The Amended Labour Code will come into force from July 1, 2007 and repeals part two (Labour Strike Settlement) of the Ordinance on Procedures dealing with Labour Disputes of April 11, 1996. The Amended Labour Code is designed to reduce tension between employees and the employer regarding labour strikes. The Amended Labour Code introduces clearer regimes in designating the competent authority for settling individual and collective labour disputes, as well as the procedure applicable to each type of dispute and the procedure of running a strike. However, several problematic aspects remain.

Individual labour disputes
The Amended Labour Code does not contain any definition of “individual labour dispute”. Logically, one may rely on the definition of “collective labourers” to distinguish an individual labour dispute from a collective labour dispute. Unfortunately, the definition of “collective labourers” in Article 157.4 is not sufficiently clear: “Collective labourers are labourers working in the same enterprise or a section of the enterprise.” How many labourers in an enterprise or a section of the enterprise must be involved for the dispute to be considered a collective dispute? Also, does the definition of “collective labourers” prevent labourers in an entire industry/business field (foodstuff, textile or airline industry) or in a group of companies from coordinating in a dispute? If an individual labour dispute arises, it must first be referred to, and settled by, the labour reconciliation council at the relevant enterprise (the “Enterprise Reconciliation Council”) or the Labour Conciliator (Article 165a). If this fails, either party may refer the dispute to the relevant court for hearing. Individual labour disputes cannot give a rise to a labour strike under the law.

Collective labour disputes
Collective labour disputes are classified into collective labour Disputes over Rights (“Disputes over Rights”) and collective labour Disputes over Interests (“Disputes over Interests”). Disputes over rights are defined as those arising out of the implementation of labour laws and regulations, the collective labour agreement, registered internal labour rules or other lawful rules and agreements in an enterprise.
Disputes over rights will first be referred to the Enterprise Reconciliation Council (or the Labour Conciliator). If reconciliation fails, the dispute is referred to the Chairman of the district People’s Committee for settlement. If this second step fails, the dispute can be finally brought to the People’s Court or give rise to a labour strike, subject to the decision of the collective labourers.
By contrast, Disputes over Interests are defined as those arising out of new labour conditions and benefits other than the objects of Disputes over Rights. Disputes over Interests will first be referred to the Enterprise Reconciliation Council (or the Labour Conciliator). If reconciliation fails, the dispute is referred to the provincial Labour Arbitration Council for settlement. Failure in settlement by the Labour Arbitration Council can give rise to a labour strike.
By classifying collective labour disputes into Disputes over Rights and Disputes over Interests, the legislature expects that a substantial number of Disputes over Rights will move to courts for final settlement. This would reduce the incidence of labour strikes, stabilising the labour environment in businesses. However, this may not be realistic, as the cost and complexity of court proceedings may dissuade labourers from choosing court settlement. More problematically, some other problems may arise out of this classification.
It is important to determine if a given dispute is a Dispute over Rights or a Dispute over Interests for the purpose of confirming the lawfulness of a labour strike. However, drawing the distinction between these disputes is not easy. For example, policies on salaries and bonus are commonly specified in the registered collective labour agreement and internal labour rules of an enterprise. However, some companies apply their share/stock option plans to selected employees. If the share/stock option plan is construed to indirectly form part of the remuneration payable to the relevant employees pursuant to the collective labour agreement and internal labour rules of the company, a dispute on the share/stock option plan would likely constitute a Dispute over Rights. Otherwise, it is a Dispute over Interests.

Failure to classify a dispute
If mandatory reconciliation conducted by the enterprise’s Trade Union is unsuccessful, the Amended Labour Code requires that the unsuccessful reconciliation minutes specify whether the dispute is a Dispute over Rights or Dispute over Interests, mainly to determine the subsequent venue of dispute settlement. However, the law fails to deal with the circumstance where the parties are unable to agree on the classification of the dispute. A lawful labour strike must be conducted by the [provisional] Trade Union in the enterprise (or the representative appointed by the collective labourers in the absence of the Trade Union). A labour strike will lawfully be carried out if (i) in an enterprise of less than 300 employees, at least 50 per cent of the total employees agree to the strike; or (ii) in an enterprise of 300 employees or more, at least 75 per cent of the compulsory consulted persons agree (including the Trade Union’s members, heads and deputy heads of the Trade Union’s divisions and/or production teams).
Before and during the labour strike, the employer is entitled to commence legal action before the People’s Court for settlement of the Dispute over Rights or judgment on the lawfulness of the strike. The right to take legal action is vested in both the employer and relevant employees even three months after the strike terminates.
The policy on salary payable to employees during a strike is changed in the Amended Labour Code. Labourers who take part in a strike shall not be paid during that strike. Those who do not strike but have to cease working because of the strike will still be entitled to the work-suspended salary pursuant to Article 62.2 of the Labour Code. The Amended Labour Code attempts to balance the interests of both the employer and employees conducting the strike. From the employees’ perspective, collective labourers are entitled to strike to protect their rights and interests; the employer is not allowed to terminate labour contracts with those employees, or otherwise seek retribution against them. From the employer’s perspective, certain sanctions are imposed on employees who participate in unlawful strikes or abuse strikes, eg labourers who deliberately continue striking after the court opines on the unlawfulness of the strike will have to compensate for any damage that the employer has incurred due to the strike. However, it is difficult to determine the level of compensation under the Labour Code and Civil Code. The Amended Labour Code provides more clarity on procedures for resolving labour disputes.
The provision that striking labourers are not entitled to salary during strike action, and the imposition of liability on labourers for unlawful strike action, reflects the principle that strikes should only be conducted as a last resort. Employers will welcome these changes as they reduce the incentive to strike and correspondingly increase the chances of a negotiated outcome. However, the difficulty in distinguishing between collective and individual disputes, and between Disputes over Rights and Disputes over Interests may result in confusion.
These issues need clarification in implementing regulations from the government.

Source: Vietnam Investment Review