Labour relations

New pillar within Viet Nam’s labour dispute settlement system operational, expected to help workers and employers

Hearing held by the Dong Nai Labour Arbitration Council marks the first case to be arbitrated in Viet Nam.

News | 28 November 2022
Launch of the Dong Nai Labour Arbitration Council in Viet Nam. © ILO
HANOI, Viet Nam (ILO News) – Viet Nam’s labour dispute resolution system has taken a step forward with the launch of a provincial labour arbitration council in Dong Nai province.

Dong Nai was among the first group of arbitration councils to be established in Viet Nam under the framework of the 2019 Labour Code.  The Dong Nai Labour Arbitration Council received its first case on 11 October 2022 – a labour dispute that could not be resolved via mediation. The first hearing session took place on 7 November, marking the first case to be arbitrated in Viet Nam.

“Congratulations to the Ministry of Labour, Invalids and Social Affairs and Dong Nai Arbitration Council for this great achievement, said Phillip Hazelton, Program Manager for the ILO Viet Nam New Industrial Relations Framework (NIRF) Project.  “Developing an effective labour dispute settlement system is a key pillar of modern industrial relations and this launch is a significant step on that pathway,” he said.

While this is the beginning of the new arbitration process, the need for a strong labour dispute resolution system is clear for all players in industrial relations. The 2019 Labour Code allows more opportunities for interactions between employers and workers through collective bargaining, dialogue processes and joint engagement in dispute resolution, while the role of government is shifted to focus more on setting standards, facilitating engagement of social and labour market actors, legal compliance and enforcement.

The labour dispute prevention and resolution system, comprising both mediation and arbitration services, aims to help improve industrial relations within enterprises and assist disputing parties resolve disputes quickly and effectively, preventing them from escalating into major disputes while also reducing the need for often lengthy and expensive court proceedings.

Since May 2021, the ILO in Viet Nam, through both the US Department of Labor-funded project New Industrial Relations Framework – NIRF and the EU-funded project on Trade for Decent Work – T4DW, has been supporting its partners, Ministry of Labour, Invalids and Social Affairs (MOLISA), Dong Nai, Binh Duong and HCM City (DOLISAs) to design a pilot to implement new provisions on labour dispute resolution under the 2019 Labour Code.

The ILO has supported the Government to implement the new legal requirements through technical advice, support to new guidelines for their operation, development of new training packages, training for arbitrators nominated by tripartite partners, as well as mediators at provincial and local level.

Speaking at the launch of the Dong Nai Arbitration Council, Mr Nong Van Dung, Vice Director of Department of Labour, Invalids and Social Affairs of Dong Nai Province and Chairperson of the Labour Arbitration Council remarked, “The pilot to strengthen the labour dispute resolution system has enabled us to consolidate our labour dispute settlement mechanisms, establish a focal point to receive the requests for resolving disputes, and put them into operation in a systematic manner. In particular, when mediation fails, the two disputing parties are advised to choose the next mechanism, which is the Labour Arbitration Council or the Court. Each mechanism has its own functions, strengths and weaknesses. I strongly believe that the Labour Arbitration Council offers an approach to settle labour disputes in a harmonious, lawful and relatively timely and cost saving manner, at the same time, still help both parties to preserve their own reputation.”

The new system is expected to provide opportunities for qualified experts other than government officials to also be included as labour mediators and arbitrators.

In 2023, the pilot will continue to support the new labour dispute resolution system to demonstrate its truly effective operations, develop skills and a Code of Conduct for mediators and arbitrators, and have a reporting system in place for all labour disputes recorded. Lessons and experience from this pilot will also be shared with other Cities/Provinces to strengthen the system more broadly in the country.

Labour disputes are disputes concerning the rights, obligations or interests that arise between workers and employers and their representative organizations. Labour disputes include individual, right-based collective, and interest-based collective disputes.

In Viet Nam, a labour mediator is a person appointed by the Chairperson of a Provincial People’s Committee for the purpose of mediating labour disputes and disputes over vocational training contracts and supporting the development of labour relations.

Labour arbitrators are persons who have a knowledge of the law, experience in labour relations, credibility and impartiality, who are appointed by Provincial People’s Committee. Labour Arbitration Councils must comprise of at least 15 labour arbitrators with equal membership from tripartite partners at provincial level.

Before this pilot, the ILO had provided technical assistance to the National Assembly and tripartite partners in Viet Nam during the 2019 Labour Code development. For labour dispute resolution, the ILO NIRF project conducted a number of situation assessments including to suggest options for labour dispute resolution system improvement. The project also supported the consultation process for finalization of the provisions on labour dispute in Decree 145/2020/ND-CP.

At the launch of Dong Nai Labour Arbitration Council, arbitrators from Dong Nai Province nominated by trade union, employer association and DOLISA with Dong Nai DOLISA Director, Ms Nguyen Thi Thu Hien, Mr Nong Van Dung Chairperson LAC, ILO Country Director for Viet Nam Ms Ingrid Christensen and NIRF Project Manager Phillip Hazelton.