- Have an understanding of the actual situation of strikes and industrial relations in FDIs in Vietnam and in the SKEZ - Set up theoretical framework and model to analyze factors influen
Trang 1VIETNAM ACADEMY OF SOCIAL SCIENCES
GRADUATE ACADEMY OF SOCIAL SCIENCES
e & f
TRAN VAN HUNG
STRIKES IN FOREIGN INVESTMENT
ENTERPRSIES IN THE SOUTHERN KEY ECONOMIC ZONE
SUMMARY OF ECONOMIC DOCTORAL THESIS
Ha Noi - 2019
Trang 3The thesis has completed:
GRADUATE ACADEMY OF SOCIAL SCIENCES
The scientific instructors:
1 Associate Professor, PhD Nguyen Van Ngai
2 Associate Professor, PhD Nguyen Huu Dung
Reviewer 1: Professor, PhD Ngo Thang Loi
Reviewer 2: Associate Professor, PhD Le Thanh Ha Reviewer 3: Associate Professor, PhD Dang Thi Phuong
The dissertation will be storaged at
1 Information and Library Center, Graduate Academy of Social Sciences
2 National library
Ha noi - 2019
Trang 5VIETNAM ACADEMY OF SOCIAL SCIENCES
GRADUATE ACADEMY OF SOCIAL SCIENCES
e & f
TRAN VAN HUNG
STRIKES IN FOREIGN INVESTMENT
ENTERPRISES IN THE SOUTHERN KEY ECONOMIC ZONE
SUMMARY OF ECONOMIC DOCTORAL THESIS
The scientific instructors:
1 Associate Professor, PhD NGUYEN VAN NGAI
2 Associate Professor, PhD NGUYEN HUU DUNG
Ha Noi - 2019
Trang 7INTRODUCTION
1 The necessity of the research
After 30 years of reform, Vietnam was changed from the central planning economy into market economy together with the profound economic integration, this has facilitated the formation of numerous enterprises especially foreign direct invested enterprises (FDIs) FDI has made great contributions into the achievement of the Vietnamese economic reform
as well as created jobs and improved employees’ living conditions the Vietnam’s position
in the international arena On the other hand, FDI capital has created the diversity in the economic structure as well as the complexity in industrial relations because they came from different countries Each country has its own culture and management which results in increasingly growing industrial disputes and strikes, According to the Ministry of Labor and War Invalids and Social Welfare from 1995 to late 2017, there were more than 6400 strikes happened in more than 40 provinces nationwide Most of strikes happening in FDIs
in the Southern key economic zone (SKEZ), accounting for 74% of all strikes This has affected the stability of the socio-economic situation and investment environment in Vietnam greatly That examining characteristics, causes and driving and harmful factors
of strikes is the most concerned mission which helps to design and implement measures that make contributions into building up harmonious industrial relations, limimiting conflicts, mitigating disputes and prevent strikes Therefore, I has chosen the topic “Strikes
in FDIs in the Southern key economic zone” as a topic for my Ph.D dissertation – Major
in Economic Management
2 Objectives and content of the thesis
The overall objectives of this thesis is to set up a framework and model to analyze and study the factors affecting strikes in FDIs and use them to study and identify factors influencing strikes in FDIs in the SKEZ The specific objectives include the following:
- Summarize theories and empirical evidence on strikes in Vietnam and around the world
- Have an understanding of the actual situation of strikes and industrial relations in FDIs
in Vietnam and in the SKEZ
- Set up theoretical framework and model to analyze factors influencing strikes in FDIs
in Vietnam
- Use theoretical model to evaluate factors affecting strikes in FDIs in the SKEZ
- Identify characteristics of workers who usually take part in strikes in FDIs
- Suggest solutions that help subjects participating in industrial relations in FDIs improve their functions and activities to prevent and mitigate strikes
3 Research scope and subject
- The subject of the research is strikes in FDIs in the SKEZ The thesis focuses on studying and identifying factors influencing strikes in FDIs in the SKEZ
- Scope of the research: FDIs in the SKEZ
- Timing: the period from 2007 to late 2017
- Respondents/subjects of the survey and research: employees working in FDIs in the SKEZ; related subjects such as state labour management bodies; Foreign-invested capital attraction and management bodies; Epzone and industrial management boards; workers’ residence management, VCCI management, provincial leaders of Vietnam General Confederation of Labour; Labor Management Office in epzones and industrial
Trang 8parks; ILO experts, Management of FDIs; leading experts and scientists, etc., researcher
as professionals
4 Research methodology
The thesis has been conducted based on the combination of qualitative and quanlitative methods to answer the research questions Qualitative method has been used to analyze, evaluate and consolidate factors influencing strikes from socio-economic environment, government and laws and at the same time it has been used to establish framework and measurements for the research concepts while quantitative method has been used to check these measurements which are used in practice to come to conclusions on factors affecting
- Build up the model to inspect characteristics of employees affecting the probability of strikes in FDIs
- Find out factors and the influence of each factor on the intention to go on strike of employees in FDIs in the SKEZ
- Find out personal characteristics of employees that affects the probability of strikes in FDIs in the SKEZ
- Test, compare and evaluate evaluations of causes of strikes drawn from stasticstics perspective of State authorities and those of actual surveys of experts and employees
6 Practical and theoretical contributions:
From theoretical perspective:
- Review, consolidate and evaluate researches into the actual situations of industrial relations as price will fly in in Vietnam to find the gaps for the research as well as to serve as the bases for the for further researches
- Present, analyze, consolidate, compare industrial-relation-related theories applicable worldwide and in Vietnam to serve as bases for researches and applications in Vietnam
- Set up a framework to analyze strikes and industrial relations in Vietnam, which combine analyses of microeconomic and macroeconomics elements; qualitative and quantitative analyses
- Set up a framework using quantitative method to analyze factors influencing strikes including two-party and three-party industrial relations from four groups of factors: trade union, employees, employers and internal regulations system in businesses
- Establish quantitative analysis model to find out characteristics of employees affecting probability of strikes in FDIs
- Find out factors and the extent to which each factor affects the intention to go on strike
of employees in FDIs
- Find out personal characteristics of employees affecting the probability of strikes in FDIs
Trang 9- Test, compare and evaluate evaluations of causes of strikes drawn from statistics perspective of State authorities and those of actual surveys of experts and employees
From practical perspective:
- Evaluate the actual situation and characteristics of strikes of FDIs in the SKEZ
- Analyze and evaluate main causes of strikes in FDIs in SKEZ
- Evaluate characteristics of employees participating in strikes and probability of strikes
in businesses
- Suggest four groups of solutions to the Government, trade union, employers and employees based on the analyses of causes, actual situation, new contexts on the basis
of suggesting viewpoints, practical orientation that can help to prevent strikes and build
up harmonious healthy industrial relations
7 Content of the research:
The research includes an introduction, a conclusion and four chapters:
Introduction
Chapter 1: Basic issues and overview of strike-related researches
Chapter 2: Literature review and methodology
Chapter 3: Factors influencing strikes in FDIs in the SKEZ
Chapter 4: Viewpoints, orientation and solutions
Conclusions and suggestions for further researchers
CHAPTER 1: BASIC ISSUES AND OVERVIEW OF STRIKE-RELATED
RESEARCHES
Over the past years, the Labor Code was continuously amended and supplemented in
2002, 2006, 2007, and 2012 with the purpose of preventing and limiting consequences of strikes as well as promote and create basic foundation for rights and obligations of parties participating in industrial relations to step-by-step put these relations into legal framework However, building and improving industrial relations are facing great difficulties and challenges In this chapter, the thesis introduces and systemize concepts and definitions about labor, strikes as well as characteristics and interactions of actors in industrial relations; review strike-related and industrial-relation-related researchers of Vietnamese and international scholars to use as bases for researches and applications in controlling and managing labor market in the new era; finally it summarizes industrial relation management models and lessons learnt from prevention and limiting strikes in some countries Based on analyses and consolidation of some researches regarding strikes and industrial relations, the author has found out gaps to research
1.1 Terminologies and characteristics of strikes and related issues
1.1.1 Terminologies:
Definition: strike is basic human right of employeesacknowledgeda long time ago in
the legal documents of the United Nation, International labor organizationand in Vietnam and other countries in the world Regulating the right to go on strike in the labor code is one of the progresses the labor code; this embodies Constitution making it suitable into the market economy and guarantees the employees to have more conditionsto protect their own rights and benefits
Trang 10According to Article 209 of Labor Code (2012): “(1) A strike is a temporary, voluntary and organized stoppage of work by the worker’s collective in order to achieve the demands in the process of the labour dispute resolution (2) The strike shall only be carried out in regard to interest-based collective labour disputes and after the statutory period as stipulated in Clause 3 of Article 206 of this Code expires.”
Labor Code 2012 also defines some terminologies: Employee; Employer; Workers’ collective; The representative organization of the worker’s collective at grassroots level ở; The “representative organization of employers”; Labor dispute
The collective labour dispute on right means “a dispute between a worker’s
collective and the employer arising out of different interpretation and implementation
of provisions of labour laws, collective bargaining agreements, internal working
regulations, and other lawful regulations and agreements” A collective labour
dispute on interest means “a dispute arising out of the request of the worker
collective on the establishment of new working conditions, as compared to the provisions of labour laws, collective bargaining agreements, or internal working regulations, or other lawful regulations and agreements, in the negotiation process between the worker’s collective and the employer”
1.1.2 Characteristics of labour disputes and strikes
Characteristics of labour disputes: Labour dispute is understood as conflict that
arises to a high level where there are different actions happening One party will take
unilateral action while the other will carry out actions to prevent the former’ ones Characteristics of strikes: it is just a temporary stoppage of work in a certain period
of time without being long-lasting or permanent; a strike cannot be a personal action while
it is an organized action of a collective; According to the Labour Code, a strike is only carried out in the scope of a worker’s collective in regard to interest-based collective labour disputes for financial purpose, strikes must not be used for political purposes since this will
be considered a disguise of strikes or taking advantage of strikes to serve non-economic objectives; From economic perspective, the purpose of strikes is to achieve demands on rights and benefits for a worker’s collective; from social perspective, the collective nature
of strikes is a phenomenon that contributes to the instability of social order and can lead to disorder and panic of people and community; from political perspective: strikes can be a phenomenon that causes political unrest in a country
1.1.3 Actors in industrial relations
The Government, employer and his representative, employee and Trade union as his representative
1.1.4 Interactions in industrial relations
Figure 1-1: actors in social dialogue at a business with trade union; Figure 1-2: Business without trade union; Figure 1-3: Industrial relations and labour criteria
Trang 111.1.5 Characteristics of industrial relations:
Martin and Bamber (2005) define four "characteristics” that lead to the differences among industrial relations of countries, namely, role of the government, autonomy of business management, characteristics of Trade Union and the role of collective bargaining
1.1.6 Industrial relations system
Industrial relations system of each country includes elements of industrial relations which form a frameworks of the whole industrial relations system Each country has its own industrial relations system An so-called adequate system comprises of 6 elements: representative, conciliation, arbitration, court, counseling, government's management
1.1.7 Law and regulations on resolution of Labor disputes and Strikes
Labor-dispute-related and strike-related issues are regulated in details in Chapter XIV, including 41 articles from article 194 to 234 of Labour Code 2012
1.1.8 ILO's Conventions regarding labor disputes and
Convention No 87; Convention No 98; Convention No 105; Convention No 131; Convention No 135; Convention No 154; Convention No 173
1.2 Overview of strike-related researches in Vietnam and worldwide
1.2.1 International researchers regarding strikes
Strikes due to failures in negotiations: Hicks (1932) claimed that strikes happened
because of mistakes or failures in negotiations Gramm, (1987) and McConnell, (1987), two American researchers also found out that strikes took place at the rate of 13% in contract negotiation with from 1,000 employees Gunderson et al (1986) in Canada found out that strikes happened at the rate of 13% with contract negotiation with from 200 employees According to Card, (1990) strikes due to failures in negotiation in the US and Canada is from 10% and reached the peak of 35% in 1970s to 20th century
Strikes due to interest conflicts and asymmetric information: Kennan and Wilson
(1993); Fernandez and Glazer (1991) claimed that strikes took place to find out balanced results of actions in reasonable framework and adequate information Function of strikes
is to improve information of either party so that they could match their expectations
Strikes due to macroeconomic factors such as economics, inflation and unemployment: According to Harrison and Stewart (1989), strikes relates to business
cycle Their findings are strong enough to confirm that business cycle (GDP, unemployment rate, agricultural production cycle) is related according to Vroman (1989), Booth and Cressy (1990), and Ingram et al (1993) Ashenfelter and George Johnson (1969) Cramton et al (1999) had the same findings
Employee Mechanisms & procedures
Mechanisms of labor relation
Salary Working time Rule of working Safety Other
Social community
M sm p
du re
s M ech anis
& p roc edu res
Figer 1-1
Figer 1-2
Figer 1-3
Trang 12Strikes due to internal microeconomic factors in businesses: Alutto & Belasco,
(1974); Feng, (2006), Snyder, (1975), Dixon, (2003); Roscigno, (2001, 2004), Velden (2012)…cclaimed that strikes were due to employee’s job dissatisfaction and distinctive features of businesses
In summary, overseas empirical researches into strikes shows different findings depending on approaches, models and research methodologies as well as data collected from different sources Each method or approach has its own strengths and weaknesses However, you can see four main approaches depending on different background theories which find out different evidence leading to strikes of employees They are (1) Bargaining Theory, (2) Asymmetric information, (3) Analyzing strikes based on business variables such as business cycle , inflection, unemployment, and (4) Researches based on Behavior Theory/ job satisfaction, which means job satisfaction of employee decides whether strikes happen or not Each approach has found out authentic evidence of causes of Strack's in different historical periods Characteristics of strikes overseas are that they are lead by trade union and and trade unions an independent representative of employees And strikes are for benefits not for rights, which means employers always obey laws and regulations
in implementing employment agreements or collective bargaining agreements
1.2.2 Strike-related researches in Vietnam
Researches on strikes and labour disputes: researches of Nguyễn Ngọc Quân
(1997), Phạm Xuân Hương (2001), Vương Vĩnh Hiệp (2014), Phan An (2008), Dương Văn Sao (2009), Vũ Quang Thọ (2012) Đỗ Thị Vân Anh (2010), Nguyễn Hữu Dũng (2012), Jeoung Yo Kyung (2013) and Jan Jung-Min Sunoo (2007)
Researches on industrial relations and tripartite consultation system: Vũ Việt
Hằng (2004), Lê Quang Sang et al (2010), Nguyễn Duy Phúc (2011), Phạm Ngọc Thành (2015), Nguyễn Viết Vượng (2010), etc.,
Reseaches from legal perspective regarding industrial relations and strikes: Đỗ
Ngân Bình (2005), Nguyên xuân Thu (2009), Nguyễn Xuân Thu (2008), Lê Thị Hoài Thu (2012), Vũ Thị Thu Hiền (2016), etc.,
Reseaches on building and developing labour forces: Nguyễn Đăng Thành (2007),
Nguyễn Thị Lan Hương (2009), Lê Duy Bình et al (2009), Trần Kim Dung (2005), etc., Researches regarding strikes and Industrial relation in Vietnam show that strikes in Vietnam have the following characteristics: (1) all strikes are spontaneous, not following the procedures and processes stipulated by law, (2) trade unions are not independent since they are formed and paid by employers, (3) most of strikes are for the rights (which are banned according to the labor code) because the employers do not implement the employment contracts correctly, (4) causes of strikes come from mistakes of three parties, namely, the government, employers, employees and their represetative - trade union, (5) most of the strikes happened in FDIs in Ho Chi Minh City, Dong Nai Province and Binh Duong Province
1.3 The gaps
So as we can see, there have been a lot of researches into strikes, industrial relations and labor legislation in generak at different types of businesses These made great contributions into building harmonious industrial relations and contribute to limitation and prevention of Labor disputes and strikes over the past years However, research used in
Trang 13Vietnam mainly based on qualitative methods to find out results focusing on reflecting the actual situation using statistics tools, describing data recorded by Department of Statistics and local governments Some researches have used data from sociological surveys but have not use quantitative method to perform regression analysis to fight down factors affecting strikes as well as suggest a model that can be used widely these researches took place at the same types of business in different places in Vietnam Particularly that have not been any researches to identify factors influencing strikes, characteristics of employees attending strikes as well as to analyze competence, attitude and conflicting natures of actors
in FDIs in the SKEZ in an open system of socio-economic and political environment of Vietnam and this is the main cause of strikes in FDIs in in the SKEZ over the past years Therefore, profound researches into strikes in FDIs in in the SKEZ using the combination
of qualitative and quantitative methods is new approach that has scientific and practical contributions because it does not overlap the previous researches
Conclusion of chapter 1
From the basic issues of strikes, we can see that strikes have existed for a long time and Hoffman acknowledged buy more sap countries in the world Going on strike is the basic and legal right of employees Labor legislation of Vietnam adknowledges the right to go
on strikes of employees and has the procedures to guide strikes adequately in details After reviewing researches regarding spice and Industrial relations in Vietnam and what why the offer has filed the gaps for his research
CHAPTER 2: LITERATURE REVIEW AND METHODOLOGY
The objective of this chapter: the author tries to (1)systemize, consolidate and compare theories and models to analyze Sprites and Industrial relations to use them as bases for analyzing and doing research in the following chapters; (2)study the actual building and managing industrial relations and resolve labour disputes and strikes in some countries of which historical background, economic and political system and culture are similar to those
of Vietnam or countries with advanced industrial relation management that Vietnam want
to direct to; (3) build up concepts, framework and model to analyze factors influencing strikes and selecting suitable methodology to achieve the objectives of the thesis
2.1 Strike-related and industrial-relation-related theories
2.1.1 Strike theories
2.1.1.1 Political and organizational theory of strike
According to this view, individuals organize themselves to pursue common interests, and strikes occur to the extent that there is an organizational capacity for such action As the Webbs suggested, there are two general methods by which the trade union movement can secure its objectives: either by bargaining directly with employers or by using the legislative process of legal enactment Availability of the latter method results in strikes being related to political events
2.1.1.2 The Theory of Bargaining and Strike Activity
This theory attributes more strategic autonomy to labor and management, assuming that each party has perfect information about the other's intentions According to the bargaining theory, economic conditions are the most important determinant of the propensity to strike
Trang 142.1.1.3 Accident theory of strike
It contends that the majority of strikes are the result of faulty negotiation This point
of view contends that a good way of reducing strikes is to identify variables that increase uncertainty for one or both parties in the bargaining process The probability of strikes may be determined by the institutional settings of collective bargaining which may include the organizational structure, customs, and practices
2.1.1.4 Social change theory of strike
This theory views rapid social change as a source of societal strains That is, rapid industrialization and urbanization break down social groups, generate anomie, and consequently lead to protest Strikes are one manifestation of this protest
2.1.1.5 The Agitator ‘Theory’ of Strikes
This theory argues that “every strike has a cause’ was misleading and one-sided because it threw no light on either why workers believed a problem was a grievance or why grievances led to strikes; in fact, grievances themselves were rarely self-evident, they usually needed pointing out, fomenting, exacerbating and ultimately exploiting
2.1.2 Marx theory
The point of view the Marx Theory represents that workplace relations by the reflections of the in equality and the conflict of interest between the parties in the society and this is inevitable Trade union is the representative of the employees to counteract the capitalists' exploitation and also is a weapon to bring progressive changes to society The fact that trade union should focus on improving the position of working-class in the capitalism system is necessary
2.1.3 System and model of industrial relations according to Dunlop
Figure 2-1: Industrial Relation Model according to Dunlop 1958
Dunlop model covers three groups of actors: government, employer and employee, other factors influencing the industrial relations affected by outside conditions including technology, market and the great impact of other factors of the three other mentioned groups of actors According to Dunlop, the form of rules are outputs that the industrial relations system is looking for Rules in this context includes (1)rules to control all payments; (2) expected responsibilities and results from employees including discipline rules; (3)rules to identify rights and obligations of employees and employers including law and regulations and terms and conditions of collective bargaining agreement; (4) formalities to build up rules and (5) formalities to apply the rules
2.1.4 Interest and Incremental Institutional Change
The basic principle of this model is that compliance and promulgation of rules are far from perfect There are always future situations that policy makers cannot predict Besides,
26 distributed among the three ‘actors’ The three ‘actors’ hold common belief that employees are entitled to demand for a minimum quality of living Besides, discussion and bargaining must be the preferred way to solve disputes and that the state does not have a limited but clear roles as an arbiter in certain matters (Singh & Singh, 2011) The Industrial Relations Model envisaged by Dunlop reflects the existing Kenyan Tripartite Consultation System The Dunlop's System Model is shown (see Figure 2.1)
Rules
Ideology
Input
Figure 2.1: Dunlop’s Systems Model
Source: Singh & Singh (2011)
The heroic assumption by Dunlop that the ideology of Industrial Relations System must be one or compatible inspite of the fact that each actor has its own ideology has been challenged that if the system of industrial relations is so well integrated, and if the goals and values of the actors are so much in agreement, how is it that industrial conflicts occur at all? This assumption is spurious in reality (Frege, Kelly & McGovern, 2011)
Trang 15and at different times, they can be interpreted in a way that policymakers cannot predict in advance In addition, policymakers, rule builders and society participate in a continuous interaction process
2.1.5 Theory of behavior and job satisfaction
Job satisfaction is the attitude toward the most widely studied work among topics studied in industrial psychology, psychology and organizational behavior According to Henne & Locke, (1985), resistance is another form of action that an unhappy employee can use and resistance is also a form of protest by trade union People tend to join trade union for a number of reasons, including obtaining support if there are any problems at work or seeking for improved working conditions and pay A strike is often an effort to change the cause of job dissatisfaction
2.2 Practice of building industrial relations and resolving labour disputes and strikes in other countries
In this section, the thesis focuses on researching the practical construction of industrial relations and solutions for dealing with strikes in 4 countries: China, Korea, Japan and
Germany Lessons learned in the development of a harmonized industrial relation to limit strikes for Vietnam
The State promulgates and implements fully the legal system of labor to manage and develop harmonious industrial relations at National, Regional, industry and enterprise levels; Establishing Industrial Relations Council from the central to local levels; Establishing a Labor Court as an independent court system; the State Labour authorities always monitors closely to actively intervene and solve labor disputes right from the beginning; setting up representative bodies of employees in private businesses; collective bargaining is the responsibility of both the employer and the representative of collectives
of employees; Mechanism for resolving labor disputes based on the use of various diversed methods of settling disputes through negotiation, mediation/conciliation councils,
arbitration or court, etc.,
2.3 Factors influencing strikes
Based on the literature review of strikes and industrial relations and gathering, systemizing, analyzing and combining researches related to strikes in Vietnam and other countries, the author realized that there are six groups of factors influencing the intention
to go on strike up employees Among these five groups have direct influence, namely, (1) group of government and labour law-related factors, (2) group of internal-regulation-related factors, (3) group of employer-related factors, (4) group of trade-union related factors, (5) group of direct employee-related factors Besides, group No 6 is that of factors relating to macroeconomic environment such as business, inflation, unemployment rate, population and labor, culture-society, development strategy as wel as national science and technology advance level, etc, that indirectly influence strikes