The National Assembly's approval of the amended Labour Code last week marked fundamental changes to one of the most important legal documents that came into life in 1994. Longer maternity leave for female workers is only one part of it. The new Labour Code contains other equally important amendments which are expected to greatly improve the labour market and industrial relations in Viet Nam. Viet Nam News reporter Tran Quynh Hoa talked to representatives of employees, employers and independent experts to explore their reactions.
The National Assembly's approval of the amended Labour Code last week marked fundamental changes to one of the most important legal documents that came into life in 1994. Longer maternity leave for female workers is only one part of it. The new Labour Code contains other equally important amendments which are expected to greatly improve the labour market and industrial relations in Viet Nam. Viet Nam News reporter Tran Quynh Hoa talked to representatives of employees, employers and independent experts to explore their reactions. Mai Duc Chinh, vice chairman of the Viet Nam General Confederation of Labour
The Labour Code was amended twice in 2002 and 2006 but this is the most important amendment of the law so far, with most of its key clauses changed. The changes appropriately reflect the reality after more than 15 years since the law's implementation.
The amended Labour Code, of course, protects the rights of employers, but more importantly, it better guards the rights and benefits of employees, who are always more vulnerable in labour, and industrial relations.
The changes in the Labour Code are expected to affect the more than 15 million workers in formal sectors, not to mention those joining informal sectors across the country.
The new Labour Code now covers new issues in the labour market, such as labour sub-leasing or housemaids. It also requires employers to provide adequate training to their employees, something that has never been mandatory before.
A longer maternity leave is another important change in the Labour Code. The Government initially proposed a five month maternity leave (compared the current law's four months) but trade unions advocated for the scientifically recommended six months. Priority should be given to newborns, who need to be consistently breastfed in their first six months. I am glad that the National Assembly deputies supported the General Confederation of Labour and gave new mothers another two months of paid leave.
I further appreciate the new definition of wages in the amended Labour Code. Wages now include fixed salaries, allowances and bonuses. Employers will now have to pay insurance for their employees based on these wages. It is a significant difference from the current situation where enterprises try to divide their employees' income into many parts, with wages being only a fraction of the legal minimum. This helps save a great deal of money on insurance for employers while employees have to suffer.
The definition of minimum wages has also been addressed; it is now required that the minimum living standards be covered. Therefore, instead of adjusting minimum wages according to inflation, the Government will have to do a survey and research minimum living standards of different groups of people before setting new levels of minimum wages. The Viet Nam General Confederation of Labour suggested that the Government start these surveys in 2014, but they wanted to wait for an additional year, given the credit crunch.
Wages are the most problematic issue in the labour market and industrial relations today. Some 80 per cent of work disputes relate to wages. So if we have laws that arrange this issue properly, disputes and strikes will surely decrease.
However, the most significant change in the law is labour negotiation, bargaining and work agreements. The current Labour Code only mentions these issues in terms of administrative procedures, but its new version gives them an adequate amount of space for explanation and outlines imperative activities in order to improve labour relations in the country.
With these amendments, the labour issues in Viet Nam are expected to experience dramatic changes. Law making and law implementing, however, are two completely different stories in the country. Viet Nam's Labour Code has been recognised as one of the most advanced labour laws in the region, but at the same time, the country has a poor record for law implementation. Violations are almost everywhere, in all enterprises across the country.
Yoon Youngmo, chief technical advisor in industrial relations, International Labour Organisation in Viet Nam
The amended Labour Code and Trade Union Law adopted by the National Assembly last week contain significant changes that will have profound effect in modernising the labour market and industrial relations.
One of the key changes is the extension of the law's protection of new groups of workers. The new Labour Code recognises "labour sub-leasing" as a new pattern of employment. Known as "dispatch labour" in countries like Japan, South Korea, and China, and as "temporary agency work" in European countries, "labour sub-leasing" will require careful enforcement by the Government to ensure the rights of workers – jointly guaranteed by the "sending company" and the "user company" – are effectively protected. In addition, part-time workers and domestic workers (household helpers) also exist within the protection of the Labour Code.
Another new change creates the possibility for recognising employment relationships between a labour-user (employer) and workers on the basis of actual supervision of work, whether or not a "labour contract" is signed between them. This will help to protect workers who in fact work as "employees". It will provide the Government a basis to advise on the nature of actual relationships where various factors make the relationship ambiguous.
Minimum wage fixing will also have less Government intervention than the current way. From 2013, the Government will announce the new minimum wage based of the recommendation of the National Wage Council. The Government, employers, and the trade union will come together in the new Council to negotiate and jointly agree on what the minimum wage should be. To guide this work, the Government has to set the criteria for minimum wage, which should meet the minimum living needs of a worker and his/her family. The Government, together with social partners, will need to identify the minimum living needs. It will require the employer representatives and trade union representatives to be able to speak on behalf of the various different groups that exist in their communities.
Changes in the two labour laws will also have a significant and positive effect on industrial relations.
First of all, the revised Trade Union Law establishes the right of workers to organise and establish trade unions, their rights as members of trade unions, and prohibits actions of employers which interfere or violate these rights. Meanwhile, workers in companies where a trade union does not exist may be able to seek the support of the upper-level trade unions on matters union requiring representation.
The new Labour Code also makes it mandatory for companies to establish a social dialogue mechanism, which will enable the management and the workforce to exchange information and consultation on important issues which affect working conditions with a view to reaching a joint decision.
At the same time, the new Labour Code allows upper-level trade unions and employer organisations to participate in collective bargaining. It also requires the Government to facilitate and support the process of collective bargaining. With these changes, workers who used to go on wild-cat strikes may be able to rely on the procedures provided by the laws to raise their concerns and demands, reducing the need for such strikes.
The success of the changes made in the new Labour Code and revised Trade Union Law will depend on effective follow-up measures for implementation. This includes developing detailed implementation decrees, re-orienting and re-tooling of the relevant Government agencies and units across the country, and active awareness raising efforts on the part of relevant partners.
Nguyen Tuan Anh, managing director of Ha Noi-based RCEE-NIRAS Company JSC
The amended Labour Code is too new. We are still learning it. We are also awaiting more than 20 decrees to accompany the laws before they take effect in May of next year. In that sense, it will take us some time to be able to fully assess how these amendments affect our company.
However, I can instantly see a point that may result in significant changes in a company of medium-size like us – longer maternity leave for female employees. Increasing the leave from four to six months technically won't bring up any costs for our company since we already pay insurance for our employees and insurance companies will cover those months. But this extension will increase opportunity costs due to temporary labour shortage. New temporary staff who replaces those on maternity leave can also hardly perform at the same level and by no means have as developed partner relations as our permanent staff. However, workers' health and children's futures are more important, so we think the change is necessary for the whole society. — VNS