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Official Gazette

Monday, March 30, 2020

On strike: Vietnamese law on labor disputes

Updated: 14:40’ - 27/04/2010

Tran Si Vy[1] & Brady Coleman[2]

Strikes in Vietnam, as in other countries, have a long history. After Vietnam regained independence from the French in 1954, strikes were recognized as a fundamental right of labor, and officially acknowledged by the central government. Article 174 of Decree No. 29/SL, dated March 12, 1947, stipulated: “workers have the rights to freedom of assembly and strike. A subsequent decree shall define the scope of exercise of these rights as well as modes of conciliation and arbitration.” However, due to the war between Vietnam and France, “a subsequent decree” was never issued, and so Decree No. 29/SL was never enforced.

After the war against France, Vietnam entered into a war with the United States (1954-1975).  All disputes arising from labor relations between employers and labor collectives during the Vietnam - US war were not considered to be collective labor disputes.[3] As a result, there were almost no strikes at the time; all human resources of the country were involved in or influenced by the war, directly or indirectly.[4]

Vietnam “woke up” in 1986 when it implemented a renewal policy (Doi Moi) and opened the door to foreign direct investment, international trade, and commerce. This has substantially changed the country - with the rapid development of the economy, and a significant growth in GDP.[5] From the post-war period until 1986, the country transformed its economic model from a centrally planned economic system to a multi-sectoral commodity economy[6] with the ambition to catch up with the development of the outside world. At the time (1986) of the introduction of Doi Moi, state-owned enterprises represented the backbone of the country’s economy, as government policy had until then focused almost exclusively on their development as opposed to the private sector.

Like some other jurisdictions around the world, strikes organized by public servants or state-owned enterprises are forbidden. For this reason, for the years following Doi Moi, strikes were not a matter for the management of the government.

If 1986 was considered a turning point for the development of the economy of Vietnam, the 1990s marked further changes with the appearance of many foreign companies investing in Vietnam to match the growth of private sectors in the economy. As a result of the multi-sectoral commodity economy established by the government, labor relations have changed accordingly. In order to govern labor relations between employers and employees and to protect the rights and interests of laborers, the National Assembly enacted the first Labor Code in 1994 and has amended this legislation several times - in 2002, 2006 and 2007.[7] In 2006, under strong pressure to provide the law with the purpose of solving labor disputes in general and collective labor disputes in particular, the National Assembly adopted the newly amended labor code, and repealed all regulations relating to the resolution of labor disputes as prescribed in the 1994 Labor Code at its 10th session on November 29, 2006 (2006 Labor Law).

Even though regulations on strikes were stipulated in the 2006 Labor Law, the majority of strikes in Vietnam continued to be found unlawful. According to statistics, between 1995, the year when the Labor Code took effect, and January 2006, there were 1,056 strikes throughout the country.[8] It is believed that there have been 649 strike cases, in both big cities and the provinces, but especially in some industrial parks and export processing zones throughout the country for the first four months of 2008, nearly doubling the level in 2006.[9] The number of strikes continues to increase from year to year, and they are becoming increasingly sophisticated, with no signs of an impending reduction.[10] And again, it is important to note that most of these 1,056 strikes have been organized unlawfully.  

In practice, there are specific features of the strikes in Vietnam in recent years. First, the majority of strikes have been organized spontaneously without any prediction or preparation due to the fact that Vietnamese employees possess very poor knowledge on what right they have in going on a strike in accordance with the law. The labor collective, in some circumstances, just immediately organized a strike to call for better labor conditions or salaries without following the procedures or orders required by law for a lawful strike. Second, many strikes have been organized without the guidance or leadership of a trade union. Given the fact that 80% of the total number of strikes have occurred in enterprises with no presence of a trade union[11], this brings one more big issue in terms of a dispute resolution mechanism under the labor law. Third, the settlement of a collective labor dispute has not been carried out in accordance with the procedures or order as defined by the law.  Fourth, so far there has been no enterprise lodging a petition to the court for a decision to determine whether or not a particular strike is lawful.

Definition of strike

Currently, there is not any official legal document to clarify the situation concerning strikes and resolution to strikes - other than the 1994 Labor Code which has been revised to add some more words in 2006. By law, a strike means a temporary and voluntary cessation of work organized by the labor collective in order to resolve a collective labor dispute.[12] Vietnamese law considers a strike a “dispute” that occurs between employers and employees on certain labor issues.

In our opinion, the current definition of strike is problematic under the labor law. More specifically, when a labor collective does not satisfy with the labor conditions or salaries as well as benefits paid to employees for their work, the law should allow for a strike to be organized to call for better labor conditions or better benefits which the labor collective might enjoy. Further, if that strike succeeds, employers would then be forced to improve the labor conditions or satisfy the demands as required by the labor collective. Conversely, if the strike fails or is declared unlawful by the competent court, the labor collective just gets back to work with empty hands while nothing is done about the underlying collective labor dispute.[13]

Trade unions

In any circumstance, a strike must be organized and led by the executive committee of the trade union of the enterprise or by the provisional executive committee of a trade union (“Trade Union”) in accordance with the labor law.[14] This requirement sounds good since a trade union is the representative of the labor collective in an enterprise and as such the role of leadership to strike must belong to it technically. However, given the fact that more than 80% of enterprises in all sectors do not have their own trade unions to represent the rights and interests of the labor collective once a strike occurs, the labor collective is, in the large majority of situations, left without its own “spokespersons” or representatives who talk with employers to find the way out for a strike.  

The labor law also gives a right to a representative appointed by the labor collective to organize and lead the strike. In short, a strike must be organized and led by either the trade union of an enterprise where such strike occurs or by the representative temporarily appointed by the labor collective in an enterprise.

Legal procedures of a strike

To organize a strike, it is an important duty of trade unions or the labor collective representatives to solicit opinions of laborers about the causes of the strike.[15] The trade unions and representatives of the labor collective shall then issue a written decision on a strike together with a demand addressed to the employers. Specifically, they need to obtain opinions in agreement from more than 50% of the total number of laborers in the case of an enterprise or a section of an enterprise with under three hundred (300) employees, or over seventy five (75) per cent of the number of people from whom opinions were taken in the case of an enterprise or a section of an enterprise with three hundred (300) or more employees.[16]

At least five (5) days prior to the date of commencement of the strike, trade unions or the labor collective representatives must nominate a maximum of three people to present the decision on the strike and the written demand to the employers, and must at the same time send one copy to the provincial labor body and one copy to the provincial trade union confederation.[17]

Petitioning for a court ruling

The 2006 Labor Law provides that either party has the right to petition a court to consider the legality of a strike during the process of a strike or within a period of three months from the date of ending a strike.[18]

According to the 2006 Labor Law, either employer or labor collective representative or trade union could petition a court for a ruling on whether or not it is a lawful strike.  In this case, the legal procedures of the Civil Procedure Code shall be applied to provide the parties with a guidance on lodging petitions and for the receipt of petitions as well as regulations on the obligation to provide data or evidence at court.[19]

The provincial People’s Court relies on the applications submitted by either party to a strike who lodges a petition, as well as the actual situation of that strike to rule on the legality of a strike. In the case where a court decides to consider the legality of a strike, it then must send a ruling to both disputing parties to a strike within a time limit of three working days as from the date of issuance of such ruling.[20] The court shall hold the session continuously in order to rule on the legality of a strike within five working days as from the date of decision to consider the legality of such strike.[21] Unfortunately, the law does not specify exactly when the court shall issue a ruling on the legality of a strike after five working days of its session since no regulation on this matter is mentioned or referred to. However, the time as from the date of submitting a petition to the court until a ruling on the legality of a strike might be issued is expected to be in the vicinity of 20 working days.

Consequently, in a case where a strike is ruled to be unlawful by the court, the labor collective must immediately cease striking and return to work no later than one day after the date on which the court pronounces its ruling. If the parties are not satisfied with the ruling on the legality pronounced by the provincial People’s Court - which is the competent court to petition for a strike - it is allowable for any of them to lodge a complaint about such ruling with the Appeal Court of the People’s Supreme Court for a final decision.[22]

Unlawful strikes

In addition to providing regulations on strikes and procedures, and rendering orders to organize a strike in accordance with the labor law, the government has issued some important legal documents providing in detail the compensation in case of an unlawful strike.

Article 179 of the 2006 Labor Law prescribes that “in the event that an unlawful strike causes loss and damage to the employer, the organization and individuals participating in the strike and who were at fault must pay compensation for loss and damage in accordance with law.” For further guidance on compensation in cases of unlawful strikes, the Government issued Decree 11/2008/ND-CP on January 30, 2008, providing the regulation on compensation for damages caused by unlawful strikes to the employer, with guidelines to its implementation being defined by Joint Circular 07/2008/TTLB-BLDTBXH-BTC dated May 30, 2008 (Decree 11). Decree 11 specifies that trade unions or labor collective representatives, representatives appointed by labor collectives leading the strikes, as well as employees participating in a strike ruled unlawful by a people’s court, and causing damages to employers shall compensate for such damage.[23] Damage caused by an unlawful strike include corporate assets which are lost directly due to the suspension of production and business caused by the strike.[24] However, the maximum level of compensation must not exceed three (3) consecutive months’ wage or pay received by employees going on strike under labor contracts before the date of a strike.[25]

Shortcomings of current law

Naturally, it is common sense for employees in some situations to organize a strike as a tool to persuade employers to sit down and negotiate again for better labor conditions or benefits, after previous rounds of negotiation have failed. Strikes, therefore, may be the only effective mechanism available to employees who need a bargaining tool concerning employment issues. But this has nothing to do with disputes arising between both parties (i.e., the employer and the labor collective). In conformity with an approach which does not consider strikes to be a labor dispute, U.S law uses the language “collective bargaining” - meaning the bargain on certain labor conditions or benefits occurring between employers and employees.[26] Broadly, under U.S. law, a strike could be defined as “a work stoppage; the concerted refusal of employees to perform work that their employer has assigned to them in order to force the employer to grant certain demanded concessions, such as increased wages or improved employment conditions.”[27]

However, within the definition of a strike as defined by 2006 Labor Law, it seems that the lawmakers have implicitly defined strike as a collective labor dispute occurring within labor relations in the workplace.

Therefore, the law that provides the procedures and orders, as well as the methods, to solve a collective labor dispute, actually overlaps with those applied to a strike. We suggest that the domestic lawmakers should carefully consider the nature of labor relations between employers and employees so as to create a new approach to the legal definition of a strike. Consequently, Vietnam might possibly come up with specific legislation on strikes which might be possibly separate from the current labor law. If strikes are considered to be a fundamental right of laborers to protect themselves, the resolution to strikes, accordingly, should reasonably be changed as well, without the imposition or application of the labor collective dispute resolution under the labor law.  

Lawful vs. unlawful

Currently, the law sets forth extensive qualifications in its determination as to whether a strike is unlawful or not. It is unclear if the intention of the State is to restrict strikes from happening at all, with such tight regulation; in any case, the current regulations clearly limit the rights of laborers to strike to some extent.

According to Article 173 of the 2006 Labor Law, a strike is unlawful if: (1) it does not arise from a collective labor dispute; (2) it is not held by employees jointly working within an enterprise; (3) it is held when a collective labor dispute remains unresolved by, or is currently being resolved by, a body or organization; (4) opinions about the strike from employees have not been taken or when there is a breach of the procedures as defined by relevant provisions of the 2006 Labor Law; (5) there is non-compliance with the provisions on organization and leadership of the strike; (6) it is held at an enterprise at which strikes are prohibited pursuant to the list issued by the Government; and (7) there is a decision staying or suspending the strike.

If one looks at this provision in an attempt to determine if a strike is to be held unlawful, it could be argued that it is quite challenging to consider such a lengthy and complicated list of requirements and qualifications. In practice, most strikes have been found unlawful for a variety of reasons. First, employees in many strikes have not possessed enough knowledge of either the law in general, or the specific labor law applicable to strikes, in particular. As long as a collective labor dispute happens and there is not any way to resolve it by conciliation or negotiation, the labor collective naturally will just stand up and call for a strike, regardless of the legality of their action. Second, the law provides that a strike must, nevertheless, be organized and led by a trade union or labor collective representative. However, a study has shown that more than 80% of enterprises where strikes have recently occurred do not have trade unions themselves while the labor collective usually tends to ignore the role of either the trade union or the labor collective representative in a strike.

Therefore, in the future, a look back at the qualifications applied to a lawful strike must be considered and the provisions applied to define an unlawful strike need to be taken into account. It is apparent from actual practice that in most cases, strikes spontaneously organized by laborers might be reasonable in terms of employees’ demands - while they have been declared unlawful just by virtue of the complicated requirements applicable to a lawful strike in the labor law.

(To be continued)



[1] Attorney-at-Law, (Leadco - Legal Counsel, Hanoi, Vietnam); LL.M (International Law, Transnational Law & Business University, Seoul, Korea, 2009); B.A. (Economic Law, Hanoi Law University, 2005).

[2] Associate Professor, Department of Law & Human Rights, International Islamic University, Islamabad, Pakistan; Adjunct Professor, Transnational Law & Business University, Seoul, Korea; J.D. (Harlan Fiske Stone Scholar, Columbia University 1989); M.A. (University of Leicester, UK 1998); B.A. (summa cum laude, Amherst College 1985).

[3] See Nguyen Quang Minh, LL.M, National Assembly Office, “Strike and Settlement of Labor Disputes: Legal Issues and Proposals”, Vietnam Law and Legal Forum dated June 4, 2006.

[4] Supra note

[5] According to official statistics provided by the Ministry of Industry and Trade in 2008 Report, GDP increase rates for Vietnam were 7.04% for  the year of 2002, 7.24% for the year of 2003, 7.7% for the year of 2004, 8.4% for the year of 2005, 8.17% for the year of 2006, 8.48% for the year of 2007 and 6.23% for the year of 2008.

[6] Before Doi Moi, Vietnam’s economic system was a centrally planned one, i.e., the means of production and consumption were subject to detailed plans approved by the government without responding to market demands. Market participants in the economy include two main components: cooperatives and state-owned enterprises. Since Doi Moi, market participants have been enriched by the recognition of a multi-sectoral economy with appearances of many different types of economic sectors: cooperatives, state-owned enterprises, private business sector, foreign-invested sector.

[7] The Labor Code was passed on June 23, 1994, by the IXth  National Assembly at its 5th session and amended by Law No. 35/2002/QH10 Amending and Supplementing a Number of Articles of the Labor Code passed on April 2, 2002, by the Xth National Assembly at its 11th  session, effective on January 1, 2003. In 2006, the Labor Code was amended by the Law Amending and Supplementing a Number of Articles of the Labor Code in respect of labor dispute resolutions and it was again supplemented by the Law Amending and Supplementing a Number of Articles of the Labor Code in 2007.

[8] See Pham Cong Bay, “A must to consider the reality to amend and supplement the Labor Law,” Legislative Studies Magazine, Office of the National Assembly, Issue 4, 2006.

 

[9] See Nguyen Thi Lan Huong and Luu Quang Tuan, “Policy Coherence Initiative on Growth, Investment and Employment - The Case of Vietnam”, ILO Regional Office for Asia and the Pacific, Bangkok, ILO Policy Integration and Statistics Department, Geneva, 2009, page 58.

[10] According to statistics provided by the Ministry of Labor, War Invalids and Social Affairs, the number of strikes in Vietnam for the year of 2003 was 119 while this figure was 125 for the year of 2004, 147 for the year of 2005, 390 for the year of 2006 and 541 for the year of 2007.

[11] According to the official statistics provided by Vietnam General Confederation of Labor, available at http://www.congdoanvn.org.vn/printdocument.asp?MessageID=440, last access on January 11, 2010, and “solutions to limit strikes: the need of a new labor law,” Vietnam Law Newspaper dated May 18, 2006. 

[12] See Article 172 of the 2006 Labor Code.

[13] According to Article 178(1) of the 2006 Labor Law “the ruling of a court after consideration of the legality of a strike must specify whether the strike is lawful or unlawful. In the event of a conclusion that the strike is unlawful, the ruling must specify the circumstances which render the strike unlawful. In such a case, the labor collective must immediately cease striking and must return to work no later than one day after the date on which the court pronounces its ruling.”

[14] See Article 172a of the 2006 Labor Law.

[15] See Article 174a of the 2006 Labor Law.

[16] See Article 174b(1) of the 2006 Labor Law.

[17] See Article 174b(4) of the 2006 Labor Law.

[18] See Article 176a(1) of the 2006 Labor Law.

[19] See Article 176b of the 2006 Labor Law.

[20] See Article 177c(3) of the 2006 Labor Law.

[21] See Article 177dd(1) of the 2006 Labor Law.

[22] See Article 179a of the 2006 Labor Law.

[23] See Article 4 of Decree 11.

[24] See Article 6 of Decree 11.

[25] See Article 7 of Decree 11.

[26] See D. Quinn Mills, “Reforming the U.S. System of Collective Bargaining”, Monthly Labor Review, March 1983, p18 - p 22.

[27] See “Strike - Federal Labor Law, Status, A Lexicon Of Labor Strikes, Unlawful Tactics, Settlement - Union Members,” available at http://law.jrank.org/pages/10558/Strike.html, last access on January 12, 2010.

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