Các tiêu chí của quan hệ lao động trong doanh nghiệp ở hà nội, việt nam

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

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

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

Supervisor: Associate Professor Dr TRẦN CHÍ THIỆN

Thainguyen University of Economics and Business Administration

(TUEBA)

TNU-SLSU, 2013

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

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

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

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

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

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

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

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?

- 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

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

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."

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

"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)

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

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

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

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

labour relations at enterprises are ineffective in Vietnam The employers do not care and take part in process of labour relations in Vietnam From Chi‟s view point, it is necessary to have new model of labour relations in Vietnam This model need to be build based on old foundation and derived from basis experiment in enterprises and locals Therefore, Do Quynh Chi gives some of ways to do experiments She also recommend that, those experiments need to study, analyse and put in policy talks due

to it is a piece of huge parts which set up new labour relations in the future

2.1.8 Nguyen Van Binh, “Enhancing and ensuring indipendance,

representative of trade unions to join process of labour relations effectively”, 2010

In association with Nguyen Van Binh, the harmonious and stable development

of labour relations depend on many factors However, in his report, he does not refer

to all factors but issues on labour relations legal frame, particular in trade unions rules

in labour relations

From the above report, Nguyen Van Binh discussed issues on organizing trade unions, particular in: how the law can help trade unions become the real representative organization for the employees; from that, trade unions take part in process of labour relations really and effectively; therefore, taking part in building harmonious, stable, progressive labour relations

2.1.9 VCCI, "Labour issues from the employers' perspective, Survey on

labour in textile - garment industry in 2009"

This research shows textile - garment is one of the most labour relations strongest developing fields in recent years Owing to labour interchange, there are a rising trend of labour disputes, unprompted strikes The state has given several solutions to control labour relations, such as encouraging bargaining and signing collective labour agreement at enterprises as well as branches‟ level, enhancing

negotiation between the employers and the employees at the enterprises However, how the labour relations sound or not depend on each enterprise‟s effort

The authors of this research analyse results of surveys on 4 aspects in enterprises‟ labour relations: collective labour agreement, mechanism for dialogue, resolution to appeal, strikes and labour disputes The group have shown the connection with those 4 aspects to each other and labour relations situation at enterprises

2.1.10 Michael Salamon, "Industrial Relations - Theory and practice", 4th

Edition/ Pretice Hall

In this book, the author contend that labour relations embrace a series of phenomena, the inside and outside at working place, referring to confirmation and adjusting employment relationship

According to Micheal Salamon, labour relations is changeable and complicated social activity Labour relations is done by a diverse structure of relationship and impact (individuals and collectivity) inside and outside of organisation, directly target to rule on employment relationship

He also recommends that it is necessary to respect labour relations in an organisation This relationship ought to consider and understand in changeable and wider social, politics, economy situation The developing employment relationship currently need attach to commercial and economics globalism

2.1.11 Chang - Hee Lee and Simon Clarke, “ Strikes and labour relations

in Vietnam”, 2011

In this discussion, the authors reconsider strike adjusting system in total labour relatons situation From that, they confirm policies can help tri-parties building new legal frame for strikes

There are 4 main items were referred to, including: kinds of strikes and the reason for strikes, the nature of strikes in Vietnam; Law on srikes; forms of trade unions labour representative; some issues on policies for creating suitable environment aiming for stop labour disputes and building sound labour relations in enterprises

2.1.12 John W Budd, University of Minnesota, "Labor Relations: Striking

a Balance", 2008, McGraw-Hill Irwin Publisher

This book is structured around four parts

Part I provides a framework for thinking about the major themes for studying labor relations The objectives of the employment relationship are presented in this chapter In Chapter 2, four different views of labor unions in the employment relationship are presented from the perspectives of neoclassical economics, human resource management, industrial relations, and critical (or radical or Marxist) industrial relations The industrial relations viewpoint shapes the existing U.S policies on collective bargaining, so a thorough understanding of this school of thought is essential, and this understanding is best achieved through contrasts with the other three schools Lastly, understanding labor relations requires understanding the determinants of labor relations outcomes-why do workers unionize (or not)? Why do firms invest in nonunion locations (or not)? Chapter 3 therefore explores the major factors that determine labor relations outcomes, including ethics These chapters provide the foundation for the remainder of the book

Part II focuses on the New Deal industrial relations system-today‟s U.S labor relations system The important topics are this system‟s historical development (Chapter 4), labor law (Chapter 5), the strategies, structures, and conflicting rights of labor and management (Chapter 6), how unions are formed (Chapter 7), how contracts

are negotiated (Chapter 8), how bargaining disputes are resolved (Chapter 9), and how grievances over the application of the contracts are resolved (Chapter 10) The thorniest problems of labor relations are those in which efficiency, equity, and voice conflict with each other As described in Chapter 6, these conflicts are often clashes between property rights and labor rights Striking a balance between labor rights and property rights is a major task of labor relations, and the processes described in Part II are the existing U.S institutional framework for trying to balance property rights and labor rights On a practical level, a thorough understanding of these processes is necessary to be an effective management professional or labor advocate

Part III focuses on three issues that are putting particular strain on the New Deal industrial relations system in the 21st century: employee involvement, workplace flexibility, and globalization These three pressures are discussed in Chapters 11 and 12 These are important issues for business, policy makers, and labor unions and also reflect struggles with efficiency, equity, and voice and trying to strike

a balance between labor rights and property rights Consequently, these issues are critical for both policy and practice The goals of Parts I–III are to develop a deep understanding of the current state of U.S labor relations-its goals, major processes, and current pressures But many individuals from nearly every viewpoint-pro-business or pro-union, liberal or conservative, Republican or Democrat, academic or practitioner-have called for reform of the existing U.S labor relations system

Thus, Part IV reflects on this current state of affairs and future options for reform Other countries wrestle with the same goal of balancing efficiency, equity, and voice and Chapter 13 presents some major comparative examples of different labor relations systems In a global economy, it is important to understand how things work in other countries to be a better manager or labor leader, but there are also

lessons for reflection and reform Chapter 14 returns to the starting question: What should labor relations do? What should labor relations seek to accomplish? And in light of the material in Parts I-III, what reforms are needed-in union strategies, corporate strategies, and labor law? This concluding chapter therefore integrates the past lessons with directions for the future As conditioned by both the external environment (laws, economic trends, social norms, and the like) and individual decision making (motivation, attitudes, ethics, and other influences), labor and management strategies and structures are determined, and outcomes result Important outcomes include worker reactions to workplace injustice-including whether or not to unionize, contract terms, strikes, grievances, firm performance, and employment trends The elements of this model are explored in greater detail in Chapter 3 The goals, strategies, processes, and outcomes of the New Deal industrial relations system are a product of a particular institutional environment which is the focus of Part II Part III analyzes two big changes in the environment and Part IV questions how the environment can be structured to produce desired outcomes in the future But it all starts with the objectives of the employment relationship

2.1.13 John Dunlop, "Industrial Relations Systems", 1958

Dunlop contend that labour relations are the system include 3 subjects: management organizations, the employers and representative of state

Those people and their organization exists in collaboration with the outside environment (include: technology environment, labour environment, goods environment, politics environment…)

Environment factors can direct and indirect affect to subjects

In that environment, subjects can collaborate with each other, negotiate, and use economical, political powers to identify rules and regulations

The rules and regulations are considered as the output product of labour relations process Therefore, the core of this model is the meeting to build common value systems that is basement for finding common solution and give the decision based on agreement

2.1.14 Thomas A Kochan, Robert B.McKersie and Peter Cappelli,

"Strategie choice and industrial relations theory", 1984

Thomas A Kochan, Robert B.McKersie and Peter Cappelli think that labour relations need to be put in general production system

Therefore, to target the goal, a business need build and choose suitable strategy model in labour relations for itself In that model, trade union business (basement trade union) as the centre factor

A business can choose one of three strategy models about trade union, that is:

- Considering trade union is the person who has the benefits closely connect to workers, finding the way of fighting to help workers have the bigger benefits Therefore, business needs try its best to maintain the status without trade union

- Trade union is the organization of worker In case of business controling its trade union, that can limit workers‟fight Therefore, strategy helps trade union exists and close control and limit the effect of trade union on workers

- Considering trade union is good-side factor and friends of businesses and workers

A chosen strategy will have several corresponding policies in following table:

The outside factors

- Legal and political

Target

Ways

1 Without trade union

2 Weaken and minimum the trade union‟s strength

3 Accept and consider trade union as a positive factor of business

Figure 2.2: Kochan’s Strategy selection model in labour relations

Table 2.1: Strategy on labour relations and corresponding policies

Accept trade union

and consider that is

trusted partner

- Regularly and careful prepare for bargaining

- Periodical collective bargaining

- Supervising collective labour agreement together

- Setting up union two parties representatives

- Maintaining co-operating to find solutions whenever problem arises

Weakening trade

union

- Attack directly to lose trade union‟s prestige

- Changing technology and using outside doing

- Closing factories where trade union‟s successful doing

- Building factories where trade union‟s dull doing

Maintaining status

without trade union

- Investigating officers‟ options regularly

- Setting up effective domestic communication

- Pay salary according to level and capacity

- Applying encourage mechanism on business management (quality group, semi – self-management group…)

2.1.15 Andre Petit, "Labour relations", 1985

Petit thinks that labour relations is a system He strongly commend that the corresponding affect between inside and outside environment factors of business to that system

He describes labour relations as an active system, the employers (trade union) and the employees are two subjects have the conflict benefits and they always fight to

each other to gain bigger benefits That dispute is unavoidable The labour relations in business will stable if two forces maintain balance To do that, business trade union needs to consolidate and result of that is the solidary strong hold the employees help them to face with the employers

2.2 THEORETICAL FRAMEWORK

2.2 THEORETICAL FRAMEWORK

2.2.1 The concept of labor relation

* The concept of labor relation

Labor relation was formed along with the process of hiring laborers Since its establishment, it has been studied by a great deal of scientists

Input Activities Output

- Legal regulation

- Sources and means that each party has got

- Problems need to do

- Each party‟s interaction

of power

- Collective bargaining

- Self- conciliation

- Mediate conciliation

- Dispute, strike, close factory

- Conflict resolution

- Resolution

on requirement

- Contact to the emloyees

or trade union‟s members

- Satisfield of each party

- Peaceful or intensive atmosphere at working place

- Special working conditions

- Working effectiveness

- Doing effectiveness

According to Dun lop J.T (1958), labor relation can be considered a logical system as an economic system in industrial society

According to Grant and Malette, labor relation is defined as the harmony relationship of individuals and groups in an industrial organization

According to Loic Cadin: labor relation refers to a set of rules and policies constituting to the actual relationship between employers and employees with the adjustment and legal intervention of state in a business, an industry, a region or a country

According to the International Labor Organization, labor relation is the relationship between employers and employees in the workplace, as well as the relationship between their representatives and the state Those relationships revolve around all aspects of life, including law, economics, sociology and psychology, and relate to issues such as recruitment, hiring, work arrangements, training, discipline, promotion officials, dismissal, contract termination, overtime, bonuses, profit sharing, education, health, sanitation, recreation, accommodation, working hours, rest, the problem welfare for the unemployed, sick, accident, old age and disability

According to Nguyen Tiep, labor relation is the system of relationships between individuals or representatives of workers with representatives of employers,

or between organizations representing them with the state and other entities The relationships take place in the process of hiring labor (between employers and employees) to ensure harmony and stability in the interests of stakeholders

Although there are many different approaches to labor relation, in general all scientists agree on the following points:

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- Labor relation is the system of relations between employers and employees

It is quite complicated It is a component of business systems of the enterprise or

socio-economic system of the country

- It is subjected to legal adjustment and the direct intervention of the state (as

needed) This interference aims to reconcile the relationship between workers and

employers, to protect national interests as well as the entire society

- It takes place within an enterprise or beyond the scope of business and

becomes relationships within industry sector or in society

Labor relation is a multi-sector definition lying in the interference of various

fields such as history, economics, society, politics, law Thus, studying labor relation

demands to use the comprehensive knowledge of all those scientific fields

2.2.2 The properties of the labor relations

* Labor relation involve both economic aspect and the social aspect

- The economics aspect of labor relations::

Society relation

Law relation

Economics

relation

Labor relation

Figure 2.4: Labor relations, the interference of the relations

First, labor relation is governed by interests, including economic benefits (wages and profits) Every worker has a purpose of getting adequate wages As for employers, profit is the fundamental motivation

Second, labor relation is the relationship between owners of labor to capital owners These are the two main factors of social production Thus, the more stable labor relation is, the higher labor productivity and economic growth are

Third, labor relation affects the production of social wealth Most of the wealth of society is made from manufacturing It is the product of the relationship between workers and employers

- The social aspect of labor relation:

First, it is the relationship between people so it acquires to satisfy the needs of the human spirit

Second, workers and employers are required to meet at work Workers should

be protected and respected as other members of society

Third, it involves many people in society and has indirect effects on the lives

of individuals in society Employees are often key members of the family Therefore, the stability of labor relations brings joy to them and their families

* Labor relations have both uniformity and contradiction

- The uniformity:

Without the cooperation of one party, the other party will not achieve the objectives and their interests If the interests of workers are guaranteed, the production will be stable, labor productivity will be high and the profits of the enterprise will increase

- The contradiction:

Wages expenses account for large proportion of production costs If these costs increase, the profits of the employer will reduce and vice versa

At the same time, workers and employers are different the positions so it is difficult for both parties to share spiritual benefits This difference can lead to conflicts and disputes

* Labor relations is both equal and unequal

- The equality:

The parties in the relationship participate voluntarily and no one can force them to join If both parties fail to cooperate, the employment relationship is not formed If one party is not satisfied, they may refuse or terminate the relationship

- The inequality:

If labor supply is greater than labor demand, the laborers take weaker position than employers On the other hand, the employer shall have the power to control their workers by the authority (power management, administration, arrangement, reward, discipline ) so they can apply unequal conditions Besides, state (a special subject of labor relation) has the right to impose laws forcing the parties of labor relation to implement

* Labor relation reflects both individual and collective aspect

- The individual aspects:

Relations between individuals in enterprises are the core of labor relations They dominate personal interests of each party The labor contract is signed between individual workers with employers

- The collective aspect:

Labor activity is usually taken by a group of labor, so 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 of respect

Respect in employment relationship is the basis for cooperation Respect will make all parties feel comfortable, confident, stimulating creative activities Where there is respect, there is the foundation of harmonious labor relations That is the key

to the success of the business

The respect is demonstrated in listening, sharing information, joining, deciding together between employers and employees All parties need to behave with humility, fairness, respect and dignity with each other

When all parties, especially employer show respect with the others, they have created culture working environments and closer labor relationship Since then, the employees will have positive attitude and responsibility towards tasks assigned Employees will be more engaged with the business

In progress society, principle of respect is considered a cultural norm of the employment relationship

- Coordinating activities, including information sharing and consultation, decision making in accordance with common interests, negotiating collective bargaining agreements

- Creating favorable conditions for work; workers have a positive attitude and work with responsibility, respect labor discipline, keep business secrets, protect assets

- The parties altogether solve problems: two sides regularly exchange information to understand the difficulties and advantages of each other

* Principle of negotiation

- Negotiation helps the parties to balance benefits and limit dissent, making harmony labor relation Through negotiations, the parties can enhance mutual understanding and reduce conflict When there is conflict, negotiation is an important way to solve disputes quickly in peace and efficiency

Negotiation often exists in building collective labor agreements, adjustment of wages, working time, seeking to resolve disputes

Negotiation can be conducted at many levels: the enterprise level, industry level, national level

2.2.4 The subjects of labor relations

3 groups of subjects of labor relations are: the employees and organizations representing their interests, employer organizations representing their interests, the State

In this relationship, the employee and the employer shall negotiate with others

to achieve goals of each party The state set legal framework and effective application

of legal measures

During the implementation of state laws, workers and employers who detect unreasonable and inappropriate point can respond to state so that the authorities will review and adjust in time

* The employee

Employees are those participating in the labor contract under which they must perform a certain job They are provided the necessary material means to work and receive a certain amount salary as agreed in the contract

The

employee

The employer

The State

Regulate, instruct, control

Respond

Regulate, instruct, controlRespond

Negotiation Labor contract, The collective labor agreement

Figure 2.5: Subjects of the labor relations

(Source: Nguyen Tiep, “Labour relations curriculum”, 2011, Social Labour Publish)

The employees have following features:

- As sellers of labor power by a voluntary agreement between them and the buyers of labor power

- They have no means of production, instead they use the producing materials

of employers

- The legal basis to determine the employee is labor contracts

* Organizations representing workers

- Representatives of the employees may be individuals or organizations, may work seasonally or regularly

- Individuals: as a representative, usually under the incident, often applied to small groups of workers or in business without a union

- The authorized agency: such as consulting firms or law offices authorized by the workers to represent in a particular case

- Board of Representatives (or council employees): elected by the workers in enterprises The board will represent employees in the enterprise to settle matters with the employer

- Trade Union: a special and highly organized type of representation The structure of the union has many levels, in which the lowest level is in entities (referred

as unit trade unions)

In Vietnam, Trade Union is organized into four levels:

+ National Level: Vietnam General Confederation of Labor

+ Provincial level: Provincial Federation of Labor, Union of sector and union

of state corporations

+ District: The district labor union, the union of export processing zones + At the enterprise: unit trade union

* The employer

Employers are the ones hiring workers and do certain jobs They are responsible for providing working tools and paying adequate salary to employees under the agreement

In labor relations, the employer shall have the following rights:

- The right to recruit workers

- The right to observe and transfer employees

- The right to dismiss workers

- The right to decide the wages of workers

- The right to reward employees

- The right to discipline employees

* Representative organization of Employers

The representative organizations of employers have various origins, including:

- The business associations: Those organizations were originally formed for coordination and mutual assistance in production and business Then, these organizations function as representatives of employers in labor relations

For example, in Vietnam: textile associations, associations of enterprises with foreign investment capital, seafood processing associations

- The organization of employers: these institutions do not perform the function

of coordinating production and trading The function of these organizations is representatives of employers in labor relations For example, employers associations, councils of labor owners

- The representative organizations of employers established by the government: It is the Government organization established to perform functions on

behalf of the employers They usually perform different functions, which mainly supports the management of the state

For example: the Vietnam Chamber of Commerce and Industry (VCCI)

In Vietnam, the management of labor relations includes:

- National level: The Government, Ministry of Labor - Invalids and Social Affairs

- Provincial level: Provincial People's Committee, Department of Labor - Invalids and Social Affairs

- District level: District People's Committee, Department of Labor - Invalids and Social Affairs

- Commune/industrial zones level: The commune People's Committees, management boards of industrial zones

2.2.5 The criteria of labour relations

To evaluate labour relations, the criteria of labour relations need to be built The criteria of assessing labour relations in business was built to reach the target of corresponding parties consider, assess level of labour relations in business which will

be the basement to adjust labour relations better; distribute businesses which have good labour relations and give warning for businesses to which contain risks in labour relations; Completing policies and measures; adjustment mechanism labour relations in business

Now, Vietnam has yet to have a series of criteria in evaluating labour relations

in business The creativeness in buiding a assessment series of labour relations which were refered in state documents labour relations and in experts‟options in labour relations seminars

The criteria of labour relations now have been stipulated rigidly in various documents, consists of ILO‟s conventions and Vietnam legal documents, particular in:

* ILO „s conventions which refer to labour relations

ILO was found in 1919 ILO was found based on 3 fundamental purposes: humanity goal (improving labour conditions); political goal (ensuring social equality and protecting labour rights and human rights which helps social balance); and economic goal To meet all above goals, ILO formualted international labour standards by forms of conventions in which stipulate minimum standards about labour rights (Ex: freedom rights business group, the rights to organize and negotiate collectively, the rights to abolish forced labour, and labourers are not to be discriminated at working places and in employment…) ILO „s conventions have been considerred the basement of International Labour Code

The following ILO‟s conventions can be used as the figure of labour relations

in Vietnam: