Working conditions and productivity

When dialogue makes good sense for businesses and workers alike

The successful introduction of effective and regular systems for employers and workers to communicate has boosted productivity and improved working conditions in a Viet Nam auto production company. It has also shown how important it is for such initiatives to be replicated more widely so that new laws bring real, grassroots change.

Feature | 01 May 2015
DONG NAI, VIET NAM (ILO News) – After 17 years with the Japanese-owned Mabuchi Motor Company, Tran Truong Nguyet Tien is a little jealous, but also proud, of the conditions her younger co-workers now enjoy at the automobile motor factory in Viet Nam’s southern province of Dong Nai.

Tran Truong Nguyet Tien is a worker representative who has helped improving factory lunches at Mabuchi Motor by negotiation mechanisms.
“Young workers now, especially females, have a much better working environment here than we did several years ago,” said the 40-year-old woman.

Workers’ lunches are now better and offer more choices. The women’s bathrooms and toilets have also been improved – an important factor when 85 per cent of the workforce is female. Employees who are pregnant now have their own, safer, motorbike parking areas and no longer lose part of their bonus when they take time off for their legally mandated maternity check-ups.

According to Tien, these changes have made a real difference. “When I was expecting my two children, for instance, I struggled to get my motorbike out of a jungle of vehicles and ride it to the ground from the elevated parking areas. It was really dangerous!”

The changes that have made the lives of the company’s 5,300 workers better came following the introduction of new systems for formal and informal discussions between the management and workers. Tien, who was elected as one of the workers’ representatives more than a year ago, was one of those who helped set up the improvements.

The new systems were introduced following a series of wildcat strikes between 2006 and 2008, which caused heavy losses.

Then, in 2013, Viet Nam introduced a new Labour Code that made regular dialogue between employers and workers compulsory.

Annual workers' congresses are opportunities for workers to elect their representatives who will regularly communicate with their employer on their behalf.
Mabuchi Motor was selected as a pilot company to receive support in setting up effective systems for dialogue between management and workers. The project was implemented by the International Labour Organization (ILO) through the US Department of Labor-funded Industrial Relations project.

As a result, gradual but concrete improvements have been made. Workers are now able to communicate with their employer every three months through their workers’ representatives (who are elected annually), and monthly through the trade union. In addition, ad-hoc meetings can be called when either side feels the need, and workers can also drop letters in confidential boxes at the production sites.

“We can easily reach the management now, making workers like me feel that our voice is always heard, and we no longer need to go on strike,” said Dong Ngoc Tram Anh who has been working at Mabuchi Motor for 13 years. “Things were not like that here before and talks with the employer neither happened in my previous workplaces.”

“Both the company’s board of management and workers were aware of how important dialogues are, and the trade union played an active role in pushing the employer and taking the lead in the process of developing specific policies for regular and irregular discussions,” said Pham Thi Phuong, the company’s trade union chairwoman.
Mabuchi Motor is one of the pilot enterprises that has received support from the ILO through the USDOL-funded Industrial Relations project to develop effective dialogues between the management and workers.

Pham Hoang Duc Nam, Mabuchi Motor’s Vice General Manager, agrees that the company has benefited a lot from these improved communication mechanisms.

“Through dialogues, we can understand the concerns and interests of our workers, respond immediately and consider a change if finding them reasonable. By doing so, we can prevent wildcat strikes from happening in the first place and thereby minimize damage to the company’s production activities,” he said.

Nam also point out that there was a 44 per cent increase in productivity in the six years between 2008 and 2014, and the staff turnover rate has also fallen, from 3 per cent in 2008 to 1 per cent in 2014. He believes these improvements reflect a greater commitment among workers, resulting from improved trust in management.

The Director of the ILO’s Viet Nam Country Office, Gyorgy Sziraczki, believes that the establishment of regular contact between employers and workers in companies will only be successful if the companies see real benefits coming from such systems and both sides are equipped with better negotiation skills.

“They have to make business sense. Only when businesses see why dialogues are good for their productivity and competitiveness, especially in the context of Viet Nam’s economic integration, will they be committed to rolling out such mechanisms in a sustainable way,” he said. “But much needs to be done in reality to encourage other enterprises to follow the success stories like Mabuchi Motor and make the laws more effective on the ground.”