Government units to tackle labour disputes

The Vietnamese government is stepping up efforts to address labour disputes by establishing specialised industrial relations units nationwide.

Last week, the government permitted the establishment of the Industrial Relations Centre, the first of its kind, under the Ministry of Labour, War Invalid and Social Affairs’ (Molisa) managerial umbrella. It will be run with state financial support.

Following the establishment of the Centre, city and province-based sub-centres are to follow, ensuring the Centre’s responsibilities are met and all enterprises nationwide reached.

Nguyen Manh Cuong, a Molisa senior official, who is the founder of the Industrial Relations Centre, said that industrial relations units would act as a third party, playing the role of mediator and helping to settle labour disputes arising between employers and employees.

“The units will also provide technical assistance and training in association with industrial relations if needed. They will forecast and analyse industrial relations, giving the results to government agencies and organisations, as well interested employers,” Cuong said.

The establishment of such units is among the Vietnamese government’s moves toward better resolving labour disputes, a problem that foreign investors have said hindered their business, thereby affecting the nation’s attractiveness for foreign direct investment.

Last year, Prime Minister Nguyen Tan Dung urgently asked governmental agencies and local governments of 63 cities and provinces across the nation to open regular dialogues, enhance labour policies and establish grassroots trade unions in face of rising labour strikes at foreign invested enterprises (FIEs).

Reported figures indicated that labour strikes had risen year on year, from 139 in 2003, to 147 in 2005, to 541 in 2007 and to 649 in eight months of 2008. In total, there were 2,555 strikes in Vietnam between 1995 and August of 2008, of which 72.4 per cent occurred in FIEs. Most strikes were reported in the nation’s industrial hubs of Ho Chi Minh City, Binh Duong and Dong Nai.

Reasons for strikes, many of which were unprompted, include low wages, excessive overtime hours, unpaid social insurance and lack of communication between employers and workers.

Ou Cheng Ming, vice president of the Taiwanese Electrical and Electronic Manufacturers’ Association (TEEMA), a group of 3,800 company members with giants like Foxconn and Compal, said that labour strikes in Vietnam would make Taiwanese investors reluctant to enter the country.

Meanwhile, although Vietnam has been ranked as the third most promising investment destination for Japanese investors in the next three years by the Japan Bank for International Cooperation surveys, labour-related issues like rising labour costs are raising concern about Vietnam’s investment climate.

“I have seen the Vietnamese government actively moving to address our labour problems since the middle of the year, and this is a positive signal for us to look favourably upon Vietnam,” said Ming, who received an investment certificate to build a $35 million electronic part manufacturing plant in the north of Vietnam two weeks ago.

Following the prime ministerial directive on industrial relations last year, Molisa would have to improve labour policies including those governing the payrolls of FIEs to more clearly regulate the wage levels of unskilled and skilled workers.

The Ministry of Planning and Investment would head the organisation of regular talks with foreign investors, especially employers, using Vietnamese workers in industrial and export processing zones to more quickly address the issues.

Concurrently, local governments of cities and provinces across the country must also set up labour - related taskforces.