O massmann legal aspects of collective labor agreements


Summary of Presentation

● Legal Aspects of Collective Labor Agreements ● Dispute Resolution ● Strike


Relevant Laws

● Labor Code of Vietnam dated 23/6/1994 and its 2002 and 2006 Amendments;

● Decree 196/CP dated 31 December 1994 on Collective Labor Agreements as amended by Decree 93 dated 11/11/2002;

● Decree No. 12/2008/ND-CP dated 30/1/2008 on postponement and suspension of strike; and

● Other relevant laws and regulations.


Collective Labor Agreement (“CLA”)


Collective Labor Agreements (“CLA”)

What is a CLA?

● Roughly speaking, a CLA is a [written] agreement between the employees (via their trade union) and the employer addressing mainly working conditions and employment-related rights/obligations of both parties.

Is a CLA compulsory?

● No, it is made on VOLUNTARY basis. This means the employer is not forced to reach the CLA like it is with the labor contracts (LC).

● Without having a trade union (TU), the employees and the employer may not negotiate and enter into a CLA.

Note: Regardless of the number of workers a business employs, if there are 05 workers or more in the business desiring to establish a TU, the higher level TU will issue a decision to recognize and establish it.



What is so special about a CLA?

● It is made between the so-called “employee collective” (via the trade union) and the employer. There is no clear definition of the “employee collective under the law though it is often interpreted to refer to all employees of a business in general.

● Benefits/rights of employees must not be lower than those stated in the laws but the higher is encouraged.

● Though voluntarily made, the CLA, once signed, is binding on the signing parties and prevails other employment-related documents such as labor contract and internal labor rules in case of inconsistency.



Why a CLA?

● To provide better benefits for employees’ benefits/rights than those provided by the laws.

● To fill in what the law is silent on.

● To serve as a source of legal basis in case of labor dispute.

And some believe

● To prevent potential labor disputes and strike.

● To strengthen the employees’ attachment to the enterprise, especially production units.



When is a CLA negotiated and signed ● At the request of ANY party, the other party must accept the invitation for

negotiation and start the negotiations no later than 20 days from the accepting date.

and How? ● Step 1: The requesting party informs the other of proposed negotiations. The

requested party must come back with suggestion on agenda of and representatives for the negotiation.

● Step 2: Authorized representatives of both parties enter into negotiation process.

● Step 3: The draft CLA must be approved by at least 50% employees.



● Step 4: Both parties sign on the CLA

● Step 5: Registration of the CLA with provincial department of labor, invalids and social affairs (DoLISA) or BOM of industrial zones at provincial level depending on whether the relevant company is located outside or inside an IZ respectively.

Note: The registration with competent state bodies is of utmost important as it may fully guarantee the enforceability of the CLA.

Who negotiate and sign the CLA (at Step 2&4 above)?

● Employees’ side: Executive Committee of the Trade Union to negotiate & and the Chairman/authorized representative of the Trade Union to sign

● Employer’s side: (General) Director or his authorized representative.



What do the employees and the employer agree in a CLA?

● Employment and employment guarantees

● Working time

● Salaries, allowances and bonuses

● Work limits (allocated time and/or product limit for employees)

● Labor safety and hygiene

● Social insurance

● Other employment-related issues that both parties may agree



What is the term of a CLA?

● From 1 – 3 years from its effective date (i.e. – the registration date with competent state bodies). The first CLA may have 1-year term.

● Both parties may extend the current CLA or sign a new one upon its expiry.

● In case of merger, the former CLA still takes effect if more than 50% employees of the “new” enterprise are those used to benefit from that CLA prior to the change of control. For other form of “change of control” like de-merger, transfer of major assets or other cases of merger, the negotiation must be commenced within 06 months from the “change of control” date (for example, the date on which the merger is officially valid)



Can a signed CLA be challenged?

● Yes, a part of the whole CLA may be challenged in term of its validity if:

(i) Its provision(s) goes against the law;

(ii) The signatory to the CLA has no authority to sign; or

(iii) Signing procedure is inconsistent with the law including the registration with the CLA.

● If this is the case, the provincial DoLISA will declare the invalidity of the CLA in whole or in part.



Do you need a CLA?

● For labor-intensive production establishments, a CLA might be a prevention of potential labor dispute and strike.

● A well-prepared CLA may effectively fill in loop-holes in Vietnamese labor law and therefore preclude unexpected discretionary judgment by competent state bodies in case of labor dispute.

● A fair CLA help to build up a long-term relationship between the employees and the employer.


Labor Dispute


Dispute Resolution

Types of dispute

● There are two types of labor dispute: (i) individual labor dispute and (ii) collective labor dispute. Different types of dispute lead to different proceeding process and legal consequences.

● If an individual employee is involved with a labor dispute with his/her employer, it is considered individual labor dispute. If trigged by a group of employees in the same enterprise or a unit of that enterprise, it is called “collective labor dispute”.

● Individual Labor Dispute: First heard by (i) labor mediation board (in an enterprise) or (ii) labor mediator (appointed by a competent state body if no labor mediation board is established). If fails, the dispute may be brought to the competent court for final settlement. An Individual Labor Dispute is not able to revoke a strike.


Dispute Resolution

● Collective Labor Dispute: Classified as (i) dispute about rights (“Rights Dispute”) and (ii) dispute about benefits (“Benefit Dispute).

● Right Dispute is about the claim of employees on the employer’s breach of labor law, CLA, internal labor rules or other related rules/agreements.

Right Dispute first heard by the labor mediation board or the labor mediator. If fails at this stage, the Chairman of district people’s committee will settle. If still fails, the dispute will, at the employees’ discretion, either be referred to the competent court or turn into a strike.

● Benefit Dispute, in contrast, is about request of employees to establish new [and better] working conditions as compared to current the above rules/regulations.

Like Right Dispute, Benefit Dispute will be first heard by labor mediation board or the labor mediator. If fails, the Labor Arbitration Council will jump in for dispute settlement. A failure at this step may lead to a strike.


Strike!!!


Strike

Strike: Law and Practice ● By laws, a strike means “a temporary, voluntary and organized cessation of

work by the “employee collective” in order to resolve a collective labor dispute.

● Through out Vietnam: 2006: 387 cases; 2007; 541 cases; the first three months of 2008: 300 cases (estimated around 1,000 cases by year end). Most are illegal.

Legality of a strike

● A lawful strike must be organized by the [provisional] Trade Union (TU) in the enterprise (or the authorized representative appointed by the collective employees in the absence of the TU).


Strike ● Before that, the TU must seek approval of at least (i) 50% employees if the

relevant enterprise or its related part has less than 300 employees or (ii) 75% of several positions in the enterprise including the TU’s members, heads and deputy heads of the TU’s divisions and/or production teams if the enterprise/its related part has more than 300 employees.

Illegal strike ● A strike which does not arise from a collective labor dispute.

● A strike not held by employees jointly working within the one enterprise.

● A strike held when a collective labor dispute remains unresolved in accordance with the proceedings set out by the Labor Code.

● Failure to seek approvals of employees or beach of relevant procedures set out by the Labor Code.

● The organization and leadership of the strike are inconsistent with provisions of the Labor Code.


Strike

● Strike revoked in special enterprise that all strikes are strictly prohibited.

● When there is a decision staying or suspending the strike.

Rights of relevant parties before and during the strike ● The Employer: To request the competent court to settle the Right Dispute

(not the Benefit Dispute) or review the legality of the strike.

● The Employee: (via its Executive Committee of the Trade Union/authorized representatives of the collective employees) To terminate the strike or request the competent court to settle the Right Dispute or review the legality of the strike.

Employees not participating in the strike but suffering from the suspension of work due to the strike are entitled to salary payment (as agreed with the employer but not less than minimum salary rate).

Employees participating in the strike are not entitled to receive salary and other benefits unless otherwise agreed by the employer.


Strike

Prohibited acts before, during and after the strike ● Interfering with exercise of the right to strike; or inciting, embroiling or forcing

employees to strike; preventing an employee from not participating in a strike and from going to work;

● Using violence; causing damage to machinery, equipment and assets of the enterprise;

● Infringing public order and safety;

● Terminating a labor contract or applying a labor disciplinary penalty to employees or to organizers of a strike or transferring employees or organizers of a strike to do other work or to work at another location because of preparation for, or participation in a strike.


Strike

Prohibited acts before, during and after the strike ● Taking revenge on or victimizing any employee participating in a strike or any

person organizing a strike.

● Arbitrarily terminating activities of the enterprise in order to oppose a strike.

● Taking advantage of a strike in order to act contrary to law.


Strike

Veto by the Primer Minister ● The Prime Minister may decide to suspend or terminate a strike if it is

considered posing a danger of serious infringement to the national economy or the public interest.

● The Prime Minister may then assign a state body or organization to resolve the dispute.

Review legality of the strike

● Both the employer and the employee may request the competent court to review the legal validity of the strike in question within 03 months from the date on which the strike is terminated.

● If concluded illegal, the participants of the strike must pay compensation to the employer. If an employee refuses to get back to work, he/she may be subject to several form of labor disciplines.


Q&A


Duane Morris Legal Advisory Team

Thank you!

Oliver Massmann, Giles Cooper, Chris Muessel,

Ngo, Thuy Quang, Hoang Duc Minh

Duane Morris Vietnam LLC Duane Morris Vietnam LLC Pacific Place, 13th Floor, Suite 1308 Suite 809, Saigon Tower 83B Ly Thuong Kiet, Hanoi, Vietnam 29 Le Duan Street, District 1 Tel.: +84 4 946 1310-14 Ho Chi Minh City, Vietnam Fax: +84 4 946 1311 Tel.: +84 8 827 9460 Fax: +84 8 827 9470

O massmann legal aspects of collective labor agreements

Documents

Transcript of O massmann legal aspects of collective labor agreements