15412 17154 18472 22529 29329

Transport, storage and communications 9117 10390 12418 14076 15546 17341 19431 21095 24725 30402 36629

Financial intermediation 4604 5148 5444 6274 7488 8148 8762 9763 10858 12737 15072

Scientific activities and technology 1405 1629 1774 2026 1902 2345 2646 3009 3694 4315 5247

Real estate, renting and business activities 12392 13507 15355 17683 18260 19173 21589 24452 27287 31304 33620

Public administration and defence; compulsory social security 8278 9417 10460 11849 11683 12066 12784 13816 16676 19061 23038

Education and training 8293 9887 11274 13202 14004 14841 16245 18071 21403 23335 26948

Health and social work 3642 4007 4381 4979 5401 5999 6417 7057 8865 10851 12412

Recreational, cultural and sporting activities 1259 1511 1844 2068 2378 2558 2800 2987 3376 3693 4158

Activities of party and of membership organizations 223 281 443 577 584 614 651 712 774 885 1054

Community, social and personal service activities 4979 6319 7855 8874 9323 9853 10412 11412 12497 14354 16293

Private households with employed persons 545 649 734 850 895 953 985 1037 1108 1237 1435

45

International Labour Organization Subregional Office for East Asia United Nations Building Rajdamnern Nok Avenue P.O. Box 2-349 Rajdamnern Bangkok 10200, Thailand