Tài liệu Criteria of labor relations at enterprises in hanoi, vietnam

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 3 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. 1 .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 2 employment relationship which occurs as the consequence of the adaptation of the labor relations in a new context of such a huge range of new requirements for the development of the country. Thus, responses to this issue, the whole society, including the legislature, the government, concerned organizations and individuals, are called for. Labor disputes in Vietnam often arise from the workers‟ claims for higher wages, better working conditions while employers want to seek profits, reduce costs and increase competition capability. In almost cases, both the sides have their own reasons. Therefore, the problem is how to reconcile these conflicts in a satisfactory way for them to be able to continue the work. This is a big challenge for the employment relationship in Vietnam. The government and enterprises always expect to build harmonious and stable labor relations to increase productivity and create employee‟s commitment with business. However, so far, in Vietnam in general and Hanoi in particular, there has been no criteria system served 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 this study, the author answered the following questions: - Which criteria can be used to evaluate labor relation at enterprises? - What should be the procedure to apply the labor relation criteria in the reality of an enterprises - How are the criteria implemented in a specific enterprise, Dong Xuan Knitting Company, for example? 3 - What are solutions proposed to the State, the employer, the Trade Union, and the employeess that are relating to the introduction and the implementation of the Labor Relations Criteria in the reality? 1.3. SIGNIFICANCE OF THE STUDY This study tries to construct a set of criteria to evaluate the labor relations at enterprises that can be used to evaluate the level of employees‟ satisfaction of the labor relation at enterprises. Based on that evaluation results, stakeholders would consider, adjust, modify the existing labor relations to have better labor relations. It also helps improve government policies and measures, mechanism relating to labor relations. After the formulation of the labor relation criteria, the Dissertation introduce a procedure to apply the criteria in the reality of enterprises. Then, the Dissertation introduce a case study as an example of how to specifically apply the criteria in reality of a specific enterprise- Dong Xuan Knitting Company (DOXIMEX). 1.4. SCOPE AND LIMITATION OF THE STUDY - The related literatures on labor relations at enterprises in Hanoi in particular, and in Vietnam in general are reviewed. - The set of labor relation criteria and the procedure for its application are formulated for all types of enterprises in Hanoi, Vietnam, - An example application of the criteria in the reality of an enterprise - Dong Xuan Knitting Company is conducted to introduce the way of criteria application. Why are Hanoi, textile & garment industry and DOXIMEX chosen? Hanoi is the capital of the Socialist Republic of Vietnam which is located in the center of North Delta. Its location has many advantages, being the focal point of 4 the roads, waterways, rails and airs which connect to provinces and locality in Vietnam and other countries. Thanks to being the national political center, Hanoi has its stably political platform, an opened and flexibly foreign economic co-operation policies and guaranteed political security and social order. Hanoi is a place where has a geographically advantageous position, being the center of economic transactions and an importantly international exchange center. Hanoi is also a city which gathers plentiful human resources and intellectuals with high-qualified scientists and management executives of the country. With these advantages, Hanoi is a place with a large business community. Employment relationship in enterprises in Hanoi is diverse and complex. The construction of harmonious, stable and advanced employment relationship in business in Hanoi helps minimize labor disputes, strikes and has a tremendous significance to stabilize and develop society and enterprises, diminish conflicts, ensure the employees‟ rights and benefits. It is considered as an important target for the employers, the employees in Hanoi to implement good labor relations in both short term and long term. - An enterprise chosen to be an empirical example of how to apply the formulated labor relation criteria in the reality of a specific company is the Dong Xuan Knitting Company (DOXIMEX) – a large in textile company . Textile industry is a key export industry, labor–intensive industry of Vietnam Traditionally, textile industry is still considered an area which has lots of volatility in labor relations because of low wages and longer time of work. In many cases, companies had the goods orders but could not produce and sell the products in time because of lacking in labor forces. The potential risk of employment relationship is unavoidable with a branch requiring a lot of workers and always having such volatility in labors. Therefore, the biggest challenge is to build harmonious 5 employment relationships. An application of a good labor relation criteria will help to measure how harmonious the labor relations at the company are? Which specific labor relation should be improved to satisfy the need of employees for a better working environment? 1.5. DEFINITION OF TERMS In this study, the most frequently used terms are criterion, criteria, collective labor arrangement, enterprise, labor contract, labor relations, negotiation, employee, employer. - Criterion Criterion is the standard of judgment or criticism, a rule or a principle used to test or to evaluate an object, including requirements for the quality, level, efficiency, capacity, compliance with rules and regulations, the final results and the sustainability of these results. - Enterprise "Enterprise means an economic organization having its own name, having assets and a stable transaction office, and having business registration in accordance with law for the purpose of conducting business operations." (Article 4, Vietnam Enterprise Code 2005) - Labor relations "Labor relations is a broad field encompassing all the myriad interchanges between employers and employees. While labor relations is most often used to discuss this exchange as it pertains to unionized employees, it may also refer to non-union employees as well. Labor relations are dictated in a large part by the government of a nation and the various regulations it provides to industry regarding the treatment of employees." 6 (http://www.wisegeek.com/what-are-labor-relations.htm) "Labour relationship is social relationship rise in processing of leasing, using labour, paying salary between employees and employers." (Article 3, Vietnam Labour Code 2012) - Employee "An employee is a person who works in the service of another person under an express or implied contract of hire, under which the employer has the right to control the details of work performance (Black's Law Dictionary). An employee is hired for a specific job or to provide labor and who works in the service of someone else (the employer). The IRS classifies a worker as an employee as follows: In general, anyone who performs services for an organization is an employee if the organization can control what will be done and how it will be done. The control question is used to determine whether a worker is an employee or an independent contractor. The factors designating someone as an employee include:  A specific wage or salary  An implied or written contract  Control of the person's work by the employer" (http://biztaxlaw.about.com/od/glossarye/g/employeedef.htm) “Employees mean persons whom are at least 15 years of age, having capacity to labor and work under a labor contract, getting paid and subject to their employers‟ monitoring and management." (Article 3, Vietnam Labour Code 2012) - Employer 7 "A legal entity that controls and directs a servant or worker under an express or implied contract of employment and pays (or is obligated to pay) him or her salary or wages in compensation". (Read more: http://www.businessdictionary.com/definition/employer.htm l#ixzz25YXwJS5S) “Employers means enterprises, agencies, organizations, co-operatives, households, individuals hiring, using labor under labor contracts; in case of individuals, such persons must be from full 18 years old and have full civil act capacity." (Article 3, Vietnam Labour Code 2012) 8 CHAPTER II REVIEW OF RELATED LITERATUES AND STUDIES 2.1. REVIEW OF RELATED STUDIES 2.1.1. 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 This book states two main research outcomes: Vietnam Trade Unions - the reality of organizing, practicing and revamping Law on Trade Unions; The foundation of basis trade unions and the relationship of higher - level trade unions and basis trade unions - reality, challenge and resolution. According with the author of the book, labour relations remain in trouble, many strikes take place in Vietnam. This practice shows a lot of troubles in organisation structure, direction as well as trade union‟s capacity in representative and collective bargaining. There have a number of factors impact clear labour relations, but in case of non - capacity of collective bargaining with the employers, there will definitely have many strikes. Therefore, that damages national benefits. The group of authors also have given anticipation about 3 developing trends of labour relations in Vietnam, include: The role of labour relations parties, particularly, the more importance of trade unions; The nature of labour relations will change accordance with market mechanism; all of the issues, such as :interests conflict between the employer and the employee, labour dispute as well as strike are in trouble. 9 2.1.2. Nguyen Tiep, “Labour relations curriculum”, 2011, Social Labour Publisher Two fundamental items written in that book are: the basis issues of labour relations and labour relations in Vietnam. According to Nguyen Tiep, labour relations are the system of relations between individuals or representative organisation of labours or representative organisation of labours with other objects as well as state. Those relations take place around process of hiring employment (the employee and the employer) to ensure harmonious and stabe benefits of the parties. According to Nguyen Tiep, there have 3 groups of labour relations objects, include: The employees and the representative organisation for their interests; the employers and the representative organisation for their interests;and the State. In these cases, the employer and the employee have bargained to each other to achieve the goal of each party, while the State establishes legal system and application methods for effective law ( it means that the two objects – the employer and the employee have respected to law). In process of state legal implement, the employer and the employee can discover the nonsense of law. They can make reflections on those things, thus help state reconsiders and adjust. Evaluating of labour relations in Vietnam, Nguyen Tiep assitsts on completing legal framework of labour relations to go with market economy and international integration. The mechanisms of representative labour relations parties are incomplete in Vietnam. The system of making reference, opinions, negotiation as well as making - decision has been in trouble. Field level and national level Collective labour agreement are yet to practice. Enterprise collective agreement has not high quality, reflect the formal feature. The employees‟s style is yet to set up on large scale. The employee‟s and the employers‟s awareness of labour law is not high. The 10 negotiation skill of the parties is limited… All the above problems has sided - effect to the development of sound and stable of labour relations in enterprises. 2.1.3. Phan Thanh Khoi, “Political awareness of workers in several enterprises in Hanoi now”, 2003, National Politics Publisher In this book, Phan Thanh Khoi has evaluated workers‟s political awareness in several enterprises in Hanoi. From Khoi point of view, state owned enterprises have trade unions, while foreign investing enterprises are yet to have that in Hanoi. Worker‟s awareness is limited. To enhance workers‟ political awareness, several methods need to do: resolving job, increasing income, training law... and the important thing to do is connecting manpower in enterprises to build and consolidate workers‟political awareness. Thank to that, labour relations in enterprises will be better. 2.1.4. Pham Quy Tho, “Labour market in Vietnam - Reality and development resolution”, 2008, Labour and Social Affairs Publisher According to the author‟s opinion, labour market is one of 5 fundamental markets in Vietnam that requires studying. Thus, the author has analysed the foundation and development of labour relations in Vietnam, assessed good side and sided-effect of labour relations development process to social economic development in Vietnam. Then, Pham Quy Tho gives propose for direction and development resolution labour market in years to come. Pham Quy Tho contends that, labour relations (the employees and the employers) are one of the key issues in the foundation and the development of labour market process in our nation. Thus, developing labour market needs to be based on harmony of the employees and the employers‟ benefits as well as limiting unemployment, ensuring social welfare step by step. 11 2.1.5. Ministry of Training and Education, “Some issues of labour relations in private enterprises and an enterprise with foreign owed capital during Vietnam transition economy period”, 2004, Education Publisher This book regards to labour relations in two kinds of enterprises: private enterprises and an enterprise with foreign owned capital. The authors of the book study about the above enterprises‟ labour relations during Vietnam economy shift period. In association with the authors, owing to the difference between the owner and investment sources that leads to the labour relations of private enterprise and an enterprise with foreign owned capital are differente. The reason is that there are the differences of cultures, languages of the labour relations‟ parties. Simultaneously, high working level as well as working time also lead to labour disputes. 2.1.6. Trade Unions and worker department, “ Reporting surveys on reality of an enterprise with foreign owned capital‟s labour relations”, 2007 The report gives survey on labour relations in 60 FDI enterprises in Ho Chi Minh city, Dong Nai, Binh Duong, Ba Ria - Vung Tau, Hanoi, Vinh Phuc, Bac Ninh, Hai Duong. The authors of report regard that the most weakness in labour relations conflict shows it is unstable, unsympathetic towards with enterprises in trouble. Those authors target the aim for building enterprises‟ labour relations is establishing progressive, harmonious, stable labour relations as well as ensuring benefits of the employers, enterprises and society. 2.1.7. Do Quynh Chi, “The role of the employers in renewal process of labour relations system - reality, challenges and chances”, 2010 According to the employers‟perspectives on labour relations, Do Quynh Chi gives main issues on the general in the research. She believes that mechanism for 12