September 09, 2019 Issue: September 2019

VIETNAM - Ratification of Convention 98 – an opportunity for institutional reform in Vietnam

By: Tran Thi Kieu Trang

In June 2019, Vietnam took progressive steps in Vietnam's economic integration process in general and promising reform of labour legislation in particular by ratifying ILO Convention 98 on the Right to Organise and Collective Bargaining on June 14, 2019 and signing the European Vietnam Free Trade Agreement on June 30, 2019.

The ratification of Convention 98

All of 452 deputies presented at the National Assembly session 7 of QH 14 on 14 June voted yes to the ratification of ILO Convention 98 concerning the Application of the Principles of the Right to Organise and to Bargain Collectively (1949), marking a milestone in the country’s ongoing labour reform. 

Convention 98 (C98) is one of the eight ILO core conventions under the ILO's 1998 Declaration on Fundamental Principles and Rights at Work, including freedom of association and the effective recognition of the right to collective bargaining; the elimination of all forms of forced or compulsory labour; the effective abolition of child labour; and the elimination of discrimination in respect of employment and occupation. According to the 1998 Declaration, all ILO member states should respect and apply the principles and rights in four categories, whether or not they have ratified the relevant Conventions. Convention 98 was first adopted by the International Labour Organization in 1949, and it is the sixth among eight core conventions that Vietnam has ratified, which requires the Vietnamese government to implement legal and institutional reforms to promote collective bargaining and provide adequate protection against discrimination by employers of worker or union officials, and protect against interference of unions by the State, employers or other unions. It guarantees collective bargaining as a voluntary process between independent and autonomous parties.

The ratification of Convention 98 drew public attention since Vietnam negotiated to sign Trans Pacific Partnership (TPP) and European Vietnam Free Trade Agreement (EVFTA). Both of the FTAs require Vietnam to respect the core labour standards in the Declaration 1998, including C98. Officially, on April 10, 2013, the Politburo of the Central Committee of the Communist Party of Vietnam issued Resolution 22-NQ/TW on international integration (Resolution 22). This Resolution has a very important meaning, detailing foreign policies and the principle of "proactive and vigorous international integration" proposed by the XI National Party Congress. Accordingly, on 13 May 2014 the Government issued Resolution 31/NQ-CP, which sets out the Action Plan to implement Resolution 22. On 31 December 2015, the Prime Minister issued Decision 2528 /QD-TTg, on Approval of the Implementation Plan and the proposed ratification of UN and ILO’s conventions in the field of labour and social issues from 2016 to 2020. The Decision 2528 /QD-TTg stated that the Government of Vietnam (GoV) would consider the possibility of ratifying Convention 98, Convention 87 and Convention 105 which are three core labour conventions that Vietnam had not ratified in 2015.

Approval of C98 was further reaffirmed after the National Assembly signed the Comprehensive and Progressive Trans-Pacific Partnership (CPTPP or TPP 11) on 12 November 2018. Specifically, in the Decision 121/QD-TTg of the Prime Minister on the Action Plan to implement the Comprehensive and Progressive Trans-Pacific Partnership, GoV set a roadmap in which, Ministry of Labour, Invalids and Social Affairs (MOLISA) must submit the dossier for the ratification of C98, C105, and C87 in 2019, 2020, and 2023, respectively.

Following this roadmap, on April 12, 2019, President Nguyen Phu Trong presented a report on adopting Convention 98 to the National Assembly and the Government made an explanation report on ratifying this convention.

Internal and external driving forces behind the changes

The ratification of C98 is considered as a gift from Vietnam for the 100 year anniversary of the ILO but in fact, it demonstrates the strong political commitment of the Vietnamese government. On the one hand, both the CPTPP and EVFTA require Vietnam to reaffirm its commitments under the 1998 ILO Declaration on Fundamental Principles and Rights at Work. On the other hand, it is an opportunity for Vietnam to step into a new phase of labour and institutional reform, and to help to solve internal conflicts in Vietnam's labor relations with a high rate of strikes and labor disputes. Thousands of strikes have occurred in Vietnam since socio-economic reform in 1986; all wee wildcat strikes.

Many politicians and researchers believed this adoption of C98 would accelerate institutional reform in Vietnam, thereby promoting voluntary and genuine collective bargaining. This is the foundation for operating a labour market in Vietnam consistently with the objective rules of a market economy. The ILO-Vietnam has played a very important role in providing technical support to MOLISA in developing explanatory documents for the approval of C98; and promised to keep on supporting GoV in the future by Dr. Chang Hee Lee, the ILO Vietnam Director. He also has expressed confidence that Vietnam will successfully achieve a future built on higher productivity, better working conditions, the fair sharing of economic gains, equality, the recognition of the voices of workers and employers, and political and social stability.

Subsequent obligations of Vietnam

The current applicable Vietnamese law is considerably compatible with C98, except the voluntariness in collective bargaining. Therefore, to prepare for the ratification of C98, the GoV also initiated labour laws reform. Recently, a new draft of the Labour Code was published on the website of National Assembly on 29 April 2019 for public opinion. In this draft, the principle of voluntariness in conducting collective bargaining is supplemented; the regulation on periodic bargaining is removed; independent workers representative organization from VGCL can be established; function and authority of VGCL’s trade union is amended (in case of no workers  representative organizations at the grassroot level, the bargaining actor level would not be automatically VGCL trade union at the higher level); level of collective bargaining is extended (Multiple Enterprises CBA is added); etc. In addition, a series of reforms on labor dispute resolution, opening up various mechanisms for resolving disputes, expanding the authority of the Labour Arbitration Council.

From the workers representative’s point of view, the Vice-Chairman of VGCL, Mr. Ngo Duy Hieu, supported the ratification of C98, and confirmed that VGCL will continue its reform. He admits that the permission to establish a non-VGCL independent workers representative organization is an unprecedented issue in the 90-year history of the Vietnam trade union. Thus, VGCL is submitting to the competent authority a Plan of reforming the organization and operation of trade unions, building a lot of working programs closely following the requirements of CPTPP and international integration, renewing the political system.

What’s about Convention 87

In the Declaration 1998, freedom of association and the effective recognition of the right to collective bargaining can be considered as two sides of a coin. When Vietnam ratified C98, some people said that it was meaningless without C87. But as planned in the Decision 121/QD-TTg of the Prime Minister, the C87 will be ratified in 2023. And as a one-party ruling country, Vietnam is taking bold steps in the right direction, and progressive changes have been proposed in the Draft of the Labour Code 04/2019. These are reflecting Vietnam’s strong commitments to integration and ensuring basic international labour standards.

Tran Thi Kieu Trang

Lecturer in Labour Law, Hanoi Law University, Vietnam