Research labor relations in JSCs in Hanoi city

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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.

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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 enterprise-

level system of labor relations.

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.

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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.

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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.

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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.

1.2.1.3. State

In the labor relations system, the State plays a role as a partner, representing the

interests of the country and the entire community.

In the enterprise-level labor relations, the State’s role is to regulate the

relationship between employers and employees.

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.

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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.

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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.

1.3.1.3. Natural conditions

Natural conditions will affect the negotiation contents between employers and employees in JSCs: salaries, hazardous allowances, working conditions, break time, ...

1.3.1.4. Macroeconomic conditions

Macroeconomic conditions may motivate or hinder developing economic

components in response to solutions to use appropriate resources, including human resources, which have an indirect impact on a healthy environment for labor relations.

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. Subjective factors 1.3.2.1. Personnel policy

Enterprise-level labor relations depend on the level to meet the requirements of

employees, expressed through personnel policy. 1.3.2.2. Technological level

Technology level affects labor organization, skill requirements of employees, salary regime of companies. This is an important content in which both employers and employees are interested. 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.

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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.

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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.

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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

* The employee

Hanoi currently has large labor force, approximately 4.4 million people of working age, the total number of employees working in the types of the enterprises

up to 2013 was 1.7626 million employees, which work beyond the state accounted

for 90% [32].

On the basis for an assessment of the employee by experts of the World Economic Forum (WEF) and by analyzing such statistics and investigating the

sampling of the author, drawing some following comments: (l) Vietnamese

employees has many good qualities, but lacks the minimum basic skills and

professionalism, labor discipline and commitment is low; (2) the employees at JSCs 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.

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2.2.1.2. The employer

From the results of investigating sampling for JSCs in Hanoi and research

results of other authors, the thesis made the following observations: (l) the employer

is assessed at the average level because of low professionals, views and perceptions

about labor relation (Considering 5 indicators: management skills, strategic vision,

knowledge and personnel management skills; professionalism; attitudes and perceptions about labor relation); (2) The majority of the employers in JSCs

graduated with the degree of bachelor or master; however, some people trained in

economics and business administration account for a small proportion; (3) the

employer of the enterprise is currently not grasped management legislation and labor usage; (4) The qualities and thought, but many skills are weak, particularly the skills

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

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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.

2.2.3.2. Negotiation

The agencies and organizations of Hanoi have many activities to develop, guide

enterprises in the organization negotiating and signing the collective labor agreement.

In fact, the negotiations in this enterprise are only formalistic, reassure employees

and deal with relevant cases. Many agreements have been signed but the contents are

reproduced from the provisions of the law, the quality of the agreement is not high, not really the result of a process of dialogue, negotiation of collective representation

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

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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

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healthy labor relation. However, there are still several factors with negative impacts such as the starting point is an agricultural economy and the psychological effects of

the subsidy.

2.3.1.3. Macroeconomic conditions

The process of full and comprehensive open and assimilation is marked by

joining the World Trade Organization WTO in 2007. As for Hanoi, GDP growth on average in the 2006-2010 period reached 10.73% per year. The structure of economic

sector shifted towards the positive direction. The development investment capital in

the city is constantly increasing at over 10% compared to previous year. However,

there are still limitations and weakness, the macro economy is unstable, the inflation runs the risk and has rebounded, bad debts increase.

2.3.1.4. Labor market

Vietnam labor market gradually moves to operation and compliance with market rules. The thesis has analyzed and pointed out some problems of Vietnam labor market as follows: (i) lack of jobs due to the crisis; (ii) lack of highly qualified labor; (iii) low labor quality; (iv) labor export tends to decrease; (v) labor structure in occupations has the imbalance compared with the world. Thus, Vietnam labor market is currently also contains quite a lot of uncertainties. These factors will have impacts on labor relation. 2.3.1.5. Organizations of mediation, arbitration and counseling institutions

The arbitration and labor court system is unfinished in terms of organization; the role of labor courts is fuzzy. The legal system, the State management agencies, the institutions of representation, consultancy, judgment and support from the State on labor relation are still incomplete, Inspection of labor relation in our country is still missing; Activities of the basic Conciliation Council is paralyzed, so obligatory mediation step has not been applied according to regulations. The seminars in enterprises are in form; Main operations of labor arbitration are advisory, legal guidance and propaganda support, not implemented functions of an arbitration institution in accordance with the law.

In 2012, the Hanoi City People's Committee has established Board of labor relation of the city. This is a huge effort in supporting the general development of labor relation and completing labor relation of enterprises in Hanoi. 2.3.1.6. Activities of trade union organizations and organizations protecting the rights of employers

• Representative organization of the employees (union) Trade union organizations are established from the central to the province level,

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district level and local level. Grassroots trade union organizations in State enterprises are relatively strong in both quantity and quality of work. However, the development

of grassroots trade unions and trade union members in the non-state sector is limited;

fail to properly perform its role as representative organizations protecting the

legitimate and lawful rights and interests of the employees. The capacity and

qualification of the staff working in the trade unions of enterprises in many places has not met the requirements, lacked in conditions and mechanisms of action and

protection for union officials. So, there a great impact on labor relation in JSCs in

Hanoi in particular.

• Representative organization of the employer This organization was established at the central level including Vietnam

Chamber of Commerce and Industry (VCCI) and the Union of Cooperatives of

Vietnam. At the provincial level, there are the Union Cooperatives, but many

provinces and cities have not had the Branch of Chamber of Commerce and Industry at provincial level. Association of Enterprises has not completely mounted with

VCCI, the operation mainly carries the natures of trade promotion and investment,

not has performed the role of representation for employers in the enterprises. There

has been no focal point to concentrate activities of the associations in supporting the legal framework for representative development of labor relation and no

organizations of employers to operate efficiently.

In November, 2011, the VCCI established Council of Gender using city's labor

with the participation of 5 Associations and 15 large enterprises in Hanoi

representing different fields. This is an important focal point institution, represents the employers participating in trilateral mechanism for the development of labor

relation in the city. But in the reality, activities of this organization do not represent

enterprises and have not had the cohesion.

2.3.2. The subjective factors

2.3.2.1. Human resources policy of enterprises

In fact, only about 30% of Vietnam enterprises build human resources strategy

and primarily focus on large-scale enterprises. Investigations by the author show that:

The recognition and evaluation of the employee and the employer on human

resources policies are different, so it is easy to cause the conflict. Human resources

policy of the JSCs in Hanoi still have had several limitations such as personnel

remuneration implemented empirically and unclearly, even inconsistently ... These

enterprises have also just paid attention to financial remuneration policy rather than

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financial compensation combined with non-financial remuneration. These are factors that negatively influence the formulation and development of healthy labor relation in

these enterprises.

2.3.2.2. The technological level of enterprises

The survey results show that the technological level of the JSCs in Hanoi today

is rated at the relatively modern level. Many companies have advanced and modern level of technology, require employees to have knowledge and skills to operate.

Besides, there are also some companies with medium, backward and very backward

level of technology. All these things will affect the content of the agreement between

the parties in labor relation.

2.3.2.3. Corporate Culture

The JSCs in Hanoi have focused on building and developing cultural elements

as the foundation for the operations of enterprises. In the elements of corporate

culture, the element evaluated the best by employees currently is the information exchange system, followed by the movement of rituals and rites. And the elements of

the business philosophy and processes have prescribed to only be evaluated below

average. Thus, employees are not aware of orientation, business philosophy as well as

processes and relations that companies are using.

2.3.2.4. Business fields and lines

Through synthesis and analysis, authors have shown that business lines of JSCs

in Hanoi are quite diversified and covered the fields from the production and trade to

service and business fields and lines have an impact on the agreements between

subjects in labor relation.

2.3.2.5. Enterprise Scale

The scale of JSCs in Hanoi is mainly of enterprise type with small and medium

scale, the number of employees is less, and the employers find it is easy to grasp the

situation to promptly handle any problems arising. However, human resources

management system of these companies has not been methodical yet, so affecting

human resources policies.

2.3.2.6. Awareness of subjects in labor relations

Based on analyzing level of subjects and evaluating other capacities according

to 2 surveyed enterprise groups. The author takes out conclusions: awareness of

subjects about labor relations in JSCs in Hanoi is limited (achieved only above

average) and there is a gap between employee and employer. This is an huge effect

for creating harmonious labor relations between them.

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2.3.3. Some conclusions drawn from the impact factor analysis

With analysis of the real situation of factors affecting labor relation in JSCs in

Hanoi as mentioned above, the author has pointed out impacts of each factor to labor

relation.

2.4. SITUATION ANALYSIS OF LABOR RELATION IN JSCS IN HANOI WITH TYPICAL NATURE

The author has carried out the investigation and study in 2 JSCs including: (l)

Hai Ha Confectionery JSC. This is the enterprise equitized in 2003 according to the

guidelines of the State; (2) Vietnam Communication Corporation. This is the

enterprise founded in 2006 under Law on Enterprise. Based on the research on: the subject of labor relation; interaction mechanisms and social dialogue, the author has

given these following conclusions: (i) the capacity of employees has changed in a

positive direction, but differs by business sectors and fields. The qualification of the

employees in manufacturing enterprises is limited, so conflicts are likely to arise due to the ignorance. The sense of living and working according to the law is not high;

the lack of dynamism remains; (ii) Grassroots trade union organization has promoted

its role in protecting the legal rights of the employees. However, the activities of this

organization still leans to the form and organization, collective activities still depend on the employers; (iii) the position of employers is always higher than employees in

labor relation, point of view and awareness of the problems on labor relation are

insufficient; (iv) interaction mechanism of two parties is operated, but the

negotiations and the collective labor agreement are in form seriously; (v) social

dialogue is done with many forms, but the effect is not really high.

2.5. GENERAL EVALUATION

2.5.1. Achievements

- Along with the perfection of institutions, policies and laws for labor relation of

the State, Hanoi has had many effective measures making labor relation in enterprises

in the city have positive changes.

- The Employee in the Labor Relations tends to rise gradually along with the

development of the JSCs. Vietnamese Employees in general and Employees working

in JSCs in Hanoi in particular are considered as ingenious, clever, creative,

inquisitive, able to quickly acquire modern techniques and technologies to be

transferred from foreign countries. There have been the positive changes in

awareness about employment and Labor Relations.

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- 100% of local trade unions in JSCs in Hanoi are elected by Employees. The officials of local trade unions have been trained knowledge and basic skills in Labor

Relations. They have represented the Employees to participate in solving some

problems related to their rights, obligations and interests in Labor Relations and have

organized lots of practical activities in order to improve spiritual life of the

Employees.

- Employers are increasingly young and have higher qualifications, be dedicated

to work, optimistic about the future, meticulous in work, decisive, able to build a

good relationship; have good quality and thinking. There are significant changes in

the awareness of settling Labor Relations incurred. In terms of business, they are young, dynamic, decisive and audacious entrepreneurs,.

- Organizations representing Employers have had the practical activities in

suggest the Vietnamese State to complete the legal framework, build mechanisms and

policies to help Enterprises develop and help young entrepreneurs improve Management Capacity in all aspects.

- The bilateral mechanism in the Labor Relations in Hanoi has been operating

fairly efficiently: 87% of Employees have been signed labor contract; the parties

signing the Labor Contract and the singing principles have been basically guaranteed; most of JSCs have has their specific wage regulations;

- Interactive forms in the Labor Relations are used quite diversely; Labor

disputes are resolved basically, has limited the strikes; most of JSCs are interested in

building the human resources policy, initially creating the foundations for carrying

out healthy Labor Relations.

2.5.2. Limitations

(1) The participants in Labor Relations in JSCs in Hanoi currently has

asymmetric capacity and position: The Employer is always in a higher position, lowly

professional and less methodical, has insufficient views and perceptions of Labor

Relations;

low awareness of complying with the legal regulations; limited

management skills and strategic vision, especially in human resource development

and investment; Employees have low technical qualifications, low consciousness of

living and working in accordance with the law, limited industry style. Employees are

always in a lower position in the negotiations; the local trade unions have not

promoted the representative role of the Employees. Trade Union officials have

limited knowledge about laws and skills necessary in their role. The activities of the

local trade unions have been still the tip of iceberg and not focused on in-depth

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activities of Labor Relations; (2) The bilateral mechanism in Enterprises has been operated but not been interested in find out solutions to increase both parties’ profits;

(3) Not active in the prevention and settlement of the strikes; (4) Dialogues,

negotiations and award of collective labor agreements have been limited in terms of

quality; (5) Most of the personnel policies have not been really methodical and little

concerned about the long-term policies, etc.

2.5.3. The cause of the limitations

* Objective causes (i) The State’s management on Labor Relations has been

inadequate; (ii) Solutions to raise awareness, understanding and skills in Labor

Relations have not been effective; (iii) labor supply and demand relations have been imbalanced; (iv) Rapid urbanization in Hanoi has led to big labor movement in

agriculture to other sectors; (v) Law system in Labor Relations has not facilitated the

healthy development of enterprises; (vi) the local trade union officials have mostly

held several official positions, heavily dependent on the Employers. Therefore, the role of the local trade unions is very faint; (vii) Labor Relation institution has not

proved effective.

* Subjective reasons: (i) Few companies have laid the foundation for the

development of enterprises with Business Culture; (ii) the human resource policy of the enterprises have been limited, less professional; (iii) the Employers have not fully

implemented the provisions of the law, not paid adequate attention to the legitimate

rights and interests of Employees; (iv) The Employees have been limited awareness,

understanding about policy, and labor law; (v) The subjects have not active in

negotiation to build harmonious Labor Relations in order to increase the benefits of all parties.

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Chapter 3: SOLUTIONS TO COMPLETE LABOR RELATIONS IN JSCs IN

HA NOI DURING THE PERIOD UNTIL 2020

3.1. DEVELOPMENT ORIENTATION OF JSCs IN HANOI IN THE COMING

TIME

3.1.1. Socio-Economic Development Plan of Hanoi City by 2020

3.1.1. l. Overall objectives

To speed up the construction of the technical infrastructure and culture of the

modern and civilized capital closely associated with the development of knowledge-

based economy.

3.1.1.2. Key tasks and breakthrough stages

Hanoi has focused on key tasks such as: Economic development; Urban

planning; cultural development; scientific and technological development; National

defense and security strengthening.

3.1.2. Development Orientation of JSCs in Hanoi

Development orientation: (i) Associated with the guidelines and policies, socio-

economic development objectives of the Party and the State; (ii) Associated with the

common interests of the whole society; (iii) Develop sectors and field that Hanoi has

favorable advantages.

3.2. CONCEPT AND DIRECTIONS TO COMPLETE LABOR RELATIONS

IN JSCs IN HANOI IN THE COMING TIME

3.2.1. Concept of completion

Firstly, it is necessary to comply with the guidelines, policies and orientations of

the Party, law policies of the State development on harmonious, stable and advanced

Labor Relations; Secondly, it is required to ensure the Labor Relation system

operation under the principle of market economy.

3.2.2. Completion direction

The author presents 5 orientations associated with 5 problems: (1) awareness

and consciousness of the parties; (2) the institutional system creating the environment

for Labor Relations: (3) Capacity of subjects; strengthening social dialogues,

restricting strikes; settling labor disputes; (4) Strengthening the role of local trade

unions; (5) Forming a supporting institution system.

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3.3. SOME SOLUTIONS TO COMPLETE LABOR RELATIONS IN JSCs IN HANOI IN THE COMING TIME

3.3.1. Solutions on the subjects of Labor Relations

3.3.1.1. Innovative thinking and higher awareness of subjects in Labor Relations

In this solution, the author focused on the forms and methods to innovate

thinking and improve awareness of subjects, especially the Employers of the nature and inner contents of Labor Relations and position of subjects in this relation. The

author suggests the state authorities and the relevant social and political organizations

in Ha Noi to join this activity. It is necessary to select the contents appropriate for

each perception subjects such as: The issues the Employees need to recognize and Employers should be aware of.

The author recommend how to implement for each object: (1) For the

Employers: Divided into 2 objects: (i) For the Employers in the Enterprises are about

to be established; (ii) For the Employers in the Enterprises are currently operating; (2) For the Employees: (i) For unskilled Employees employed by the Enterprises and

joined a training course before starting their work or carrying out simple tasks; (ii)

For the Employees working in the Enterprises; (3) For the local trade union officials.

3.3.1.2. Enhance the understanding and training courses on labor law for the Employees

In this solution, the author classifies different objects and presents the forms for

each subject. In particular, it is necessary to be most interested in unskilled

employees in rural areas working in industrial parks, who are required to be equipped

with legal knowledge through posters available and installed on the path to the industrial parks, the workers’ housing areas, residential areas with a large number of

workers in selected contents. In the current conditions, it is possible to disseminate

laws to the Employees via social network websites.

3.3.1.3. Strengthen the role of the local trade unions in JSCs in Hanoi

This solution shows tasks required to be carried out by the local trade unions to

implement management functions well; participate in activities related the parties’

rights. Besides, it is essential to pay attention to promote the Employees’ potentials,

initiatives, along with the leaders of Enterprises to seek and exploit resources for its

development.

Moreover, it is necessary to enhance the representation function of the Executive

Committee of local trade unions for better implementation of the role as the

representative of the Employees, protection of the rights of the Employees. In

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particular, there are measures to improve the capacity of trade unions and local trade union officials.

3.3.2. Solutions of interaction mechanisms

Specifically, some solutions should be noted: Create and improve efficiency of singing the Collective Labor Agreements; focus on real dialogues as a precondition for negotiating and signing the Collective Labor Agreements; review the entire award of the labor contract to ensure the contracting principles stipulated by the Labor Code; Review the salary and treatment policy in order to ensure equality and transparency; Ensure proper implementation of social insurance and health insurance policies, labor safety and sanitation for each employee regardless of position and job title. 3.3.3. Solutions of interaction forms of Labor Relations 3.3.2.1 Strengthen social dialogue and collective negotiation

The author presented 5 notes when strengthening social dialogue and collective negotiation for JSCs in Hanoi; recommended the negotiation process including 6 steps: (1) Negotiation preparation; (2) Meet the Representative of the Employer; (3) Suggest the problems; (4) Debate each issue; (5) Negotiate; (6) Sign and terminate the contract; Recommend to apply six conditions for “real” negotiations and “real” agreements by Nguyen Manh Cuong; Concretize preparation. The author presented 8 principles for effective negotiation. 3.3.3.2. For labor disputes

In order to prevent labor disputes: it is possible to use the following tools: social

dialogue; Law;

Steps to resolve disputes effectively are: (l) Decide what you want to achieve; (2) Find the person who can best resolve the disputes; (3) Ready to negotiate; not give the orders; (4) Not be distracted by personal conflicts; (5) Focus on the beneficial results for both parties.

The author recommended 7 principles to resolve the disputes; pointed out the 5 attributes of the dispute settlement process, which are: (l) Clarify the benefits of all parties; (2) Establish good working relationships; (3) Give the solutions to make a good choice; (4) Discuss solutions before selection; (5) Strengthen communication relationship and commitment. 3.3.4. Other solutions 3.3.4.1. Complete the human resource policy in the Enterprises

In this solution, the author recommended to reestablish Human Resource Management System fundamentally and comprehensively, including all policies of recruitment, assignment, use, training, treatment. Therefore, it is required to find out

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“Breakpoint”, at which treatment policy is fair, reasonable and brings about satisfaction to both Employee and Employer. All human resource policies of the Enterprises must be built on the principle: All Employees in Enterprises are equal irrespective of gender, race, religion. 3.3.4.2. Build and develop the Business Culture in the positive direction as the foundation for appearance and healthy development of Labor Relations.

According to Assoc. Prf. Dr. Le Quan, during the Business Culture building process; it is necessary to determine and develop the core values of the Enterprise, methods and techniques to identify and control develop the core values in the Business Culture system.

Specifically, when building the Business Culture, it should be noted that the Business Culture includes 5 layers: (l) Business and management philosophy; (2) Motivation of individuals and organizations; (3) Regulation process; (4) Information exchange system; (5) Movements, rituals and rites. In each layer, the author indicates the role, meaning and how to build 3.4. SOME RECOMMENDATIONS AND SUGGESTIONS 3.4.1. Enhance Management capacity and support Labor Relations of State agencies and Labor Relation institutions

It is essential for Hanoi city authorities to focus on strengthening state management organization and mechanism in Labor Relations from city level to district level to ensure have appropriate organizations and employees to implement tasks set forth in each period. 3.4.2. Complete the legal system of Labor Relations

It is necessary for Vietnamese State to improve the legal system of Labor Relations in the direction of: changing our legal thinking from adjusting specific contents of Labor Relations to adjusting the Labor Relation mechanism and Labor Relation contents. 3.4.3. For the wage policy of the State

institutions, arbitration,

The Vietnamese State was directed towards the issues related to establish the minimum wage, the minimum wage of the sector; Provisions on how to pay salary flexibly, form the legal framework, technical guidance, information and negotiation and dialogue mechanisms for salary. 3.4.4. Raise the operation efficiency of support inspection and mediation

The Vietnamese State was directed towards focusing on the establishment and operation of mediation institutes, mediation institutions, arbitration and settlement;

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consultative institutions, support institution and establishment of additional functions of labor inspection authorities for compliance with the law.

3.4.5. Complete the trilateral mechanism in Labor Relations

In this recommendation, the author pointed out the role of the trilateral

mechanism and the conditions the State must create for operating this mechanism

effectively and in accordance with national conditions.

3.4.6. Promote the development of the labor market

In this recommendation, the author pointed out the issues related to the labor,

employment and labor market development policies the Vietnamese State should

amend. In particular, what the Vietnamese State should do was concretized.

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CONCLUSION

Labor Relations in JSCs implies economic and social natures because when

entering into Labor Relations, each party has set obvious economic benefits and

parties have born people-to-people relation within a community. Labor Relation in

JSCs is both united and contradictory because conflicts are historically existed due to

economic benefits of opposite sides. However, if enterprises achieve targets during business operation, opposite parties can gain economic benefits by several bases.

Because of setting obvious research objects along with using proper researching

methods, this thesis has dealt with basic contents and gained some results as follows:

(1) systemize and develop some theoretical issues of Labor Relations in JSCs: Some basic definitions; basic contents of Labor Relations in JSCs (subjects, interactive

mechanism, interactive forms); (2) reveal objective and subjective factors influencing

Labor Relations in JSCs. At the same time, investigations into labor relation

management in JSC home and abroad are carried out and then experience lessons are withdrawn in order to apply in JSCs in Hanoi; (3) Basing on investigations into

environment and JSCs’ operation within Hanoi, analyze exiting situation of Labor

Relations of JSCs in Hanoi in the years to come; the first is the solution for subjective

of labor relations; the second is resolution for interactive mechanism of Labor Relation; the third is solution of interactive form for subjective factors of labor

relations. Furthermore, the thesis has posed some recommendations and proposals so

as to facilitate the completion for Labor Relations of JSC in Hanoi in the future.

Despite great attempt, this thesis has mentioned to new issues in terms of theories;

practices; complicated research contents as well as limited research conditions, shortcomings are still existed. I would like to be contributed by teachers, scientists

and colleagues so that I can improve following research works. I am so grateful to

instructors, colleagues, family and friends who have created favorable conditions for

me to fulfill this thesis.

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RESEARCH WORKS FOR THE THESIS

1. Strikes in Vietnam from the perspective of labor relations, Social Labor

Magazine

2. Improving labor relations in JSCs, Social Labor Magazine

3. Foreign Employee Quality in Vietnam – Related issues, Business Finance

Magazine

4. Labor relations in Private Companies – Status quos and Recommendations

Economy and Development Magazine

5. Improving Capacity of Subjective Labor Relations in JSCs in Hanoi, Social

Labor Magazine