Vietnamlawmagazine

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

(Continued from last issue)

The current labor law divides collective labor disputes into two categories: (i) labor collective disputes about rights and (ii) labor collective disputes about benefits.[3] Accordingly, the law differentiates the bodies and organizations having jurisdiction to resolve a collective labor dispute about rights from those resolving a collective labor dispute about benefits. More specifically, the labor conciliation of an enterprise or a labor conciliator, the chairman of the people’s committee of a district or equivalent, the people’s court shall be the bodies and organizations resolving the collective labor disputes about rights, while bodies or organizations resolving the collective labor disputes about benefits shall be the labor conciliation council of an enterprise or a labor conciliator, and a labor arbitration council.[4]

Because it is obvious that a strike is considered to be a collective labor dispute under the law of Vietnam, all the regulations on resolving a collective labor dispute must be applied as an initial matter. Later, when the parties have already satisfied with all the resolution methods or procedures for a collective labor dispute, it is possible that some of the specific procedures applied to strike might be referred to, but all such procedures will be time-consuming and create many obstacles for organizations or people involved in a strike.

Inactive, weak trade unions

Under the current law, the trade union shall, in conjunction with state bodies and economic and social organizations, look after and protect the rights of employees; and inspect and supervise the implementation of the provisions of the laws on labor.[5] With their functions and duties, trade unions should have efficiently protected the legitimate rights and benefits or aspirations of the labor collective that it represents in an enterprise. However, in fact most trade unions have been working ineffectively with a limited role in participating in the collective labor dispute resolution on behalf of employees. There are several reasons why the ability of trade unions to participate in a resolution of the collective labor dispute is very weak and limited.

First, trade unions, technically, are established and organized under the will of employees with the purpose of protecting their legitimate rights and benefits, in addition to supervising the compliance of employers with requirements on labor conditions set forth by the law. However, they, in reality, have been guided by the leadership of the employer, and with material support from the enterprise. As a result, trade unions sometimes are unable to perform effectively their role in participating in the dispute resolution in favor of employees when they stand to benefit from the policies of the employers. Moreover, the leaders of trade unions, to some extent, are appointed by the employers themselves, with the possibility of at least implicit advance arrangements; therefore, their role must be very limited to certain circumstances. Finally, the law does not clarify the competence or jurisdiction of trade unions in the dispute resolution mechanism involving the tripartite division between employer, trade union, and employees. For all of these reasons, the employees are put in a disadvantaged position in negotiating with the employer, because of the uncertain role and/or possibly conflicting interests of the trade union.

Dilemma of unlawful strikes

Compensation for unlawful strikes has been defined in Article 179 of the 2006 Labor Law. Specifically, it provides: “in the event of a ruling by a court stating that a strike is unlawful and the employees fail to stop striking and return to work, then depending on the seriousness of the breach, such employees may be subject to a labor disciplinary penalty in accordance with the law on labor. In the event that an unlawful strike causes loss and damage to the employer, the organizations and individuals participating in the strike and who were at fault must pay compensation for loss and damage in accordance with law.”

As a further stipulation, Decree 11 specifies that damage caused by an unlawful strike includes corporate assets which are lost directly due to suspension of production and business caused by the strike and the maximum level of compensation must not exceed three (03) months’ wage or pay received by employees going on strike under labor contracts before the date of a strike.[6]

Actually, the regulations on compensation in the case of an unlawful strike as defined in both the 2006 Labor Law and Decree 11 had raised an unresolved dispute as well as a dilemma for such a long time in respect to its feasibility. Some argue that a strike occurs because of a breach or violation of the employers, and that the employees have no way to protect themselves except through a collective stoppage at work.[7] In addition, the majority of strikes have been organized with the purpose of calling for adequate wages (or related material compensation, such as issues related to bonuses). So there is some irony, as well as impracticality, that the law would impose fines on strikers who themselves are only seeking reasonable compensation.

The employers argue that once a strike happens, they incur losses and damages and need a legally defined mechanism to recover. Currently, the law only specifies the damage caused by unlawful strikes to be those due to the suspension of production and business that have occurred as a result of the strike. However, there is other potential loss and damage which has not been clarified by the law, such as loss of clients, prestige harm or cancellation of business orders or deals. Depending on the circumstances, these damages could conceivably be in the millions of dollars (U.S.), while the maximum of compensation paid by employees is limited to a maximum of three consecutive months’ wages.

Recommendations

The time has come for Vietnam to develop a more effective, efficient, and enforceable mechanism governing the relationship between employees and employers in the area of collective dispute resolutions and strikes. More specifically, it is important that the state recognizes “strikes” in the more conventional sense of the term, to include the right of self-defense of the employees, as opposed to its current meaning, which concerns the collective labor dispute with applicable procedures in the current labor law. From this perspective, the law on strikes could be considered to be made by the National Assembly and a new mechanism to resolve any matters related to a strike could be taken into consideration.

Additionally, the definition of strike as specified by the current labor law even shows some salient features of a strike; it however does not generally define the purposes of the strike, and it does not care who would be under the pressure of a strike. Even the International Labor Organization (ILO) lacks direct regulations on strikes but does consider strikes as the manifestation of freedom of rights to association and organization and negotiation of the labor collective.[8] For this approach, the definition of strike, as an initial matter should take into account the very purpose of a strike, as well as recognize it as the “last weapon” of laborers once their rights and benefits are not guaranteed. Second, the definition of strike should address the challenges of employers in solving disputes with labor collectives. Indeed, it is because of the pressures on both parties that such challenges create, that incentivize the reaching of a mutually agreeable bargain.

Simplifying strike procedures

Clearly, it is currently too complicated for a labor collective to organize a lawful strike under the law because of many procedures applied thereby. In the future, to avoid an unlawful strike which might result in a negative impact on the rights and benefits of employees, it is necessary to simplify the procedures that define whether a strike is lawful or not. The labor collectives actually have been bound by many requirements in a situation in which case they organize a strike to fight against their employers. Therefore, the law needs to rationalize some unreasonable provisions which restrict a labor collective from organizing a lawful strike.

For example, although the law recognizes trade unions as the bodies representing and protecting the rights and benefits of employees, it remains unclear what is the role of trade unions in participating in resolving the disputes. And it is an established fact that trade unions in an enterprise might not be able to organize a strike for the sake of employees because they could not act independently from the employers’ will, especially when they get paid by employers. The question is why employees still need to be led by a trade union for their strike which does not care much about how to protect its members? With regard to this matter, it is our opinion that the law should give rights to other labor organizations or institutions, instead of the trade unions, to represent the labor collectives in leading a strike, so as to make it lawful. It is important to enable the higher level institutions of the trade union in an enterprise, the provincial trade union where such enterprise is located for example, to represent the rights and interests of employees and lead a strike on behalf of employees.

More effective unions

Given the fact that the trade unions have not acted actively and efficiently in protecting the rights and benefits of their members (the employees in collective labor disputes) as they should have done, the role of trade unions needs to be clarified by the law. Furthermore, it makes sense to recall that more than 80% of enterprises where strikes have occurred do not have trade unions even though they were supposed to have them. It is important that the current labor law or relevant regulations governing organizations or the operation of trade unions (currently Trade Union Law) should take this issue into consideration.

Accordingly, the law needs to provide compulsory provisions to force all enterprises which regularly use employees to establish trade unions to represent the rights and benefits of employees in such enterprises. Currently, Vietnam is a member of Convention 114 regarding the tripartite labor relations proposed by the ILO. It is necessary for Vietnam to revise the domestic law on labor in accordance with the proposal in respect of tripartite relation in solving collective labor disputes with important role of trade unions.

Furthermore, the law should build an appropriate mechanism under which trade unions could act independently from employers. For this reason, an independent trade union should be established within an enterprise and its organizational structure as well as operations must be clarified to avoid the interference of employers in respect of dispute resolution process.

Practical compensation system

Presently, the regulation on compensation for damage caused by unlawful strikes is not appropriate. This has been a dilemma for not only the law-makers themselves, but also the parties involved in labor relations; so the law needs to be more practical accordingly.

Specifically, it is possible to provide for serious sanctions to be imposed on employees in the case of loss or damage caused by an unlawful strike due to suspension or delay of production and business of employers. The maximum level of, compensation (currently three months wages of employees) should be shifted to a higher level. Instead, the compensation should be based on actual damages or losses caused by those who are involved in an unlawful strike without any limitation to liability. This might restrict employees from organizing unlawful strikes, as there would be a mechanism to protect the employers in the case of losses or damages caused by action of such strikes.

Simultaneously, however, the lawmakers need to consider the actual situation of employees in labor dispute relations to define the level of compensation so that it is reasonable and meets the need of feasibility. If the level of compensation is too low, it will be ineffective to restrict or deter the employees from organizing an unlawful strike. Conversely, it is impossible for employees to compensate the employers for damages or losses caused by their participation and action in an unlawful strike if the compensation is set at a high level. The regulation on compensation for damages caused by an unlawful strike, therefore, must be reasonable in consideration of the balance of both parties.-