Research labor relations in JSCs in Hanoi city

In the forthcoming time, the number of enterprises and workers will continue to increase, directly affecting the city’s labor relations; Joint Stock Company JSC is the most popular kind

PREAMBLE

1 Urgency of topic research

The reality has affirmed that human is an important and decisive source as well

as a sustainable factor in all organizations; Where Labor Relations have a balance of interests, respect, support and cooperation between entities, this is called healthy relations Up to 31/12/2013, there were about 147.000 enterprises and approx 1.762.600 workers employed in kinds of enterprise [32, 33] in Hanoi In the forthcoming time, the number of enterprises and workers will continue to increase, directly affecting the city’s labor relations; Joint Stock Company (JSC) is the most popular kind of enterprise in the market economy, the number of new establishments rises sharply; in particular, there were 9660 JSCs in the whole country in 2006 As of

2012, the number of JSCs were 129066[33], while enterprises located in Hanoi accounted for a significant proportion, in particular, up to 31/12/2013 there were about 37.217 JSCs in Hanoi The management and use of human resources hasn’t been effective Up to now, thousands of strikes and lockouts took place in Vietnam, particularly in Hanoi there were 110 lockouts from 2008 to 2013 90% of which happened in industrial zones and export processing zones [18] The Secretariat of the Central Party promulgated the Directives No 22-CT/TW (dated 05/06/2008) on

“Strengthen monitoring the formation of labor relations in friendly, stable and progressive environment”; Make such labor relations will contribute to create a healthy and stable environment for business and investment Therefore, I choose the

topic of “Research labor relations in JSCs in Hanoi city” as my doctoral thesis

2 Purposes and task of research

The thesis’s purposes of research consist of: Based on systemizing and developing several basic theoretical issues about labor relations in enterprises and evaluating the real status of labor relations in JSCs in Hanoi during the last time, the thesis suggest some synchronistic solutions to improve labor relations in JSCs in Hanoi in the forthcoming time

In order to achieve the research goals of the thesis above, the task of research consist of: (1)Systemize and develop several basic theoretical issues about labor relations in enterprises; (2) Research experience in managing labor relations of some countries in the world; (3) Evaluate the real status and factors affecting labor relations

in JSCs in Hanoi; (4) Suggest some solutions to improve labor relations in JSCs in Hanoi in the forthcoming time

3 Object and scope of research

3.1 Object of research

The object of research is labor relations in JSCs in Hanoi This is labor

relations at enterprise level in the market economy

3.2 Scope of research

- For space: Subject of research is JSCs in Hanoi city, including those

privatized from the State-owned enterprises (the State holds <51% capital) and a JSC

is formed according to the Law on Enterprises

- For time: The figures included in the thesis to research and analyze, mainly collected from 2006 to 2013

- For research contents: The topic focuses on basic issues to form an level system of labor relations

enterprise-4 Model and method of research

4.1 Model of research

In order to achieve the research goals of the thesis, the author generalized into the model of research

4.2 Method of research

The thesis applied the methods of dialectical materialism and historical

materialism Other methods include analysis, synthesis, comparison, sociological survey, expert interview

5 Overview of research situation

In practice, many internal and external works mentioned labor relations issue

In the world, there are several works including: “Reading in labor economics

and labor relations” by Lloyd G.Reynold Stanley Master, Colletta H Moser., Prentice Hall (1986) Publishing House "Labor relations: Striking a balance” by John W.Budd (2005), etc In particular, the author mentioned labor relations at the most general level

In Vietnam, there are many works about labor relations, such as: “Labor

relations and labor dispute settlement in Vietnam”, Dr Chang Hee Lee (2006);

“Labor relations in international economic integration”, Dr Le Thanh Ha (2008) These authors mentioned innovation of labor relations, generalizing some basic issues and subjects of labor relations Also, many doctoral theses studied this issue: Authors Nguyen Thi Minh Nhan (2010), Nguyen Duy Phuc (2011) Those thesis studied labor relations systematically However, each thesis delved into a separate field and different subjects

In general, many works about labor relations were conducted, concentrated at either a common aspect or various kinds of enterprises However, neither work has methodically studied on labor relations in JSCs in Hanoi until now Thus, the thesis found something new and didn’t coincide with already-published works

6 Theoretical and practical significance of the research topic

In theoretical aspect: Systemize and clarify several basic theoretical issues of enterprise-level labor relations

In practical aspect: The author analyzed, evaluated the real situation of labor relations in JSCs in Hanoi; indicated limitations in labor relations and underlying causes; put forth viewpoints and solutions for improving labor relations in JSCs in Hanoi by 2020

7 Structure of the thesis

Apart from the preamble, conclusion, annexes and references, the thesis

includes three main chapters: Chapter 1: Basic theories of labor relations in JSCs; Chapter 2: Analysis of the situation of labor relations in JSCs in Hanoi in the recent period; Chapter 3: Solutions to complete labor relations in JSCs in Hanoi during the period until 2020

Chapter 1: BASIC THEORIES OF LABOR RELATIONS IN JSCS

1.1 SOME BASIC DEFINITIONS

1.1.1 Definitions of Company, Joint Stock Company (JSC)

1.1.1.1 Definition of Company

According to the Vietnamese Dictionary, Company is a business organization formed by members who contribute capital and share profits or losses corresponding

to their equity [41, 285]

1.1.1.2 Definition of Joint Stock Company (JSC)

According to the Vietnamese Dictionary, JSC is a company incorporated by shareholders in the form of share purchase [37, 285] Under Article 4, Clause 11 of Law on Enterprises (2005), a shareholder is a person who owns at least one share issued by JSC

JSC is a legal entity with limited liability, established and existed independently from the owners

1.1.2 Definition of labor relations

Labor relations are a broad and complicated category For the thesis’s purposes, the author focuses on studying labor relations at enterprise level, so it is defined in this the thesis as follows:

Enterprise-level labor relations are the relationship between employers and employees formed during their communication (or their representative organizations)

in an enterprise This interactive system usually takes place when the two parties cooperate to work together to obtain their personal benefits and the enterprise’s general objectives Such relationship has been set up and operated within the framework of the State law

1.1.3 Characteristics of labor relations in JSCs

Labor relations in JSCs are characterized by those of enterprise-level labor relations Including: be of economics and society; be of contradictions and unity; be

of individual and collective; be of equality and inequality

However, labor relations in JSCs have different characteristics from those in

other kinds of enterprises First, labor relations in JSCs are of economics more than

of society; Second, JSCs are considerably dependent on subjects, especially employers Representative (or specifically) is the Executive Board; Third, labor

relations in JSCs are of individual and collective, but imbued with personal stamp

1.2.BASIC COMPONENTS OF LABOR RELATIONS IN ENTERPRISE

1.2.1 Subjects of labor relations

There are three main components involved in this relationship (1) Employees and their representative organizations (union, trade union); (2) Employers (Boss) and their representative organizations (employer association ); (3) The State

1.2.1.1 Employees and their representative organizations

The employee refers to people involved in a labor contract that they are obliged

to perform a certain job, equipped with physical means and received an amount as agreed in conformity with the laws

Union is an organization representing employees in terms of labor relations, with formal structure and clear objectives The main function of the Union is to protect legal and legitimate representative of employees

1.2.1.2 Employers and their representative organizations

In general, the employer refers to the legal representative of an organization An enterprise has the right to recruit, use, and dismiss employees It is the subject who directly signs a labor contract with employees

Employer association (representing employers) was formed and operated by members’ contributed capital It takes the responsibility to protect the rights of its

members and help occupational training and have a dialogue with the State

1.2.2 Interactive mechanism of labor relations

1.2.2.1 Definition of interactive mechanism of labor relations

Within the scope of this thesis, the author defined that: “Interactive mechanism

of labor relations refers to all rules, regulations, procedures and processes regulating the movement and interaction between subjects, formulated scientifically and observed regularly to achieve the common goals of an enterprise”

The interactive mechanism of labor relations is shown through bilateral and trilateral mechanisms However, within the scope of the thesis, the author only focused on analyzing the bilateral mechanism of labor relations

1.2.2.2 Bilateral mechanism

ILO defines that: Bilateral mechanism is any process that cooperative

arrangement between employers and employees (or their representative organizations) is directly formed, encouraged and approved [13]

In developing countries, the State usually intervenes deeper and much more on internal issues of an enterprise

Issues solved by bilateral mechanism in an enterprise are often working conditions and included in personnel policy

1.2.3 Interactive forms of labor relations

1.2.3.1 Dialogue

In an enterprise, dialogue refers to the process of discussion, negotiation and views exchange between subjects’ representatives in labor relations on mutual concerns about personnel policy

There are two ways of dialogue, including direct and indirect dialogues They may be performed by three main activities: exchange of information, consultation/ advice and negotiation

ILO defines that negotiation is a process that two or more parties with mutual

interests and conflicting ones together make a discussion to reach a joint agreement [13]

1.2.3.2 Labor dispute

The Vietnamese Labor Code amended in 2002 stipulates that: “Labor dispute is

a dispute about rights, obligations and interests arising between parties in labor relations”[3]

In fact, all disagreements between subjects of labor relations aren’t considered a labor dispute

In an enterprise, labor dispute includes a personal disagreement between employers and employees and a collective one between labor collectives and employers

1.3 FACTORS AFFECTING LABOR RELATIONS IN JSCS

Factors affecting labor relations in JSCs are divided into 2 groups: objective and subjective factors

1.3.1 Objective factors

1.3.1.1 Law on labor relations

The consistency and transparency of the State’s laws and policies will strongly motivate healthy labor relations between parties in an enterprise

1.3.1.2 Socio-cultural conditions

Values, ethics, beliefs, traditions, customs, living habits of the community in each area are different In an enterprise, there are many interactions between individuals and groups, creating a close and unified relationship or vice versa

1.3.1.5 Labor market

Labor market is “the land” causing an interaction on labor relations If it develops incompletely, many conflicts will happen, creating unexpected events in labor relations of an enterprise

1.3.1.6 Labor reconciliation, inspection, arbitration, court

Good reconciliation shall promote mutual understanding in labor relations; effective arbitration shall determine “faults” of parties objectively and fairly, any dispute shall be settled quickly; strict inspection shall prevent law violations; Effective court shall reduce large-scale labor disputes

1.3.2.3 Business culture

Business culture includes the whole cultural values built during existence and development, governing emotion, way of thinking and behaviors of all members in an enterprise It also decides the survival of an enterprise, contributing to create harmonious labor relations

1.3.2.4 Scale of enterprise

Scale of enterprise affects the personnel policy and business culture and labor relations

1.3.2.5 Scope of business

Scope of business affects the agreements between subjects in labor relations

1.3.2.6 Awareness of subjects in labor relations

The awareness of the State is the basis of building legal corridor and developed policies; When both employees and employers who are aware of benefit values from harmonious labor relations will easily agreed upon, unanimity; When the awareness

is of different levels, the prevention of benefit can hardly avoid

1.4 EXPERIENCE IN BUILDING A SYSTEM OF LABOR RELATIONS OF SEVERAL COUNTRIES AND LEARNT LESSONS POSSIBLY APPLIED IN VIETNAM

1.4.1 Experience of several countries in the world

For this part, the author studied experience of some countries: US, China, Japan and some European countries

1.4.2 Learnt lessons possibly applied in Vietnam

Labor relations are always based on solid legal foundation Labor relations have general principles, but each country must adjust to fit their conditions; the State must closely coordinate with representative organizations for employers and employees; both of them learnt experience of negotiation and signing for collective labor agreements, and advanced personnel policies from European countries and US; Japanese companies build and maintain the consistent working spirit, sense of discipline and absolute loyalty of employees; Chinese companies build a standard system of labor relations adjusted and improved regularly

Chapter 2: ANALYSIS OF THE SITUATION OF LABOR RELATIONS IN

JSCS IN HANOI 2.1 OVERVIEW OF HANOI AND DEVELOPMENT TREND OF

ENTERPRISE TYPES

2.1.1 The development situation of Hanoi’s economy and society

Hanoi is the capital- the center for the politics, society and economics of the whole country Hanoi is the city with the largest labor scale of the country; with the favorable geographical position, high economic growth, high population, abundant human resources, Hanoi has great potential to be exploited effectively

2.1.2 The development trend of the enterprise types in the past time

2.1.2.1 In term of the quantity

In 2006, Ha Noi had 22856 enterprises, which had grown up to 84744 enterprises in 2013, inside JSCs without state capital have increased strongly from

6751 enterprises to 36656 enterprises The opposite, State enterprises has decreased because of the state`s policy about equitisation and transfer of enterprise type Although JSCs have increased fastly, speed of increasing is still slower than the type

of limited company While private enterprises had trend to decrease This is a reasonable trending of market economy because founder determined clearly authorities and separation of obligations in personal asset management and legal assets

2.1.2.2 Structure of JSCs in Hanoi

The scope of activities of the joint stock company developed much diversified; the interdisciplinary business accounted for a large proportion However, it focuses mainly on some sectors such as: Trade, hotel, restaurant and some other services… JSCs in Hanoi are mostly small and medium enterprises with average capital about 3,6 billion/enterprise; the number of labor is used few, average labor achieved only 23,2 person/enterprise; average productive value of JSCs in Hanoi is very low in comparison with common average productive value in enterprises

2.1.2.3 In term of enterprise types

JSC is considered as a enterprise with modern management model, which can provide the opportunity to expand their ability to attract investment from outside and unlimited development The number of the joint stock stocks tends to increase every year

2.2 ANALYSIS ON THE REAL SITUATION OF LABOR RELATION IN JSCs IN HANOI

2.2.1 Analysis on the labor relation subjects of JSCs in Hanoi

2.2.1.1 The employee and representative institutions in JSCs in Hanoi

in Ha Noi was assessed at the average level of the capacity; the employee’s legal knowledge is limited, so they have not been trained their career as well as education, education on labor law before entering the work; (3) The level of workmanship is limited, there has not had industrial working style and spirit of discipline; (4) the employee is excitable, uncaring and especially their thought is not associated with the enterprise; (5) They pay little attention to other personnel policies of the company

* Representative institution of the employees (local trade union)

Currently, the city has 2,634 local trade unions in enterprises; particularly the private sector has 2,226 trade unions with 120,217 members JSCs in Hanoi with trade unions, 100% of the trade unions have established freely and employees participating in this institution are voluntary According to the actual results of the investigation of the author, the assessment of the employees on the local trade unions

in their enterprises have been some remarks as follows: (l) The operation of trade unions is assessed at the average, JSCs established under the Law on Enterprise operates less (2) The power of team work in the trade unions is not qualified and mainly work experience bladder habits; (3) The training and professional coach remains fragmented, not synchronous and effective; (4) Many companies established trade unions as a formality The role of trade unions for the employees primarily reflected in the surface, no the depth, many important tasks are not focused In core activities to establish and operate healthy labor relation in enterprise, the role of trade unions is relatively modest

of human governance The control of the operating system is not good, coupled with the low hierarchy; (5) in the treatment of the employee and their representative organizations, they are seeking to evade the implementation of the regime, service and imposing the management measures in no consistent with the law

2.2.2 Analysis on the interactive mechanism of the labor relation in JSCs in Hanoi

The interactive mechanism of the labor relation in JSCs in Hanoi is currently the current bilateral mechanisms and mainly in the form of: direct negotiation between employees and employers; collective negotiation between the employee’s representative and employer’s representatives; implement collective labor agreement and resolve conflicts

Through analysis on the statistics and survey results by the author, The thesis was evaluated through the operation of the labor relation in particular aspects of the

labor relation and give some comments: (1) In terms of the labor contract: there are still restrictions on the forms, contents, subjects signed the contract; (2) In terms of

salary: Most of these enterprises have clear salary payment regulations, no violations

of the minimum salary as prescribed by the law But the salary level is not corresponding to the labor value the employee contributed; The salary payment work

of these enterprises are not really fair, clear, easy to understand; (3) In terms of social

insurance, health insurance: This is a very big limitations of JSCs in Ha Noi For

examples: The enterprises does not voluntarily participate; Many enterprises own the large amount of debt; Salary and wage payments for social insurance is not exactly

popular with the reality; (4) In terms of labor safety: labor accidents have increased

The SMEs have not yet been implemented professionally; The condition of the

employee’s occupational disease also tend to rise;

Through the above aspects showed many favorable factors in the bilateral mechanism in the labor relation in JSCs in Hanoi

2.2.3 Analysis on the interactive form of the labor relation in JSCs in Hanoi

2.2.3.1 The social dialogue

The forms of social dialogue used by JSCs in Hanoi may include: Overall meeting with the participation of employees, holding periodic meeting between the employee and the employer, making comment box of the employees’ consultation, LAN construction, publishing internal newsletters, organizing congresses of workers and employees, negotiating to sign collective labor agreement

The main contents of the dialogue of JSCs in Hanoi are on some issues: salaries, bonuses, allowances, insurance and working conditions The dialogue taking place is when building the remuneration policy or when there are conflicts concerning the interests of the both entities in the labor relation

Towards the authorities of Hanoi also participated in the organization of some dialogue activities for firms, enterprise associate and employees However, the frequency and effectiveness of these activities are not high

of employees and employers, it is often subject to the impact, the effects of the employer in order to meet customer requirements of the import or meet the management requirements of the employer

2.2.3.3 Labor dispute

Since 2008, the strikes in Hanoi have occurred less than the provinces and major cities have a lot of company, which is more moderate than before 2007 The reason why is due to the disagreements between the employee and the employer on the salary issues, bonus, working time, rest time, social insurance, working conditions, the way of the behavior,…

In recent years, the labor disputes occurred in the city have increased, mainly disputes on rights and benefits The time of the occurrence of labor disputes in the

cycle of first quarter and second quarter of each year because this is a sensitive time

in two years The nature of labor disputes are also many changes in recent years, the dispute over wages and incomes nature wages, welfare, social insurance, compensation for damages has been increasing Of which, the overwhelming majority is the individual labor disputes The above results show the nature and content of labor disputes is increasingly complex and intense That partly reflects the change of the “quality” of the labor relation

2.3 ANALYSIS ON THE REAL SITUATION OF THE FACTORS AFFECTING THE LABOR RELATION IN JSCS IN HANOI

2.3.1 Objective factors

2.3.1.1 Law on the labor relation

Labor Code in 2012 revised with new features have created important legal framework for the development of the labor relation with the healthy Enclosed with the Law, the Government issued more 30 decrees, MOLISA, the related authorities has issued 70 circulars guiding the execution However, there are still quite a lot of basic rules of labor relation that have not been instructed to perform Not fully create homogeneous legal foundations, promote self-regulating ability of labor relation; Institutions supporting the two parties in labor relation in order to strengthen the abilities of dialogue and negotiation have not promoted the results The legal framework for the representative organizations to form and operate is still inadequate; Trade Union Law was issued long time ago, no longer in accordance with the reality The propagation and dissemination of labor law have many shortcomings; the inspection, examination and supervision of law enforcement of labor relation have not satisfied requirements; the State Administration on labor relation has not focused

on one focal point; the Consultation mechanisms have not strong enough and not par with the development; Both the employees and the employers have knowledge of the law on management and use of labor at low level Employees have no sense in studying and learning to get knowledge about this field

2.3.1.2 Cultural - social conditions

This is a vantage point affecting labor relation of JSCs in Hanoi In this section, the author has documented and analyzed to point out the aspects of social life with favorable changes such as: educational level, social labor division, welfare and social welfare, employment policies, vocational training have achieved positive results The above results have a positive impact in creating the development environment of corporate culture, creating a foundation for the emergence and development of