Vietnam is continuing to adapt to meet the challenges of integrating into the global economy.  As such, compliance with international labor standards requires Vietnam to adopt an appropriate labor relations model.  For enterprises, building harmonious, stable, and progressive labor relations is one of the key factors contributing to a stable investment environment, ensuring sustainable economic growth, and achieving social progress and equity.

Not only are Labor relations a critical aspect of social and professional life, but it also plays a decisive role in the sustainable development of the nation.  Therefore, over recent decades the Party and the Government have oriented themselves towards economic development, improved the business investment environment, created stability, and fostered economic growth. They have also promoted business growth, enhanced job efficiency, stimulated the labor market and gradually balanced labor supply and demand, enhancing positive labor relations development.

However, the road to successful employer-employee relations requires hard work and diligence.  As will be discussed below, the foundation for building and maintaining stable and positive labor relations particularly requires conscientious contributions by both employees and employers.

Labor relations – an indispensable link in business operations

According to Clause 5, Article 3 of the 2019 Labor Code, “labor relations” are social relationships arising from the hiring, employment, and payment of wages between employees, employers, the representative organizations of both parties and competent state agencies. The International Labor Organization (ILO) similarly defines labor relations as individual and collective relationships between employees and employers in the workplace, as well as the relationships between their representatives and the state. Thus, “labor law relations” are legal relationships arising between the subjects—employees, employers, representative organizations of both parties and competent state agencies. Labor law relations emerge when these subjects engage in hiring, employing labor, and paying wages to employees.  The specifics of these legal relationships generally revolve around key issues such as recruitment, training, wages, working hours, labor discipline, rights, and interests.

Labor relations are established through dialogue, negotiation, and agreement based on the principles of voluntariness, goodwill, equality, cooperation, and respect for all parties’ legitimate rights and interests. Labor relations include individual labor relations and collective labor relations.  In this context, employers, employers’ representative organizations, employees, and employees’ representative organizations build progressive, harmonious, and stable labor relations with the support of competent state agencies.

The role of Trade Unions—representative organizations of employees—is particularly emphasized in labor relations.  Trade Unions cooperate with competent state agencies in supporting the building of progressive, harmonious, and stable labor relations, supervising the implementation of labor laws, and protecting the legitimate rights and interests of employees. Moreover, the Vietnam Chamber of Commerce and Industry, the Vietnam Cooperative Alliance, and other organizations representing employers established under the law. play an important role in representing and protecting the legitimate rights and interests of employers as well as the creation and maintenance of stable labor relations.

When healthy labor relations are practiced by all parties, it brings immense benefits to both employees and employers, fostering economic growth and stable socio-political development. Further, it must  always be remembered that labor relations impact the lives of many individuals in society. Typically, employees are the key members of their families and, therefore, stable labor relations help maintain the happiness of individual families and the prosperity of the nation.

Forms of expression of labor relations

As mentioned, legal relations arise between employees, employers, representative organizations of the parties, and competent state agencies are labor relations. There are two types of labor relations, individual labor relations and collective labor relations, which are expressed and maintained based on legal forms as follows:

Forms of labor standards:  The labor legal system includes labor laws, labor agreements, labor contracts, labor regulations, memorandums or commitments of leaders, codes of conduct and other forms.

Forms of representation: Includes the institutions representing employees, representative institutions for employers at various levels, and institutions representing the state.

Forms of dialogue: Are methods of organizing dialogue channels between the subjects in labor relations. These dialogue channels can take place at different levels, such as consultation, information sharing, and negotiation.

Forms of conflict resolution:  In any enterprise, conflicts between employees and employers are inevitable. Often, the status of these issues and how they are handled can help assess the state of labor relations within a business. Conflicts may manifest and escalate in a variety of different forms such as disagreements, complaints, conciliation, disputes, arbitration, litigation, strikes, and lockouts.

Foundations for establishing stable and developed labor relations

Labor relations are one of the key components of production relations. It is notable that the labor relationship between employers and employees is legally recognized, established, implemented, and maintained based on principles of voluntariness, equality, cooperation, and mutual respect.

Principle of Respect: Labor relations are not only economic but also social. Respect between the parties is demonstrated by listening, sharing work, facilitating each other’s participation, and making joint decisions. It is also reflected in daily behavior, culturally appropriate language and gestures, preserving dignity and honor, acknowledging each other’s deserving contributions, maintaining humility, practicing fairness, and fulfilling commitments. Respect forms the foundation for cooperation between employers and employees and significantly influences the effectiveness of this cooperation. It is important to note that labor relations are not purely economic; they also involve humanistic and spiritual elements, making them more sensitive than other relationships. Differences in economic status and objectives between employers and employees only cease to be psychological barriers when both parties exhibit a proper attitude and genuine respect, addressing labor-related issues objectively and without prejudice.

Principle of Cooperation: The essence of labor relations is both unified and conflicting. Cooperation, despite conflicting interests, is the core principle of labor relations.  Effective cooperation harnesses individual strengths to achieve common goals, enhancing productivity and benefits for both parties. It also empowers businesses to overcome temporary difficulties, maintaining and developing production.  Cooperation between workers and employers can be demonstrated through coordination, goodwill, work facilitation, and shared challenges.

For all parties, coordination involves sharing information, consulting, making joint decisions, negotiating, and working collectively.  For employers, facilitating work means creating an environment conducive to employees’ tasks, providing necessary equipment, ensuring a satisfactory income, and offering opportunities for professional development.  For employees, cooperation means a high level of responsibility, adherence to labor discipline, protecting business secrets and assets, and maintaining production efficiency. The success of cooperation largely depends on the cultural and cognitive levels of the workforce.

Principle of the Tripartite Mechanism: A “mechanism” can be defined as a system and process that synthesizes elements for operational functionality. In labor relations, the tripartite mechanism involves interactions between labor organizations, employers, and the state, facilitating the adjustment, maintenance, and development of these relations.

This mechanism democratizes, cooperates, and shares power and responsibility among workers, employers, and the state through representative organizations within enterprises. Further, it effectively links organizations from the labor side to address related issues. Interaction through dialogue and negotiation under this mechanism promotes the globalization of labor relations, resolves conflicts, enhances labor management and ensures effective implementation and adjustment of labor policies and laws. The state’s role includes protecting rights, creating a fair environment, and supporting the stability and development of labor relations. However, to achieve harmonious and progressive labor relations, the legal system must be perfected, with labor laws serving as tools and standards for further labor relations development.

Overall, the interaction between historical, cultural, legal, and economic factors has shaped a unique model of labor relations in Vietnam, contributing to improved working conditions, ensuring workers’ rights, and promoting sustainable economic development.

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