Social dialogue

Better talk leads to better work

As Viet Nam prepares for a major expansion of international trade – with the Trans-Pacific Partnership and Free Trade Agreement negotiations – a new system for worker-employer relations in garment factories is helping to pave the way to improved working conditions and competitiveness.

Feature | 09 December 2013
© ILO/Aaron Santos
HANOI (ILO News) – For the employees at Ando International, a women’s wear manufacturer in Ho Chi Minh City, 7 September 2012 was a special occasion. For the first time the company’s 900 workers were voting to select a co-worker to represent them in a new system of regular meetings with the factory management.

Their new workers’ representatives, together with a trade union leader, sit down as equals with management every month to resolve problems related to labour standards and strengthen workplace relations.

This mechanism, the Performance Improvement Consultative Committee (PICC) was introduced in 2009 by Better Work Vietnam– a joint programme of the International Labour Organization (ILO) and the International Finance Corporation (IFC). Workers representatives elected through it serve for two years.

Already the PICC system is producing concrete improvements in the factories where it is running - in working conditions, wages, welfare, occupational safety, workplace hygiene and working hours – and it has gained the approval of both employers and workers.

After more than a year of working with the new system, Duong Thuy Tu, Ando International’s Managing Director, says PICC meetings have brought “a big change” and raised workers’ awareness [of occupational safety and health] and significantly improved workplace cooperation.

Vo Kim Long, who has been at the factory for more than six years, agrees. “Our workshop is now more spacious and tidier, which brings us more air while working. It’s because the issue was raised at PICC meetings and they sorted it out,” he said, adding that with their own representatives on the PICC, workers “can now communicate with the managers”.

According to the head of the company trade union, Phan Ngoc Vuong, the new mechanism has “really upgraded trade union activities and improved its effectiveness”.

“We can see better law compliance in enterprises with PICC,” said Mai Duc Chinh, Vice Chairman of the Viet Nam General Confederation of Labour.

The Director of the Government’s Centre for Industrial Relations Development, Nguyen Manh Cuong, points out that the PICC is important not just because it gives workers a say in dealing with labour standards compliance issues, but it is also “a seed and a real example” of the regular dialogues between workers and employers required by Viet Nam’s new Labour Code, introduced in 2013.

PICC’s have already been set up in almost all of the 200-or-so garment factories in the Better Work programme in Viet Nam. The programme plays a key role in aligning private sector expectations with Viet Nam’s laws and core international labour standards, using coaching, training and compliance assessment.

According to Better Work Global Operations Manager, Tara Rangarajan, the compulsory social dialogue that PICC establishes shows that Viet Nam is a country “working to differentiate itself in the international market place on more than cheap labour. These are the companies that will have long-term growth and will be able to establish the working environment necessary to attract international buyers and remain competitive”.

Better Work Vietnam assessment reports have found consistent improvements in factories that integrate strong industrial relations into the heart of their business strategies. Around 65 per cent of factories that have joined the Better Work programme have seen a rise in their sales and 75 per cent have seen an increase in order size.

Nguyen Manh Cuong also believes that PICC has a broader significance and can benefit the overall national economy. “When every company improves, the entire national garment industry will improve and Viet Nam’s economy as a whole will have a better image in the international market,” he said, adding that PICC also showed the Government’s commitment to improve workers’ conditions as the country opens up to the global economy.

“[Better Work is] a good model for enterprises in their international trade expansion, particularly when Viet Nam is preparing for such big games as the Trans-Pacific Partnership and the Free Trade Agreement negotiations with the EU”, he added.

The Better Work programme (which is funded by the governments of Australia, Canada, the Netherlands, Switzerland and the USA), has reached more than 230,000 workers in about 200 factories, equivalent to a quarter of the garment exporters. More than 50 international buyers and retailers also subscribe to the programme.