MINISTRY OF EDUCATION AND TRAINING MINISTRY OF JUSTICE
HANOI LAW UNIVERSITY





DO THI DUNG






LAW ON EMPLOYERS' RIGHT TO LABOUR
MANAGEMENT IN VIETNAM


Field of Study : Economic Law
Code : 62 38 01 07





ABSTRACT OF DOCTORAL THESIS ON LAW STUDIES

HANOI - 2014





Training instituation:
HANOI LAW UNIVERSITY

Supervisor: 1. Assoc. Prof. Dr. Nguyen Huu Chi
2. Dr. Tran Thi Thuy Lam



Opponent 1: Assoc. Prof. Dr. Hoang The Lien

Opponent 2: Assoc. Prof. Nguyen Huu Vien

Opponent 3: Assoc. Prof. Dr. Pham Cong Tru



This thesis will be defended before the University Thesis Evaluation Board at
Hanoi Law University on , dated / /2014






This thesis can be studied more at:
1) National Library of Vietnam;
2) Library of Hanoi Law University;

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INTRODUCTION
1. Rationale of the study
Labor management is an objective indispensable demand of
production in a society with class polarization because in order to achieve
the target of a production process, there must be a subject to manage general
activities of people and orient such activities towards certain objectives to
achieve the set goals. The more a society develops, the higher labor
assignment and organization level are, and the more important labor
management is.
For labor relations in a market economy, on macroeconomic scale,
labor management is regarded as the power of the state - the largest owner in
society. On microeconomic scale, in units using employees, the state
“shares” this power with employers in scope stipulated by law. Accordingly,
employers are entitled to perform direct activities in organization and control
of employees to make general rules and orders in such units, thus, contribute
to improvement in labor productivity, quality and effectiveness.
In Vietnam, labor management right of employers has been stipulated
in labor legislation after the power was seized to the people in August, 1945.
After several amendments and supplementations, law on labor management

right of employer has been more and more complete and specified clearly of
the Labor Code passed by The XIIIth National Assembly, the third session
on June 18th, 2012 and taking effect from May 1st, 2013.
Based on inheritance and development of the Labor Code in 1994
(amendments and supplementations in 2002, 2006 and 2007), Labor Code in
2012 keeps on institutionalizing renewal line of the Communist Party of
Vietnam and concretizes the provisions of the 1992 Constitution of the
Socialist Republic of Vietnam on labor and on the use and management of
labor. Accordingly, labor management right of employer has been expanded
ensuring more self-mastery and self-responsibility right of employer in
business operation of market economy.
However, in recent years, business activities of the units using
employees in Vietnam have faced a lot of difficulties. Such difficulties are
involved in low labor productivity and effectiveness, weak development, poor
competitiveness in domestic and international market. This results from many
causes. However, it cannot be denied that in comparison with other laws, some
provisions of law on labor management right of employer are not really
appropriate and feasible. The State still performs too much interference in
labor relation which partly restrains self-mastery and self-responsibility right of
the employers in labor relations of the market economy.
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Besides, although the employer is a party in labor relations which
plays an important role in creating material wealth for society as well as
creating more jobs for employee, in comparison with employees, employers’
rights related to labor management have not been guaranteed on the basis of
fairness and mutual benefits by labor legislation.
Whereas, some provisions on employers' right to labor management
are considered to be quite open and ensure self-determination of employers

in recruitment, use and termination of labor use, some employers tend to
abuse their power. Discrimination of areas, training modes of employees
violates rights, benefits of employees and receives strong objection from
society. Cases that employers terminate labor contracts, fire employees,
decrease employees’ salary without just causes occur frequently and affect
income and jobs of employees and general social order.
From the above reasons, I decide to choose the issue of “Law on
employers' right to labor management in Vietnam” as the topic of my
doctoral thesis.
2. Aims and objectives of the study
Objectives of this thesis are to perform a comprehensive, in-depth and
systematic study on some theoretical issues on employers' right to labor
management. Based on studied theoretical basis, the thesis focuses on
analyzing actual state of current law on employers' right to labor
management. By evaluation of inadequate points in current laws, the thesis
proposes amendments and supplementations of some provisions on
employers' right to labor management in Vietnam appropriate to labor
market development in the context of regional and international integration.
From the above objectives, the thesis focuses on main duties as follows:
Firstly, overview of studies related to the thesis topic.
Secondly, studying and clarifying some theoretical issues on
employers' right to labor management and law on employers' right to labor
management.
Thirdly, analyzing and evaluating actual state of legal provisions and
actual application of legal provisions on employers' right to labor
management in Vietnam, then providing comments on pros and cons,
shortcomings in legal provisions on current labor legislation.
Fourthly, interpreting the need and objective requirements on
completion of the law on employer’s labor management right in the context
of market economy and international integration nowadays.

Fifthly, proposing amendments and supplementations of current legal
provisions on employers' right to labor management to ensure more
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completion and appropriateness of law with actual state of labor
management in units using employees in Vietnam.
3. Objects and scope of the study
The thesis studies employers' right to labor management performed in
units using employees under provisions of Labor Code in 2012 and
documents on implementation guidance. Accordingly, contents of law on
employers' right to labor management in units using employees include:
- Right to establish labor management tools;
- Right to organize and perform labor management.
In order to study issues more deeply, depending on each set content
and requirement, the thesis performs reference and comparison with
provisions of international conventions and recommendations of
International Labor Organization (ILO) and labor legislations of other
countries related to the above contents.
4. Methods of the study
The thesis is studied based on Marxism and Leninism methodology,
including dialectical and historical materialism methodology. Accordingly,
legal issues on employers' right to labor management are studied in motion
and development state in an integral relation with political and socio-
economic elements. The thesis is also based on viewpoints and direction of
the Communist Party and the State on labor relations in Vietnamese market
economy.
Specific methods used include retrospective method of documents,
analysis, proof, comparison, summary and scientific forecast.
5. New scientific contributions of the thesis

- The thesis studies more deeply and clearly definitions, nature,
determination basis and role of law on employers' right to labor
management, enriching academic aspects of labor legislation science.
- The thesis covers legal contents on employers' right to labor
management and systematically analyses such contents based on provisions
of ILO and laws of other countries.
- The thesis comprehensively analyses and evaluates existing law as
well as actual situation of application of provisions on employers' right to
labor management in Vietnam, especially labor management right in labor
leasing activities; points out pros and cons of current law, then shows issues
that need amending and supplementing.
- The thesis interprets requirements on completion of the employers’
labor management right law in Vietnam.
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- The thesis makes 22 proposes amendments and supplementations of
provisions of Labor Code in 2012 on labor management right of employer to
complete provisions of Labor Code as well as improve performance
effectiveness of employers' right to labor management in units using
employees in Vietnam nowadays.
6. Theoretical and practical significance of the thesis
Study result of the thesis contributes to enrich fundamental theoretical
system on employers' right to labor management and law on employers' right
to labor management in labor legislation science.
The thesis is essential to employers in improving their legal
knowledge to apply labor management right in their units using employees
properly, flexibly and effectively.
The thesis is a helpful reference document for agencies and
organizations during performance, amendment and supplementation of labor

legislation; for scientific research establishments, teaching and learning
institutions on labor legislation; for laborers and other objects desiring to
study labor legislation on general and law on employers' right to labor
management in particular.
7. Conclusion of the thesis
Besides introduction, conclusion, published works related to thesis
topic, list of reference documents, appendices, the thesis contains four
chapters and nine sections.

Chapter 1
OVERVIEW OF TOPIC STUDY SITUATION

1.1. Domestic and foreign topic study situation
1.1.1. Domestic study situation
Issues on labor management, employers' right to labor management in
general and law on employers' right to labor management in particular have
been mentioned in textbooks, reference books, grassroots level scientific
topics, thesis, dissertations, articles on journal and reports of scientific
conference. In details:
Textbooks: Issues related to law on employers' right to labor
management have been introduced in two textbook groups: Human
resources management and labor legislation, in which, such issues have been
mainly mentioned in Vietnam labor legislation textbooks of the education
establishments that train laws.
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Reference books: “Studying provisions of Labor Code of Socialist
Republic of Vietnam” of Legal Science Research Institute - Ministry of
Justice, Ho Chi Minh city Publishing House, 1995; “Studying Labor Code of

Vietnam” by Pham Cong Bay, National Political Publishing House, Hanoi,
2002; “Labor contract law in Vietnam - actual state and development” by
Dr. Nguyen Huu Chi, Labor and Society Publishing House, 2003; “Research
documents on labor leasing” of Department of Labor Affairs, Ministry of
Labor, Invalids and Social Affairs, Labor and Society Publishing House,
2011.
Besides, there are books about: Questions and answers about the Labor
Code, Legal handbook, Law studying, Dictionary of legal terms, etc which
mention terms or provisions of labor legislation related to the thesis.
Scientific topics: Scientific topics related to the thesis are mainly
grassroots level scientific research projects. They are: “Actual state of suing
settlement on unilateral termination of labor contract, disciplinary measure
with regards to labor dismissals in recent years and recommendations” in
2001 of Supreme People’s Court of Vietnam which is managed by Master.
Nguyen Viet Cuong; “Research for amendments and supplementations of
Labor Code in current stage” in 2010 of Hanoi Law University which is
managed by Dr. Tran Thi Thuy Lam; “Application of labor legislation in
human resources management in enterprises” in 2011 of Hanoi Law
University by Dr. Do Ngan Binh…
Thesis and dissertation: Among published theses and dissertations, the
following works are related to the thesis topic: Thesis of “Labor contracts in
the market economy of Vietnam” in 2002 by Nguyen Huu Chi; Thesis of
“Law on labor disciplines in Vietnam- the actual situation and suggestive
direction of completion” in 2007 by Tran Thi Thuy Lam; Thesis of
“Collective agreements - A comparative study of Vietnamese and Swedish
labor law systems” in 2011 by Hoang Thi Minh; Thesis of “Law on
unilateral termination of labor contract - Theoretical and practical issues” in
2013 by Nguyen Thi Hoa Tam. Besides, there are other published theses
related to the thesis topic.
Articles on journals: Articles on journals are mainly researches

discussing labor disciplines, labor contracts, and collective agreements under
provisions of previous Labor Code. The similarities of such articles are that
the authors mainly analyze and evaluate provisions of Labor Code in 1994
(the amended and supplemented Labor Code) and propose completion of
provisions the Labor Code based on shortcomings.
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Scientific reports: Scientific reports include result reports, research
reports, impact evaluation reports or summary reports on issues of labor
relation and labor legislation of Ministry of Labor, Invalids and Social
Affairs, ILO and VCCI which mention some issues related to the thesis.
Scientific conferences: Scientific conferences on labor relations,
amendment and supplementation of Labor Code containing some issues
related to the thesis are held by agencies, departments and training
establishments specializing law.
It can be seen that in different levels, domestic research works have
mentioned some aspects in contents of some institutions related to
employers' right to labor management. However, there is no works studying
deeply and independently employer’s labor management right in Vietnamese
labor legislation.
1.1.2. Foreign study situation
Law on employers' right to labor management is studied in various
aspects in some documents on foreign labor legislation including books and
articles on journals.
Reference books: There are a lot of reference books on labor legislation
in foreign countries which do not show employers' right to labor management
as an independent content but show the right alternately in studying other
contents of labor legislation such as labor hiring, labor contract, rights and
obligations of employees and employers, labor dismissals. They are

“Employment law for business” (2005), Dawn D. Bennett-Alexander, Laura B.
Pincus, McGraw-Hill Companies; “Employment law” (2006), Andrew C. Bell,
Sweet & Maxwell; Employment & Labor legislation” (2008), Patrick J. Cihon,
James Ottavio, Castagnera, Cengage Learning; “Q & A Employment Law”
(2008), Richard Benny, Malcolm Sargeant & Michael Jefferson, Oxford
University Press; “Labor & Employment Law: Text and Cases” (2009), David
P. Twomey, Cengage Learning (USA); “Employment Law” (2010), Hugh
Collins, Oxford University Press…
Besides, there are some books studying employers' right to labor
management more specifically. They are “Management Prerogatives and
Employee Participation” (2004), Atty. Juris Bernadette M. Tomboc-
Commercial Law, Department of De La Salle University - Manila,
Philippines; “Labour Laws of the Philippines” (2006), Joselito Guianan
Chan, “Labour and Employment
Law in Sweden” (2009), Reinhold Fahlbeck, Bernard Johann Mulder, Lund:
Juristförl; “The Employer's Legal Handbook: Manage Your Employees &
Workplace Effectively” (2011), Fred Steingold, Nolo…
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Articles on journals: Such articles include: “The Managerial
Prerogative and the Employee’s Obligation to Work: Comparative
Perspectives on Functional Flexibility” (2006), Mia Rönnmar, Industrial
Law Journal, Vol.35, No.1; “Workplace collective bargaining and
managerial prerogatives” (2007), John Storey, Industrial Relations Journal,
4-7; “The managerial prerogative and the right and duty to collective
bargaining in Greece” (2009), Kostas D. Papadimitriou (Associate Professor
in University of Athens, Greece), Comp. Labor legislation & Pol’y Journal,
Vol 30:273; “The Concept of Mangerial prerogative in South African
Labour Law” (2009), John Kinamugire…

In such books and articles, in major aspects, the authors have
mentioned some theoretical aspects or/and contents of employers' right to
labor management on labor legislation side. However, new research works
mainly generalize and introduce theoretical and practical issues without
analyzing and interpreting them as requirements of the thesis.
1.2. Studies issues related to the thesis topic and some comments,
evaluation
Based on generalizing issues studied by research works the thesis
gives some comments and evaluations as follows:
Firstly, definition of employers' right to labor management. There are
some research works giving understanding of the rights to labor
management in general and the employers' right to labor management in
particular. However, such documents have not defined labor management
rights of employers as well as law on labor management rights of employers,
employers and units using employees. Simultaneously, such works have not
deeply explained differences the right to labor management of employers in
general and the right to labor management of the state.
Secondly, bases stipulating labor management rights of employers.
Domestic and foreign research works discuss establishments stipulating
labor management rights of employers. Accordingly, labor management
rights of employers come from two bases: right on economic properties and
effectiveness that employers wish to achieve. However, such works have not
deeply and systematically analyzed theoretical and practical basis of
determination of employers' right to labor management.
Thirdly, legal contents on labor management rights of employers. In
studied contents, the works mentioned two aspects of employers' right to
labor management: Firstly, employers are entitled to issue work rules,
collective labor agreements, labor contract, etc to be basis for labor
management; Secondly, employers' right to labor management is shown in
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specific rights such as labor recruitment, work assignment, labor transfer,
commendations, disciplinary measures, labor contract termination, etc.
However, there is no works mentioning specifically and systematically
contents of the employers' right to labor management. Moreover, some
contents on employers' right to labor management in labor leasing activities,
grievant settlement have not been mentioned properly by the works.
Fourthly, actual state of law on employers' right to labor management
in Vietnam. By studying some fundamental institutions of labor legislation
such as labor contract, collective labor agreements, work rules, etc, the
works mainly analyze and evaluate such institutions in general research
aspect without deeply studying and considering employers' right to labor
management. Proposals suggested by such works for amendments and
supplementations are mainly legal provisions in previous statutes, which
have partly become outdated. There is no works specifically and
systematically analyzing actual state of law on employers' right to labor
management based on provisions of the Labor Code 2012.
Fifthly, completion of law on employers' right to labor management in
Vietnam. This content is mentioned specifically in domestic research works.
Such research works have proposed main opinions on completion of
provisions in the Labor Code issued in 1994 which is amended and
supplemented. Besides, some works propose completion of law on unilateral
labor contract termination right of employers of the Labor Code in 2012.
Appropriate opinions and viewpoints of such research works will be referred
by the thesis during additional study and completion on side of employers'
right to labor management.
1.3. Fundamental issues to be settled in the thesis
1.3.1. Some theoretical issues
- Theoretical issues on employers' right to labor management.

- Theoretical issues on law on employers' right to labor management.
1.3.2. Actual state of current labor legislation on employers' right to
labor management in Vietnam
- Actual state of law on the right to establish labor management tools.
- Actual state of law on the right to organize and perform labor
management.
1.3.3. Completion of law on right to establish employers' right to
labor management in Vietnam
- Completion direction of law on employers' right to labor
management must ensure theoretical and practical requirements.
-To propose amendments and supplementations of some provisions on
employers' right to labor management. In detail, to propose amendment and
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supplementation of provisions on right to establish labor management tools
and right to organize and perform labor management of employer of the
Labor Code in 2012.

Chapter 2
SOME THEORETICAL ISSUES ON LABOR MANAGEMENT
RIGHT AND LAW ON EMPLOYERS' RIGHT TO LABOR
MANAGEMENT

2.1. Employers' right to labor management
2.1.1. Definition of labor management and law on employers' right
to labor management
2.1.1.1. Labor management
Based on management definition, labor management can be
understood as impact of competent subjects on objects when participating in

labor relations to boost labor productivity, quality and effectiveness. From
this perspective, competent subjects for labor management include the state
and the employers. The labor management of employers can be understood
as organizational and intended impact of employers on employees in units
using employees to gain the highest effectiveness during business operation.
2.1.1.2. Employers' right to labor management
“Employers” can be understood as units using employees (agencies,
organizations, companies and cooperatives, or persons using employees
(households and individuals). In the units using employees, the employers
have “supreme” right in making decisions on business operation and process
of labor management. To get this right, the employers must be qualified
under legal provisions.
Concepts of employers' right to labor management by foreign
countries are mainly shown in two theories: 1) Institutional theory; 2)
Contractual theory. Although two theories give different viewpoints of
employers' right to labor management, the similarity is that labor
management right is recognized as privilege of employers to the employees
in the workplace.
In Vietnam, there has been no definition of employers' right to labor
management. From legal provisions, it can be seen that employers' right to
labor management is considered on flexible basis of the above theories. The
most general definition of employers' right to labor management can be
given as follows: Employers' right to labor management is the right of an
employer in directing, managing the employees in the unit based on
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establishing labor management tool as well as organizing the
implementation of labor management under legal requirements in order to
boost labor productivity, quality and effectiveness.

2.1.2. Nature of employers' right to labor management
Employers' right to labor management has social, economic and legal
nature. This natures are proved in fundamental characteristics: 1) Employers'
right to labor management reflects unilateral will of employers; 2)
Employers' right to labor management is always affected by subject’s will in
labor relation; 3) Employers' right to labor management is governed by the
legal limits; 4) Employers' right to labor management is administrative.
2.1.3. Basis for determination of employers' right to labor
management
Employers' right to labor management is determined on the basis of:
1) Objective requirements of labor management activities; 2) Right for
properties of employers; 3) Benefits of parties in labor relation.
2.2. Law on employers' right to labor management
2.2.1. Definition of law on employers' right to labor management
From studies on employers' right to labor management and
international legal provisions on this right, law on employers' right to labor
management can be understood as all state provisions on right of employers
in directing, managing employees of the unit based on labor management
tool establishment as well as labor management organization and
performance for improvement in labor productivity, quality and
effectiveness.
2.2.2. Contents of law on employers' right to labor management
2.2.2.1. Right to establish labor management tool
* Issuing work rules, internal regulations and decisions
- Work rules
Issuing work rules is the activity showing employers' right to labor
management in the clearest manner. By the work rules, the employers define
general and long term conduct requirements for all employees. In law of
some countries such as France, Japan, Cambodia, Korea, Vietnam, etc, work
rules are compulsorily established in units using numerous employees

whereas in other countries such as India, England, Canada, USA, etc work
rule are not mandatory. Regardless of the issuance is compulsory or not,
work rules have two main content groups including provisions forcing
employees to perform their duties at work and disciplinary measures for
employees violating the provisions. However, to avoid misuse and violation
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of employers on employees’ right and benefits, law of the countries also
stipulate procedures for labor regulation issue.
- Internal regulations
Internal regulations are documents issued by employers which include
provisions and modes applied to employees in their labor employment unit.
Labor legislations of some countries such as Japan, Russia, Cambodia, and
Vietnam stipulate that employers are entitled to issue regulations to direct
labor process. However, to ensure democracy of parties in labor relations,
laws of many countries, similar to those applied for work rules, also stipulate
that before issuing of internal regulations, the employers shall consult
opinions of organizations representing employees.
- Decisions
Decisions are documents showing employers’ will in cases of
definitely issuing measures to settle problems arising when they use
employees. Laws of many countries allow employers to make decisions for
labor process management, however, besides stipulated procedures, such
laws also limit this employers’ right by stipulating mechanisms to protect
employees’ benefits.
* Signing collective labor agreements, labor contract and other
agreements
- Collective labor argreements
Through collective labor agreements, employers' right to labor

management is shown in two aspects. Firsly, the rights of the employers to
perform certain acts to their employees, and secondly duties and obligations
of the employees. Laws of some countries consider collective labor
agreements as an important basis to bind employees to perform their
obligations under employers’ direction. Because collective labor agreements
aim at effectiveness of business operation, employers used collective labor
agreements as a tool for enhancing labor effectiveness.
- Labor contract
Beside labor management, a contract signed between employers and
the employees is of paramountly importance because it allows the employers
to freely negotiate with their employees on rights and obligations that during
performance of such rights and benefits, employers always hold
management and administration rights for employees to gain labor
objectives as set out. Laws of most countries indicate that the most
important characteristic to distinguish a labor contract from a civil one is the
factor of labor management on the employers side. However, to maintain,
stabilize labor relations and protect benefits of two parties, especially
12


employees’ benefits, labor legislations of most countries in the world limit
employers' right to labor management by listing employers’ obligations.
- Other agreements
Besides labor contract, in labor relation, parties also have other
agreements such as labor leasing contract, vocational contract, and probation
contract. Signing such contracts is to create legal basis for employers to
perform labor management during labor leasing, vocational training or
probation period.
2.2.2.2. Right to organize and perform labor management
* Right to recruit employees

Derived from importance and benefits of values brought by labor
recruitment, ILO as well as some countries such as France, Poland,
Indonesia, China, etc recognizes and respects this right of employers.
However, laws of many countries only indirectly stipulates responsibilities
of related subjects (such as employment services or organizations) as well as
stipulates acts that employers are not allowed to perform when recruiting,
instead of specifically stipulating labor recruitment contents. Such
undetailed stipulation in laws is the way that lawmakers grant this right to
employers to make decisions on recruitment for existence and development
of their unit.
* Right to labor use
- Right to assign and arrange works for employees
Laws of some countries in the world such as Japan, China, Vietnam,
Korea, South Africa, etc take this employers’ right as granted. However, for
some special types of employees, because of their typical characteristics,
employers are not allowed to assign certain works to them.
- Right to transfer, change and suspend works of employees
For the right to transfer employees to perform other works: Laws of
some countries such as Sweden, Greece, England, Philippines, etc allow
employers to assign employees to perform other works. Plausible reason for
this abnormal asignment mainly comes from the demand of the employment
circumstance, or the employee's capacity. However, to protect the
employees’ rights, the laws also limit this right of employers by specifically
stipulating assignment duration and procedures, employees’ rights,
especially by forcing employers to arrange original works for employees
when assignment duration expires.
For right to change employees’ works: Laws of countries such as
Sweden, Japan, Vietnam, etc indicate unlimited right of employers in
changing employees’ works. However, because change in works can affect
13



profession, trained qualification, working place and environment, income
and other rights of employees, laws of countries stipulate that employers are
only entitled to change employees’ works with acceptance of employees.
For right to suspend employees’ works: Employees’ work suspension
deriving from employers’ will can result from risks in business operation or
from employees or competent agencies. Suspension time depends on
agreement between two parties or legal provisions. After suspension time,
employers shall fully ensure works and other rights for employees under
terms and conditions in the labor contract.
- Right to issue commendations to employees
Right to issue commendations to employees is the right that employers
evaluate performance of works, obligations of employees well with material
benefits. International law hardly interferes this employers’ right and employers
can make decision on commendation by themselves. To ensure fair, appropriate
and democratic commendation mode, before issuing commendation rules,
employers shall consult organizations representing employees.
- Right to handle violations of labor discipline
Right to handle violations with regard to labor discipline is the right of
employers to consider and handle violations of labor discipline by imposing
disciplinary measures on employees. Laws of many countries stipulate that
employees who violate labor discipline can be subjected to disciplinary
measures or work suspension in case employers have no sufficient basis to
perform disciplinary measures.
Handling violations for employees is considered as an activity
showing employers’ power in the clearest manner. It is the right to use
disciplinary sanction with a high enforcement effect to ensure a proper
respect and compliance of established rules, regulations and agreements as
well as protection of general labor order and legal properties of employers.

This activity punishes employees in material and spiritual aspect and
educates as well as prevents other employees in the unit from committing
the same violation. However, to ensure rights of employees and avoid
misuse of employers, laws of many countries stipulate that employers shall
observe certain rules, regulations and procedures.
* Right to terminate labor use
Right to terminate labor use is the right that employers proactively
terminate employees' performance of labor right and obligation in the unit
and this right does not depend on labor contract term. Under the regulation
of the ILO and of many countries, when terminating labor use, employers
shall have plausible reason. Plausible reasons include reasons from
employees, employers or objective reasons.
14


Right to terminate labor use due to reasons from employees: Labor
legislations of the USA, Sweden, Vietnam, Japan, etc have different
provisions on reasons from subjective fault of employees, however, the
similarity is that employers shall perform some certain procedures.
Right to terminate labor use due to reasons from employers: the ILO
stipulates that employers are entitled to terminate labor use due to reasons
related to economy, technology, restructure of the unit or the like.
Accordingly, law of each country concretizes this reason to be appropriate to
conditions of such country.
Right to terminate labor use due to objective reasons: Objective reasons
include natural disasters, fire or other force majeure reasons. Laws of countries
do not stipulate specifically this right. Vietnamese law specifically stipulates
this right in point c, clause 1, Article 38 of Labor Code.
* Right to settle complaints of employees and labor collective
Law allows employees and labor collective to complain about

decisions and acts related to employer’s labor management right and
simultaneously allows employers - subject directly issuing such decisions
and acts, to consider and settle complaints of employees and labor
collective. The objective is to make chances for employers to consider their
labor management activities, then have measures to handle and remedy or
improve effectiveness of labor management in the unit. Because of the
importance of this right to settle complaints of employers, international law
acknowledges it and has detailed provisions on it.
2.2.3. Role of law on employers' right to labor management
Law on employers' right to labor management has roles: 1) Concretizing
requirements on state management in labor field; 2) Making legal basis for the
employers' performance of the labor management right; 3) Ensuring freedom
and self-mastery right in business operation and promoting business production;
4) Making legal basis to ensure job and income for employees, contribute to
stability, harmony and development of labor relation.

Chapter 3
ACTUAL STATE OF CURRENT LAW ON EMPLOYERS' RIGHT
TO LABOR MANAGEMENT IN VIETNAM

3.1. Actual state of law on right to establish labor management
tool of employers
3.1.1. Issuing labor regulations, rules and decisions
3.1.1.1. Work rules
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Current regulation of the labor law are fairly appropriate and ensure
self-determination of employers in self-determining contents of labor
regulations appropriate to actual conditions of the unit. According to reports,

about 70% of units using more than 10 employees issue work rules.
However, in reality, besides work rules, most units using employees also
issue Code of Conduct. This is an important labor management tool in the
workplace. Thus, not stipulating Code of Conduct in legal documents is not
appropriate to actual labor use in Vietnam nowadays.
3.1.1.2. Internal regulations
Current labor legislation grants right to employers in freely issuing
labor regulations to direct labor process in the unit. This provision expands
self-determination right of employers on modes, rights and obligations of
employees in the unit and shows appropriateness to laws of other countries.
To avoid misuse of employers, like work rules, law also stipulates that when
issuing internal regulations, employers must consult organizations
representing labor in the unit.
3.1.1.3. Decisions
Decisions are issued by employers in cases of: labor contract
termination, salary increase, disciplinary measure imposed, and work
suspension. The employers are proactively responsible for issues such as
when to issue decisions, what issues settled by such decision and their
contents, etc. For labor discipline, law specifically stipulates terms that
employers shall make decisions on imposing disciplinary measures.
3.1.2. Signing collective labor agreements, labor contract and other
agreements
3.1.2.1. Signing collective labor accord
The current law stipulates that employers and labor collective
representative conduct collective negotiation in the unit and in case of
successful negotiation, the two parties shall sign a collective labor
agreement. To ensure benefit of parties, employers shall observe legal
provisions on contents, subject, term and procedures in negotiation, signing;
on procedures in publishing the agreement, amending and supplementing
other documents of the unit as well as issuing collective agreements

specifically and appropriately, ensure right to freely negotiate of employers
on issues related to stability and development of the unit. According to
reports, some 25-30% of enterprises have developed collective labor
agreements, in which, 100% of state-owned enterprises has collective
agreements.
3.1.2.2. Signing labor contract
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According to Articles 15 to 25 of the Labor Code, when concluding
labor contract, employers shall observe obligations on supplying information
before negotiating, obligations when signing, banned acts, obligations under
provisions on bargaining principles, form, terms and contents of the
collective agreement. Regarding labor leasing activities, labor contract
signed between labor leasing enterprises and leasing employees shall
observe provisions in clause 5, Article 56 of Labor Code.
In general, labor contract conclusion is stipulated specifically by law to
provide a legal basis for employers to strictly perform labor management.
According to the existing reports, most employers in enterprises are aware of
the importance of labor contract in labor management and concerned about
labor contract conclusion. In reality, labor contracts signed in enterprises
account for more than 90% of the related labor force.
From labor management perspective, there remain shortcomings in
legal provisions on labor contract concusion. They are, for examples, the
definition of labor contract signing does not focus on labor management -
the most important element of labor contract; provisions on written contract
signed between employers and legal representative of employees from 13 to
15 years old is not appropriate; provisions on contents of labor contract
signed by employers in labor leasing enterprises and leasing employees
under provisions in labor contract like normal employees is not appropriate.

3.1.2.3. Signing other contract types
Basically, provisions on vocational training contract, probation
contract remedied shortcomings of previous provisions and are appropriate
in ensuring employers' right to labor management. However, for probation
contract, because probation duration is short and the parties have no closed
constraint on rights and obligations as a labor contract, stipulating contents
of probation contract is unnecessary.
For labor leasing contract, to provide a legal basis for contracting
parties to negotiate rights and obligations based on fairness and mutual
benefits, law should stipulate labor leasing/subleasing fee as well as consider
labor leasing/subleasing term.
3.2. Actual state of law on right to organize and perform labor
management of employers
3.2.1. Right to recruit employees
According to the law, employers' right to labour recruitment is shown
in two contents: right to recruit employees based on demand and right to
recruit employees directly or through other agencies. Besides provisions on
labor recruitment in general, employers should note exclusions when
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recruiting specific objects. Current right to recruit of employers is larger
than previous ones and show fairness in units using employees. Besides,
recruitment procedures and process is stipulated more simply. However,
because labor supply is much higher than labor demand in Vietnam, the
employers tend to misuse when recruiting. Besides, labor legislation
prioritizing and encouraging recruitment of the disabilities is not appropriate
due to current labor redundancy.
3.2.2. Right in labor use
3.2.2.1. Right to assign and arrange works to employees

In general, provisions on this right of employers are adequate and
appropriate to labor use in the context of the market economy in Vietnam
and prove appropriateness of Vietnamese labor legislation to ILO’s
conventions and laws of other countries.
However, the provision relating to the case of merger, consolidation or
division of the enterprises, co-operatives, according to which the succeeding
employer shall be responsible for keeping on using current labors and
amending, supplementing labor contract stipulated in clause 1, Article 45 of
Labor Code, is not appropriate. Provision on work item that employers are
not allowed to use female employees (77 works) partly limits their works
and income. Provision on maternity leave of six months regardless of labor
condition and capacity is not appropriate to labor use demand of the unit,
conditions of employees and other laws.
3.2.2.2. Right to transfer, change and suspend works of employees
According to the law, during the life time of a labor relation,
employers are entitled to assign workers to a different position for a limited
period (Article 31 of the Labor Code), change works (Article 35 of the
Labor Code) and suspend work performance of employers (Article 32 of the
Labor Code). Basically, such provisions are appropriate and reflect
activeness of employers in using labor human resources without recruiting
or hiring to meet on-site labor demand and limit the cost. However, law
should consider and improve the provision on temporarily assigning
employees to perform other works to works agreed in labor contract because
in reality, employers not only transfer works but also transfer employees to
other working places or to perform other works to meet work demands.
3.2.2.3. Right to issue commendations to employees
According to current regulations, employers are entitled to issue
commendations to employees when employees fulfill assigned works or
complete works with output quota higher than set quota. To encourage
employees in labor productivity, quality and effectiveness improvement,

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employers make decisions on commendations and bonuses. This regulation
ensures employers' self-determination right in distributing income as well as
employers' right to labor management.
3.2.2.4. Right to handle violations of labor discipline
* Right to handle violations of labor discipline
The current law grants employers a right in making decisions
correcting violations of labor discipline. When doing this, employers shall
observe legal requirements on disciplinary form, principle, basis, order and
procedure. For employees whom are leased from other enterprises, lessors
are not entitled to perform disciplinary measures to employees.
* Right to handle material damage
Right to handle material damage of employers is performed in two
cases. Accordingly, law stipulates compensation basis, level and method for
the employers to further concretize in the company work rules. Besides,
when handling a case in relation to compensation for material damage,
employers shall observe the related principle, order, and procedure.
* Right to suspend employees’ works
Right to suspend employees’ works is unilaterally decided by
employers. Once performing this right, employers are required to observe
procedure, terms and employees' rights under Article 129 of the Labor Code.
It can be seen that there are reasonable points in the law on correcting
violations of labor discipline. However, the regulation set up in work rules
as the basis for labor discipline in the workplace as provided for in Article
118 of the Labor Code seems to be too narrow compared to laws of many
countries. The stipulated period in which employees are absent without
authorization or plausible reason in order for them to face a corrective
measure as a dismissal is too long, which badly affects progress of the

production. The provisions on material liability: the term “material liability”;
the compensation level that is defined based on property state (which suffer
damage or loss), the compensation level fixed (a part or the whole damage)
in case employees cause loss of tools, equipment and properties of
employers, are not appropriate.
3.2.3. Right to terminate labor use
3.2.3.1. Right to terminate employment relations due to reasons from
employees
According to clause 1, Article 38 of the Labor Code, employers are
entitled to unilaterally terminate labor contract in three cases. Upon the
termination, the employers shall notify employees a certain period in
advance to assist employees in seeking new jobs.
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3.2.3.2. Right to terminate employment relations due to reasons from
employers
According to Article 44, 45 of the Labor Code, employers are entitled
to lay-off employees due to reasons from business operation of the unit such
as change in structure, technology; economic reasons; merger, consolidation
or division of the enterprises; transfer of ownership, or the right to use the
property of the enterprise. Before resorting to the laying-off, the employers
have to follow different procedures set for specific cases.
3.2.3.3. Right to terminate employment relations due to objective reasons
When unilaterally terminating labor use due to objective reasons,
employers shall notify employees a certain period in advance depending on
term of labor contract agreed by parties.
Besides procedures required to be followed depending on cases,
employers are also required not to unilaterally terminate labor use in some
cases stipulated in Article 39, clause 4 in Article 219 of the Labor Code

(excluding cases of laying-off due to reasons from employees). It should be
noted that in case employers fail to observe legal requirements in respect of
bases and procedures for terminating labor use, decisions on such
termination shall be deemed as illegal and such employer shall be subjected
to legal consequences under provisions in Article 42 of the Labor Code.
Generally, law stipulates specific bases and procedures for terminating
labor relations. Comparing to prior-mentioned provisions, this right is
stipulated by law in an opener manner. However, the right to lay employee
off due to reasons from employers in four cases stipulated in Article 44 and
45 of Labor Code, which are conducted in different procedures is not
appropriate. Cases where an employee regularly fails to fulfill works under a
signed labor contract or due to economic reasons is not sufficiently clarified
by law and this creates a lot of difficulties for employers to determine
reasons for laying employees off. The provisions under which unilateral
termination of indefinite labor contract by employers requires just causes,
and the differentiation of compensation level between the two parties for the
same act of illegal termination of a labor contract is not appropriate.
3.2.4. Right to handle complaints
According to the law, employers are first entitled to settle the complaint
of employees or labor collective. During the process of complaintsettlement,
the employers shall strictly observe on the related principles and procedures.
However, the strictness does not ensure employers' right to labor management
because provision on labor grievant procedures by employers is similar to
those by labor inspectors, in addition theand the regulation under which
employers are only entitled to settle complaints, not denunciations by
employees/labor collectives with regard to other employees or labor
collectives, which arise during the progress of the labor relations does not suit
the actual conditions of labor management in the unit.
20



Chapter 4
COMPLETION OF LAW ON EMPLOYERS' RIGHT TO LABOR
MANAGEMENT IN VIETNAM

4.1. Direction for completion of law on employers' right to labor
management in Vietnam
Completion of law on employers' right to labor management is an
urgent demand in current context of Vietnam economy. The completion
should meet the following requirements: 1) To remedy inadequate issues of
current law, expand self-mastery right in employers' right to labor
management and limit direct state interference in employers' right to labor
management; 2) To ensure the harmony in benefits between employers and
employees; 3) To suit the mechanism of the economic administration in a
socialist-oriented market economy in the context of international integration
in Vietnam.
4.2. Proposals on amendments and supplementations of provisions
on employers' right to labor management
4.2.1. To amend and supplement provisions on the right to establish
labor management tools of employers
Firstly, it is necessary to supplement conduct issue as a subject matter
to work rules. Accordingly, employers are also allow to separate this content
into a Code of Conducts. Once building up a Code of Conducts, the
employers shall observe stipulated requirements, similar to those when
establishing work rule.
Secondly, it is necessary to amend labor contract definition to
emphasize labor management factor as well as expand contents for
agreement (eliminating provision on “working condition”. The definition
can be that "Labor contract is the agreement on rights and obligations in
labor relation between employers and employees, in which, employees work

for earning salary and are subjected to labor management of employers".
The amendment of the said definition will lead to amendment of
“employees” definition in clause 1, Article 3 of Labor Code. Accordingly,
this definition should eliminate the phrase “is paid a salary and subjected to
employers' management and direction”. In detail, “employees” is defined as
follow: Employees are individuals who are not less than 15 years old with
labor capabilities and work under labor contract.
Thirdly, it is necessary to stipulate employers' obligation to sign labor
contract in writing with employees between 13 and 15 years old when there
is a written commitment of legal representative of employees.
Fourthly, it is necessary to supplement some provisions on labor
contract between labor leasing enterprises and leasing employees.
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Accordingly, labor contract in labor leasing activities shall be deemed as
particular case stipulated in clause 5, Article 23 of Labor Code.
Fifthly, it is necessary to supplement regulations on services fee, fee,
payment method and liabilities if this term in labor leasing contract is
violated. Simultaneously, labor leasing/subleasing fee should be between
15% and 20% of employees’ salary.
Sixthly, it is necessary to amend provision on labor leasing/subleasing
term. Accordingly, labor leasing/subleasing term is completely agreed by
parties but does not exceed Labor leasing license term of 36 months
(excluding term extension).
4.2.2. To amend and supplement provisions on right to organize and
perform employers' right to labor management
Firstly, it is necessary to supplement the act of discrimination on basis
of regions, areas, training forms when using and recruiting employees as
prohibited acts stipulated in clause 1, Article 8 of Labor Code.

Secondly, it is necessary to stipulate that employers shall be
responsible for recruiting the disabilities with certain rate (instead of
encouraging recruitment of the disabilities as stipulated in current law).
Accordingly, units in heavy industry sector shall recruit the disabilities with
a rate of 2% whereas the rate of units in other sectors is at least 3%. Units
not recruiting the disabilities shall contribute a certain amount of money
based on salary fund of such units to employment fund for the disabilities.
Thirdly, it is necessary to flexibly stipulate employers' responsibility
for employment in case of merger, consolidation or division of the
enterprises, co-operatives under provision in clause 1, Article 45 of Labor
Code. It should be that after resorting to all possible prevention measures to
limit lay-off, if the employers are still unable to arrange works for
employees, such employeer are entitled to lay employees off and do not
have to “keep on using current employees”.
Fourthly, it is necessary to eliminate work item that employers are not
allowed to use female employees and only stipulate works that female
employees are not allowed to perform in case such female employees intend
to be pregnant, during maternity period or maternity leave or they have to
care for their children that are below 12 months of age.
Fifthly, it is necessary to amend provision on maternity leave. In
particular, maternity leave shall be 4, 5 or 6 months depending on working
conditions and disability rate of employees similar to those provided under
Law on Social Insurance in 2006.
Sixthly, it is necessary to amend provision on right to temporarily
assign employees to perform other works than those in the labor contract
stipulated in Article 31 of Labor Code. Accordingly, employers are not only
22


entitled to temporarily assign employees to other work but also entitled to

send employees to other working places for a limited period.
Seventhly, it is necessary to amend labor discipline definition so as to
expand legal sources for labor discipline. Accordingly, labor discipline is not
only stipulated in work rules but also collective labor agreements or other
documents. In detail, Article 118 of the Labor Code should be amended as
follow: Labor discipline includes compulsory provisions applied to all
employees during performance of labor rights and obligations stipulated in
labor regulation, collective labor agreements or other documents.
Eighthly, it is necessary to decrease the stipulated period in which the
disciplinary violation is counted to be seen sufficient to apply dismissal in
case employees are absent without authorization or plausible reason. Where
an employee is absent without authorization or plausible reason for three
accumulative days per month or ten accumulative days per year, such
employee shall be subjected to dismissal.
Ninthly, it is necessary to replace provision on “material liability” with
“liability of compensation for property damage” of employers. Cases should
be classified based on damage value instead of damage forms (causing
damage or loss). Simultaneously, the selection of compensation level (partly
or wholly) should not be fixed but should be freely decided by employers
and declared in work rules or contract of responsiblity (if any).
Tenthly, procedures for lay-off of four cases in Article 44, 45 of the
Labor Code should be stipulated uniformly (in case works for employees
cannot arranged). Accordingly, procedures for such cases should be that
before laying employees off, employers shall consult local organizations
representing employees, report labor agencies and while their responsibility
for payment of severance allowance to employees should still be remained.
Eleventhly, it is necessary to further clarify cases where employees
regularly fail to fulfill works under the labor contracts. The regulation may
be stipulated as follow: The case employees regularly fail to fulfill works
under the labor contracts is the case where employees fail to fulfill work

quota or assigned work due to subjective reasons, whose the incompletion of
work dutieshas been recorded in writing or reminded in writing repeatedly
for at least three times in a month or five times in a year.
Twelfthly, it is necessary to define what is an "economic reason".
Accordingly, law should differentiate two economic reasons: 1) Direct
impact of global, regional and domestic economic crisis; 2) Enterprise
restructure under a decision of competent agencies.
Thirteenthly, it is necessary to limit circumstances in which employees
are entitled to unilaterally terminate a labor contract with indefinite term.
23


Fourteenthly, it is necessary to increase compensation level for
employers when employees unilaterally terminate labor contract in
contravention of law which is equivalent to compensation level of
employers. This means that such compensation level should be equivalent to
2 months of salary of employees under the labor contracts.
Fifteenthly, it is necessary to stipulate procedures and orders for
settlement of employees’ complaints.
Sixteenthly, it is necessary to prescribe employers’ right to settle
complaints of employees, labor collectives on other employees or labor
collectives in the unit, which relate to rights, benefits and obligations of the
relevant parties in the labor relations.

CONCLUSION

1. Labor management is an objective indispensable activity of all
business operation process. Labor management can be understood as a
control by a competent subject over respective objects in labor relation in
order to achieve the goals of such a labor use. In labor legislation sector, the

afore-mentioned competent subject includes state and employers.
2. In labor relations, based on the ownership to properties of the unit,
labor management right is granted to employers. This is considered as a
natural right and “privilege” of employers. Unlike the right to labor
administration of the state, employers' right to labor management is the right
which shows unilateral will of employers but is governed by legal provisions
and agreements of parties in labor relation.
3. Concepts of employers' right to labor management in different
countries in the world are based mainly on two theories: Institutional theory
and Contractual theory. In labor relations, employers' right to labor
management is a natural and traditional right regardless of any theories.
Right to be performed under employers’ desire is gradually replaced by right
under legal provision.
4. Contents of law on employers' right to labor management include
two fundamental issues: Right to establish labor management tool and right
to organize and perform labor management in the unit.
5. Law on employers' right to labor management plays an important
role: concretizing state management requirements in labor field, creating a
legal basis for employers' right to labor management to bepracticed as well
as ensuring freedom and self-mastery right in business operation and
promoting business production, this, in turn, ensures employment and
income for employees, contributing to stability, harmony and development
of labor relation.