Just a few days ago, a collective strike involving about 6,000 workers in Vietnam finally came to an end. This is the largest strike in Vietnam since the beginning of 2023.

The strike started on the afternoon of October 2, when workers put forward 8 demands, including an increase in basic wages. It ended on October 8 after the company announced that it had met some of the demands and all workers returned to work.

It is understood that the company is a Taiwanese footwear manufacturer located in Nghe An Province, Vietnam. The factory was put into production in 2019. This is the third collective strike the company has faced.

In 2021 and 2022, the company also experienced collective strikes by thousands of workers, and only resumed work after some demands were met.

Is it legal for Vietnamese workers to strike? How should companies in Vietnam prevent and respond to strike risks?

Vietnam is a country that clearly stipulates the "three rights of labor", namely the formation of trade unions, collective bargaining and strikes.

The "Vietnam Labor Law" forces employers to form trade unions, and grassroots trade unions have strong power. Grassroots trade unions have the right to decide or Veto power, especially organizing strikes.

Article 198 of the "Vietnam Labor Law" stipulates: "Strike refers to a temporary, voluntary, and temporary strike organized and led by employee representative organizations as parties to collective labor disputes with the right to collective bargaining to realize their demands during the process of labor dispute settlement. Organized work stoppages.

Labor disputes in Vietnam are divided into individual labor disputes and collective labor disputes. Collective labor disputes are further divided into collective labor disputes related to rights and collective labor disputes related to interests.

Strikes can only be carried out by employee representative organizations in accordance with legal procedures within the scope of collective labor disputes related to interests.

Before a strike, employee representative organizations should hold a vote among employees and obtain the consent of more than 50% of employees before going on strike.

If a majority of employees are in favor of a strike, the employee representative organization must issue a strike decision, which should contain: the results of the vote, the time and place of the start of the strike, the scope of the strike, the employees' demands, and the full names and addresses of the employee representatives and organizational representatives leading the strike .

The decision to strike must be sent to the employer, district people's committee and provincial labor department at least five working days before the start of the strike.

A strike will be considered illegal if:

Although the Vietnamese Labor Code sets strict and cumbersome conditions and procedures for strikes, almost all of the previous strikes in Vietnam were "wildcat" strikes organized by labor voluntarily.Although these strikes do not comply with the relevant procedures and conditions of the law, they generally will not be strongly suppressed by the Vietnamese authorities.

During the strike at a Taiwan-owned shoe factory in Nghe An Province, the Vietnamese police summoned many workers who instigated the strike, which is a rare event in Vietnam.

In addition, in the face of strikes, the Vietnamese government also has a trump card in its hands.

In Vietnam's current legal system, there are detailed regulations on the conditions and procedures for legal strikes, and there are also institutional arrangements for "strike legality review."

Once a strike is deemed illegal, the initiative is in the hands of the authorities.

According to data from the Vietnam Federation of Trade Unions, in the first quarter of 2023, a total of 23 strikes occurred due to labor disputes in enterprises in various provinces and cities across Vietnam, a decrease of 64 cases compared with the same period in 2022.

It is worth mentioning that these strikes were mainlyForeign-invested textile, footwear, electronics and other enterprises concentrated in southern Vietnam. Among them, 20 cases occurred in the southern key economic zone, accounting for 86.95% of the total.

So how should companies in Vietnam prevent and respond to strike risks?

Based on Vietnamese law and past experience, Panda Overseas believes that we can start from the following aspects:

The most fundamental thing isChange the inherent thinking model of domestic employment training,To become deeply familiar with and understand the local labor and employment legal environment in Vietnam, improve law-abiding awareness, pay attention to the compliance management of labor relations, and formulate reasonable compensation plans to reduce the frequency of collective labor disputes from the root cause.

Second employerSpecific provisions on how to compensate for losses caused by illegal strikes to the enterprise can be formulated in the labor contract and rules and regulations., to restrain workers from holding illegal strikes at will.

Regarding trade unions, enterprises can establish trade unions and collective consultation systems in accordance with the requirements of the Vietnamese Labor Code.Take the initiative to establish a good communication and consultation mechanism between labor and management, enhance collective bargaining capabilities.

For employees, companies should regularly take the initiative to understand their living conditions, thoughts and demands, and pay attention to solving their legitimate and reasonable demands.Promptly discover and stop behaviors that instigate, induce, incite, or force employees to strike, maintain the harmony of employee relations.

If a strike occurs, contact local labor officials, district or provincial labor federation officials and other relevant authorities immediately. If any violence, threats of violence, or damage to property occurs, please notify local police.

Also, try to identify and talk to strike leaders to find out what the problem is. But be careful about making promises in your communications. Maintain close contact and cooperation with mediators, arbitration committees and relevant institutions during the dispute resolution process.

The conflict between labor and capital is a long-standing problem. The employers naturally hope to reduce costs and obtain more profits, while the workers hope to obtain more benefits.

How to handle labor relations carefully and prevent the risk of strikes is a difficult problem that enterprises in Vietnam must face.

Panda Going Global is a one-stop cross-border enterprise service platform that tailors overseas solutions and supporting implementation services for Chinese companies.Help Chinese companies avoid pitfalls when going global.

Please note that the overseas content involved in this article is based on publicly available overseas laws and regulations, cases, documents and reports, as well as the practical experience of pandas going overseas. Furthermore, due to the complexity of tax laws in various countries/regions, there may be errors or omissions in them or they may not be updated in a timely manner due to changes in tax systems. Therefore, the above content does not constitute any legal advice from Panda Overseas.