Market with few disputes

According to Vietnam Confederation of Labour (VCL) and the International Labour Organisation (ILO), only 700 strikes at maximum have taken place since the Labour Code was brought into force in 1994. The majority of strikes occurred at foreign invested enterprises in the south, but even there they are rare. For example, in 2003, out of 2,650 foreign invested enterprises only 100 strikes occurred,.

Operation in the private domestic economic sector is hardly ever interrupted by strikes. In 2003, when Vietnam had 65,000 operational enterprises, only 40 strikes were reported. The majority arise due to legal or contractual violations, such as employers who do not pay salary, welfare and social security, or do not compensate for the breaking of employment contracts. In some cases, disputes arise when labourers are forced to work overtime in excess of legal stipulations.

Though all strikes are technically illegal, enterprises in Vietnam have never had to use punishment sanctions against illegal strikers, instead, settling them in a number of different ways. For example, human resource officers at enterprises have asked their local department of labour, war invalids and social affairs to act as mediators, though this is not an authorised task of the department.

Dim role of trade unions and labour inspectors

Trade unions exist in all enterprises, but sometimes only on paper. Only 1/3 of foreign invested enterprises and 15% of private enterprises have collective agreements. A recent survey made by the Social Sciences Institute showed that only 16% of labourers recognised the role of trade unions in settling labour disputes.

Labour inspection has proven ineffective to implement labour standards. In 1995, the Ministry of Labour, War Invalids and Social Affairs employed 300 labour inspectors to examine 1,635 enterprises; however, a recent World Bank survey on the investment climate showed that labourers did not know much about the inspection tours or found them ineffective.

Standards of behaviour should be applied in enterprises

There are reportedly more than 1,000 rules regarding international standards of behaviour, most of which are set by private companies based on business demand. Accordingly, labourers have to follow the principles and rules set down by their employer. For example, Nike, estimates that 84,000 workers in 34 enterprises in Vietnam belonging to the international group must follow the rules.

Meanwhile, rival company Adidas – Salomon, said that 43,000 workers are following the company’s rules. In 2004, Adidas – Salomon decided to end their business relationship with one supplier, because they forced their workers to work overtime and could not meet requirements on heath care, labour safety, or the environment.

More and more enterprises in Vietnam have proven their commitments to implement social responsibilities. Recently, twenty seven Vietnamese enterprises, employing 28,000 workers received Social Accountability (SA) certificates, 8000 in September 2005. Vietnam ranks fifth in the world, after China, India, Italia and Brazil in terms of the number of workers joining.

Hong Phuc
Source: Vietnamnet, 28/2/2006