THAI NGUYEN UNIVERSITY Socialist Republic of Vietnam SOUTHERN LUZON STATE UNIVERSITY Republic of the Philippines KHUẤT THỊ THU HIỀN (English Name: ROSE) CRITERIA OF LABOR RELATIONS AT ENTERPRISES IN HANOI, VIETNAM DOCTORAL DISSERTATION TNU-SLSU, 2013 THAI NGUYEN UNIVERSITY SOUTHERN LUZON STATE UNIVERSITY Socialist Republic of Vietnam Republic of the Philippines KHUẤT THỊ THU HIỀN (English Name: ROSE) CRITERIA OF LABOR RELATIONS AT ENTERPRISES IN HANOI, VIETNAM DOCTORAL DISSERTATION Supervisor: Associate Professor Dr TRẦN CHÍ THIỆN Thainguyen University of Economics and Business Administration (TUEBA) TNU-SLSU, 2013 i ACKNOWLEDGEMENT The researcher would like to express her sincere gratitude to Assoc Prof Dr Tran Chi Thien who has instructed her dedicatedly to complete this Dissertation The researcher would like to thank the lecturers of the University of Southern Luzon, Thai Nguyen University, and staff of Dong Xuan Knitting Company for helping her during the survey on labor relations Other thanks go to the University of Labor and Social Affairs where the author has been working for years, her family and all her beloved friends who have shared, encouraged and supported her unceasingly during her DBA program, hence made her study feasible The Author Khuat Thi Thu Hien i COMMITMENT The author hereby declares that this is her own research The information utilized in the Dissertation is trustful The labor relation criteria has not been available yet in Vietnam generally, in Hanoi, particularly In 2012, The National Assembly already passed the Labor Code However, the Code is just a general guideline which needs to wait for a respective Decree of the Central government, then respective Circulars of Ministry of Labor, Invalids and Social Affairs to be more specified in detail and applicable However, in Vietnam this process takes a long time, at least years normally A pioneer research can provide the involving policy makers with suggestions, as the food for thought, on what the labor relation criteria should be and what the way of the criteria application should be, is really in need The author strongly believes that the Dissertation is the first study in Vietnam to construct the set of labor relation criteria, and therefore also the first study to introduce the way to apply those criteria in the reality of an example enterprise Hence, the findings and conclusions of the Dissertation have not been published in any other work yet! The Author Khuat Thi Thu Hien ii TABLE OF CONTENTS ACKNOWLEDGEMENT i COMMITMENT ii LIST OF TABLES v LIST OF FIGURES vi ABSTRACT 01 CHAPTER I: INTRODUCTION 02 1.1 BACKGROUND OF THE STUDY 02 1.2 STATEMENT OF THE PROBLEM 03 1.3 SIGNIFICANCE OF THE STUDY 04 1.4 SCOPE AND LIMITATION OF THE STUDY 04 1.5 DEFINITION OF TERMS 06 CHAPTER II: REVIEW OF RELATED LITERATUES AND STUDIES 09 2.1 REVIEW OF RELATED STUDIES 09 2.2 THEORETICAL FRAMEWORK 21 2.3 CONCEPTUAL FRAMEWORK 40 CHAPTER III: METHODOLOGY 41 3.1 STRATIFIED CLASSIFICATION METHOD FOR CLASSIFYING LABOR REALTION CRITERIA 41 3.2 SECONDARY INFORMATION COLLECTION METHOD 43 3.3 PRIMARY INFORMATION COLLECTION METHOD 44 3.4 SATISFACTION RANKING METHOD 47 3.5 DISCRIPTIVE ANALYSIS METHOD 47 3.6 STATISTICAL TABLE METHOD 48 3.7 CHART ANF GRAPH METHOD 49 CHAPTER IV: CRITERIA OF LABOR RELATIONS AND THEIR APPLICATION AT ENTERPRISES IN HANOI, VIETNAM 50 4.1 CRITERIA OF LABOR RELATIONS 50 4.2 PROCEDURE TO APPLY LABOR RELATION CRITERIA AT AN ENTERPRISE IN ORDER TO EVALUATE THE HARMONY OF THE WORKING ENVIRONMENT 68 CHAPTER V: A CASE STUDY: AN EXAMPLE OF APPLICATION OF LABOR RELATION CRITERIA AT A SPECIFIC ENTERPRISE - DONG XUAN KNITTING COMPANY 72 5.1 OVERVIEW OF THE EXAMPLE ENTERPRISE 72 5.2 SURVEY RESULTS 78 iii 5.3 SUMMARY OF THE LABOR RELATION EVALUATION USING THE PROPOSED CRITERIA 102 CHAPTER VI: CONCLUSIONS AND RECOMMENDATIONS 106 6.1 CONCLUSIONS 106 6.2 RECOMMENDATIONS 108 REFERENCES 112 APPENDIX 116 APPENDIX A REQUEST LETTER TO CONDUCT THE SURVEY (TO RESPONDENTS) 116 APPENDIX B QUESTIONAIRRE 117 APPENDIX C CURRICULUM VITAE 126 iv LIST OF TABLES Table 2.1: Strategy on labour relations and corresponding policies 20 Table 3.1: The results of the stratified classification of the labor relation criteria 43 Table 4.1: The criteria of signing employment contracts 50 Table 4.2: The criteria of Termination of employment contract 52 Table 4.3: The criteria of Working time, rest time 53 Table 4.4: The criteria of working environment 57 Table 4.5: The criteria of the position of the employee at work 61 Table 4.6: The criteria of wages of workers 64 Table 4.7: The criteria of Method of payment 66 Table 5.1: Employees Distribution in Dong Xuan Knitting Company 74 Table 5.2: Number of sampled employees by work departments 76 Table 5.3: Number of sampled employees by education attainment 77 Table 5.4: Number of sampled employees by gender 77 Table 5.5: Summary of sample allocation by work departments, education attainment and gender 78 Table 5.6: Board of Directors of DOMIMEX 81 Table 5.7: Implementation of criteria on labor contract at DOXIMEX 82 Table 5.8: Implementation of contract termination criteria at DOXIMEX 85 Table 5.9: Implementation of criteria on working hours and rest at DOXIMEX 88 Table 5.10: Implementation of criteria on working environment at DOXIMEX 92 Table 5.11: Implementation of criteria on labor positions at DOXIMEX 95 Table 5.12: Implementation of criteria on wages at DOXIMEX 98 Table 5.13: Implementation of criteria on method of payment at DOXIMEX 101 Table 5.14: Score of Criteria Groups at DOXIMEX 102 v LIST OF FIGURES Figure 2.1: Dunlop‟s classical labour model 18 Figure 2.2: Kochan‟s Strategy selection model in labour relations 19 Figure 2.3: The interaction in Petit‟s labour relations system 21 Figure 2.4: Labor relations, the interference of the relations 23 Figure 2.5: Subjects of the labor relations 28 Figure 2.6: Scope and contents of labour relations at enterprises 40 Figure 4.1: Procedure to apply labor relation criteria to evaluate the 68 Figure 5.1: Age structure of the surveyed employees 79 Figure 5.2: Working experience structure of the surveyed employees 79 Figure 5.3: Number of criteria by satisfaction level at DOXIMEX 104 Figure 5.4: Ratio of employees‟ satisfaction of 64 labor relations criteria in Dong Xuan Knitting Company 105 Figure 6.1: Evaluation, synthesization of the result of labor relations evaluation in Vietnam 109 vi ABSTRACT The government and enterprises always expect to build harmonious and stable labor relations to increase productivity and to create employee‟s commitment to business However, so far, in Vietnam in general and Hanoi in particular, there has been no criteria system available as a basis for evaluating the labor relations at enterprises since it takes a long time (many years) for a Decree of the Government, and then Circulars of Ministry of Labor, Invalids and Social Affairs to be launched that concretize The National Assembly‟s Labor Code 2012 The development of criteria system for evaluating the labor relations at enterprises is very necessary It will serve as an important basis on which both the employers and employees can evaluate the level of the employees‟ satisfaction, hence they can make better employment planning which enhance both the benefits of the employees and the efficiency of the business Based on studies of international labor standards and related legal document of Vietnam, this Dissertation composes and proposes a set of criteria to evaluate the labor relations at enterprises in Vietnam Then, the Dissertation applies the set of proposed criteria to evaluate the labor relations at a specified enterprise in Hanoi, as an example case study of the way to apply the criteria in the reality of an enterprise Dong Xuan Knitting Company (DOXIMEX) is chosen for this purpose Finally, recommendations are suggested to the State, the employer, the trade union and the empoyees to introduce and implement the Criteria of Labor Relations in the reality of a specific enterprise The important implication of the criteria application is to evaluate the existing labor relations at the enterprise, and to find out solutions to improve the labor relations to ensure the rights and responsibilities of the relating parties so as to enhance the working environment at the company .CHAPTER I INTRODUCTION 1.1 BACKGROUND OF THE STUDY Labor relations at enterprises are the factor that largely influences business operation, economic development, social safety, working environment, and motivation for employees to enhance their labor productivity Since Vietnam has been shifting to market economy, labor relations have had many significant changes Employees have right to seek a job freely and employers have right to choose, recruit workers to suit business requirements Both the parties have their own rights and interests in compliance with the provisions of the Labor Code through labor contracts, collective labor agreements and other arrangements The Labor Code and other laws have played an important role in the above mentioned changes However, the labor relations in some regions are sometimes not as expected as it should be The phenomenon of contravening labor discipline which does not guarantee the legitimate rights and interests of workers still occurs and sometimes is very disturbing Labor disputes, strikes adversely affect the labor market There are many reasons for these problems, but mostly they are the sense of law respect not highly enough and lacks of full cooperation in goodwill from the both sides Only when a conflict has broken out in a labor dispute or strike, drawing intervention of the authority, the labor relations are then put back in peace again Experiences of some cases prove that, if both the parties took the initiative of good will to meet and have dialogues, negotiate each other in order to try to resolve the dispute soon, the strike would be much likely not to happen and potential damages would be smartly avoided Labor disputes and strikes are a natural phenomenon of dispute.html#ixzz25UPFI6lM 30 Read more: http://www.businessdictionary.com/definition/employer.html#ixzz25YXwJS5S 31 Read more: http://www.businessdictionary.com/definition/employer.html#ixzz25YXwJS5S 32 Read more: http://www.investorwords.com/5807/strike.html#ixzz25YREq8Fq 33 Some Labour Contracts of Dong Xuan Knitting Company 34 Summary of employees in Dong Xuan Knitting Company 35 The 100th convention on the equality between men and women labour for the same value working, 1951 - ILO 36 The 106th convention on weekly dayoff in business and office, 1957 - ILO 37 The 111th convention on discrimination on working and professional, 1958 ILO 38 The 132th convention on yearly dayoff be paid, 1970 - ILO 39 The 135th convention on protecting and advantages for representative of employees in business, 1971 - ILO 40 The 148th convention on protecting labourers against to professional risks caused by air pollution, noisy or vibration at working place, 1977 - ILO 41 The 14th convention on application weekly dayoff for industrial offices, 1921 ILO 42 The 155th convention on labour safety, sanitary and environment labour, 1981 ILO 43 The 158th convention on stopping labour using by employers have the sense of initiative, 1982 - ILO 114 44 The 183th convention on protecting pregnancy, 2000 - ILO 45 The 29th convention on forced labouring, 1930 - ILO 46 The 87th convention on establishing freedom rights, 1948 - ILO 47 The 98th convention on collective negotiation and organizing rights, 1949 - ILO 48 The Labour Code of Vietnam, 2012 49 The Law on disable people of Vietnam, 2010 50 The Law on enterprise of Vietnam, 2005 51 The Law on prevention and stopping fire of Vietnam, 2001 52 The Law on prevention HIV of Vietnam, 2006 53 The Law on social insurance of Vietnam, 2006 54 The Law on trade union of Vietnam, 2012 55 The Law on treatment of Vietnam, 2009 56 Thomas A Kochan, Robert B.McKersie and Peter Cappelli, "Strategie choice and industrial relations theory", 1984 57 Trade Unions and worker department, “Reporting surveys on reality of an enterprise with foreign owned capital’s labour relations”, 2007 58 Tran Kim Dung, Human Resource Management, Hochiminh General Publisher, 2011 59 VCCI, "Labour issues from the employers' perspective, Survey on labour in textile - garment industry in 2009" 60 Vietnam General Confederation of Labour and Vietnam Labour Relations Project ILO, "Trade Unions and labour relations in market economy situation in Vietnam", 2010, Labour Publisher 115 61 Vietnam Health ministry, The decision No 3733/2002/BYT APPENDIX APPENDIX A REQUEST LETTER TO CONDUCT THE SURVEY (TO RESPONDENTS) SOUTHERN LUZON STATE THAI NGUYEN UNIVERSITY UNIVERSITY Socialist Republic of Republic of the Vietnam Philippines ******************************* Date: ………2013 Dear Sir / Madam, Subject: Doctor Dissertation Application My name is Khuat Thi Thu Hien I am doing a Dissertation of Doctor of Business Administration I am very much interested in doing research in your Company In this connection may I ask your kindly permission to use your Company as my subject for research? My proposed title is "Criteria of labor relation at enterprises in Ha Noi, Viet Nam" If it is approved, I will conduct a research survey in your Company to be able get feedback with regards to the procurement which is implementing in your Company Rest assured that all information gathered will be treated with utmost confidentially I am looking forward to having your permission as soon as possible Thanks very much for your time, please acknowledge at your earliest convenience Yours sincerely, Khuat Thi Thu Hien 116 DBA Student 117 APPENDIX B QUESTIONAIRRE The information is provided is for scientific research: "Criteria of labor relation at enterprises in Ha Noi, Viet Nam" We commit to keep privacy of all information PART GENERAL INFORMATION Name (optional): Gender: (1) Male  (2) Female  Age: Working experience: Qualification Level: (1) High school  (3) College (2) Intermediate education   (4) University  PART LABOR RELATIONS IN ENTERPRISE Please provide information about labor relations by answering questions in the attached table Each table consists of main columns: - Column (1): Number - Column (2): Question - Column (3): Your answer, choose “Yes” or “No” - Column (4): If you response “Yes” in column 3, please provide satisfaction level in column Choose one of each level by circling one option Very Satisfied Satisfied Neutral Dissatisfied 118 Very Dissatisfied No Standard (1) Answer Choose option (3) (2) Satisfaction level Circle one option if “yes” in column (4) Yes No Very Satisfied Satisfied Neutral Dissatisfied Very dissatiisfied yes no yes no yes no yes no yes no yes no Standard 1: Hiring employees 1.1 Signing employment contracts 1.1.1 May all workers within enterprises sign employment contracts? 1.1.2 Do the employment contracts specify the provisions and conditions of employment? 1.1.3 Are the rights of workers in the employment contract in accordance with labor law, collective labor agreements and works rules? 1.1.4 Do the employers comply with the trial period of work? 1.1.5 May the employee be moved to sign an unidentified period contract after times the employment contract period? 1.1.6 Have workers been announced before temporarily transferring workers to other work? 1.2 Termination of employment contract 1.2.1 Do the employers terminate the employment contracts with the employees because of the 119 No Standard (1) Answer Choose option (3) (2) Satisfaction level Circle one option if “yes” in column (4) Yes Very Satisfied Satisfied Neutral Dissatisfied Very dissatiisfied reasons under the law? 1.2.2 No yes no Do the employers give the employee notice before yes no yes no yes no yes no yes no yes no terminating an employment contract ? 1.2.3 Do the employers consult with the union and notify the employee before the layoffs because of the changes in the business? 1.2.4 Have the employers complied with the provisions on subsidies (subsidies severance or unemployment benefits) upon the termination of a contract? 1.2.5 May the union officials get a contract extension until the end of the term union when the labor contract expires but the term union has not finished? Standard 2: Using Employers 2.1 Time of work and rest 2.1.1 Do working hours comply with the provisions of labor law (maximum hours/day, 48 hours/week)? 2.1.2 May the shift workers get break in the middle of their shifts at least 30 minutes (for day shift) and 45 minutes (for night shift)? 120 No Standard (1) Answer Choose option (3) (2) Satisfaction level Circle one option if “yes” in column (4) Yes Neutral Dissatisfied Very dissatiisfied 2.1.4 Satisfied May workers have at least a day off each week,? Very Satisfied 2.1.3 No yes no yes no yes no yes no yes no yes no yes no yes no Do overtime workers comply with the provisions of labor law (not to exceed hours/day, 16 hours/week, 200 hours to 300 hours/year)? 2.1.5 May employees get the employer to consult before mobilizing overtime? 2.1.6 May the employee be compensated to ensure taking at least days off/month when have to work overtime at the weekends? 2.1.7 May the employee be allowed to take days off with at least 12 working days every year? 2.1.8 Have workers been entitled to take days off with fully pay when having some private business (themselves married, child marriage, dead parents, husband or wife dies, the dead)? 2.1.9 May women workers who are raising children under 12 months get 60 minutes break every day with full pay? 2.2 Work environment 2.2.1 Do employees receive training, guidance and 121 No Standard (1) Answer Choose option (3) (2) Satisfaction level Circle one option if “yes” in column (4) Yes No Very Satisfied Satisfied Neutral Dissatisfied Very dissatiisfied yes no yes no yes no information on workplace safety, labor hygiene? 2.2.2 Are employees provided with the necessary tools and personal protective clothing? 2.2.3 Is there the safety warning signs be posted properly in workplace? 2.2.4 May temperatures in the workplace be acceptable?(i.e.: not too cold or too hot) 2.2.5 Does workplace have ventilation? yes no 2.2.6 Is noise at work acceptable? yes no 2.2.7 Is workplace full of light? yes no 2.2.8 Do Workers performing heavy or malicious work yes no yes no yes no yes no have free health check before assignment and examination every months? 2.2.9 Can workers in month pregnancy be transferred to lighter work or reduce by hour/day for working but still being paid enough salary? 2.2.10 Have employees be provided information on measures to prevent HIV/AIDS? 2.2.11 Have employer first aid training for employees? 122 No Standard (1) Answer Choose option (3) (2) Satisfaction level Circle one option if “yes” in column (4) Yes 2.2.14 Do employers provide employees enough drinking water? Very dissatiisfied soap? Dissatisfied Is workplace full of hand washing facilities and Neutral 2.2.13 Satisfied Does workplace have enough toilets? Very Satisfied 2.2.12 No yes no yes no yes no 2.2.15 Does workplace have fire detection system? yes no 2.2.16 Is workplace enough equipment fighting fire? yes no 2.2.17 Are there exits clearly marked and stuck with the yes no yes no yes no yes no guidance in workplace? 2.3 The position of the employee at work 2.3.1 Do employers respect the principle of nondiscrimination (religious or political views) when recruiting employees, arranging work or paying salary? 2.3.2 Does the employer implement the principle of gender equality (i.e not discriminate male and female) in recruitment? 2.3.3 Are employees respected in marriage, maternity? (i.e not be failed because of marriage, pregnancy, maternity leave or child care within less than 12 123 No Standard (1) Answer Choose option (3) (2) Satisfaction level Circle one option if “yes” in column (4) Yes No Very Satisfied Satisfied Neutral Dissatisfied Very dissatiisfied yes no yes no yes no months) 2.3.4 Do the employers hire workers with disabilities? 2.3.5 Do employers comply with the principle of nondiscrimination of HIV? (i.e does not require testing of HIV/AIDS as employers) 2.3.6 Have union representatives been in contact with employees at workplace? 2.3.7 Do workers freely join labor unions? yes no 2.3.8 Does employer provide union working facilities yes no yes no yes no yes no yes no and time for their job? 2.3.9 Do employees have the freedom to convene without the presence of managers? 2.3.10 With these problems which should be consulted by the union, employees have right to ask advises before making a decision? 2.3.11 Does the employer announce all employees about the content of the collective bargaining agreement? 2.3.12 Do the employers comply with the terms of the collective bargaining agreement? 124 No Standard (1) Answer Choose option (3) (2) Satisfaction level Circle one option if “yes” in column (4) Yes Satisfied Neutral Dissatisfied Very dissatiisfied Do workers hold their identification (such as Very Satisfied 2.3.13 No yes no yes no yes no yes no yes no yes no yes no yes no passport, identity card)? Standard 3: Remuneration 3.1 Wages of workers 3.1.1 Are laborers paid at least 70% of the salary during their apprenticeship? 3.1.2 Are the apprenticed laborers paid at least extra 7% of the minimum wage in the business? 3.1.3 Are the employees in hazardous and dangerous work, particularly dangerous or hazardous work paid at least 5% higher than the salaries of positions with normal conditions? 3.1.4 When working overtime in the normal working days, is the employee paid at least 150% of normal salary? 3.1.5 When working overtime on weekends, is the employee paid at least 200% of normal salary? 3.1.6 When working overtime on holidays, Tet, are workers paid at least 300% of normal salary? 3.1.7 Does the employer pay at least equal to 130% of 125 No Standard (1) Answer Choose option (3) (2) Satisfaction level Circle one option if “yes” in column (4) Very Satisfied Satisfied Neutral Dissatisfied Very dissatiisfied 3.1.8 Are workers paid for holidays? yes no 3.1.9 Are employees paid for annual leave time yes no yes no yes no Yes No normal wages for hours at night? (vacation)? 3.1.10 Are workers paid in time of severance due to the fault of the employer, or majeure causes? 3.1.11 Do women workers have days off (still full pay) for antenatal care during their pregnancy? 3.2 Method of payment 3.2.1 Are employees paid by cash or bank transfer? yes no 3.2.2 Are workers paid at least time/month? yes no 3.2.3 Are employees paid on time? yes no Thanks for your response 126 APPENDIX C CURRICULUM VITAE I PERSONAL INFORMATION Full name: Khuat Thi Thu Hien Sex: Female Date of birth: November, 23th 1975 Birthplace: Cuu Cao commune, Chau Giang district, Hung Yen province, Viet Nam Civil status: Marriage Children: Pham Minh Hoa, female, 12 years old Pham Minh Hieu, male, years old Contact address:  Current residence: No.43 Tran Duy Hung street - Hanoi - Vietnam  Phone: 09-03-314-073  Email address: hienktt2000@yahoo.com.vn II EDUCATIONAL QUALIFICATION Institution Date from Degree(s) or Diploma(s) obtained - Date to The Hanoi Law University, 1992-1997 Degree of Bachelor of Laws 2003-2007 Degree of Master of Public Vietnam National Academy of Public Administration, Vietnam Academy of Administration Education, 1998 Certificate of Education Vie/97/003 Project (ILO, 2000 Certificate of Labour Law Teacher Vietnam UNDP, MOLISA) 127 UNDP & MOLISA 2000 Certificate of The training of service Providers on Basic Social Work Skill National Academy of Public 2005 Administration, Vietnam ILO & ULSA Certificate of designing Lecture and Education methods 2007 Certificate of Training course on Promoting Employability & Employment of People With Disabilities III CIVIL SERVICE, ELIGIBILITY AND GOVERNMENT Working history Date Company/Project Position Description from to 1997- The University of Labor Lecturer in - Teaching in Labour Laws Up to now and Social Affairs Laws - Teaching in Economic Laws (ULSA) - Teaching in Insurance Laws Membership of professional bodies: - Teacher of Hanoi Association enterprise of women - Member of College and University Association I, the undersigned, certify that to the best of my knowledge and belief, this data correctly describes me, my qualifications and my experience Date …………… ……………………………… Khuat Thi Thu Hien 128 ... set of criteria to evaluate the labor relations at enterprises in Vietnam Then, the Dissertation applies the set of proposed criteria to evaluate the labor relations at a specified enterprise in. .. as a basis for evaluate labor relations at enterprises Thus, the theme of "Criteria of Labor Relations at Enterprises in Hanoi, Vietnam? ?? is chosen to study 1.2 STATEMENT OF THE PROBLEM To implement... the relations also deal with the collective aspect Collective labor relations have the capability of limiting inequality of individual labor relations 2.2.3 Principles of labor relations * Principle