2.2.1.2. Employers and employers' representative organizations
Employers: Article 6 of the Labor Code stipulates that "Employers are enterprises, agencies, organizations or individuals, if they are individuals, they must be at least 18 years old, hiring, using and paying labor." This concept is still vague and does not clearly identify the person responsible before the law for labor relations. In small and medium enterprises in Hanoi, employers are the ones who sign labor contracts as employers. Along with them are senior managers whose interests are closely linked to the interests of business owners.
Organizations representing employers: At the enterprise level, these organizations do not directly participate in labor relations but only play the role of an influential factor. In Vietnam, two organizations are considered the official representatives of employers: the Vietnam Chamber of Commerce and Industry (VCCI) and the Vietnam Cooperative Alliance (VCA). In addition, there are a number of associations such as the Textile and Garment Association, the Leather and Footwear Association, the Korean Business Association, the Japanese Business Association, and the Hanoi Small and Medium Enterprises Association (HASMEA).
2.2.2. System operating mechanism
The operating mechanism of the labor relations system in small and medium enterprises in Hanoi is a two-sided mechanism between employees (including individual employees and trade unions) and employers (excluding representative organizations). Activities demonstrating the way of interaction between these subjects include all forms of social dialogue at enterprises; forms of engagement between parties such as signing labor contracts, collective labor negotiations, and adoption of labor regulations; activities of conciliation, arbitration of disagreements, individual labor disputes, collective labor disputes, etc.
2.2.3. System input
The input of the system is the factor that affects the balance of interests of the subjects of labor relations, which is the source of problems in labor relations in enterprises. The basic factors are:
- New regulations of the law on labor relations, specific regulations of Hanoi City related to the rights and interests of employees and employers at the workplace.
- Changes in business policies and operations.
- Changes in the labor market cause the power balance between employees and employers to change.
2.2.4. System output
The system output includes direct outputs and indirect outputs.
- Direct outputs include the enterprise's labor policies (such as wages, working hours, working conditions, welfare regimes, etc.); regulations or standards of conduct of the enterprise (such as regulations on information exchange, procedures for resolving internal grievances and complaints, labor discipline, etc.)
- Indirect outputs are the consequences of direct outputs such as: working atmosphere, spirit of cooperation in labor relations, behavioral culture in the enterprise, labor productivity, proactive creativity in work, employee attachment to the enterprise, employee attachment to the employer, violation of labor discipline, labor disputes, etc.
2.2.5. Environmental factors
The environment of the labor relations system of small and medium enterprises in Hanoi includes external environmental factors and internal environmental factors.
The external environmental factors of the system include: The tripartite mechanism; laws and government (local government) influence; Trends in labor relations; Economic growth; Support institutions in labor relations; Grassroots trade union organizations and business associations... In which, the tripartite mechanism plays the most important role.
Internal environmental factors include: business production strategy of the enterprise, business management system, technology level and field of operation of the enterprise, employee qualifications, corporate culture, etc.
2.3. ANALYSIS OF THE CURRENT STATE OF LABOR RELATIONS AT SMALL AND MEDIUM ENTERPRISES IN HANOI
2.3.1. Analysis of labor relations capacity of partners
2.3.1.1. Ability to identify real problems and interests in labor relations
Healthy labor relations bring many benefits to both employees and employers. Therefore, all employees and employers want to build a healthy labor relationship in the enterprise. However, labor relations in small and medium enterprises in Hanoi still have many shortcomings. One of the main reasons is the ability to identify problems of the subjects. The ability to identify problems in labor relations is expressed in the ability to recognize cooperative interests and conflicting interests in the workplace.
For workers
Most of the employees in SMEs in Hanoi are migrant workers from other localities. Therefore, the two most important and long-term goals are: career stability and family stability. In which, career stability is the factor.
deciding factor. Career stability is expressed by maturity, professional advancement, and having a stable workplace. Family stability is expressed by having a stable home, getting married, and having children. Therefore, salary and working conditions are only immediate benefits, not long-term benefits.
Meanwhile, the survey results on the parties' perceptions of the long-term benefits of employees show the results in Table 2.2.
Table 2.2: Perceptions of parties on long-term benefits of employees
The factor that has the greatest impact on employee commitment to the company career | Wages and working conditions 53.8 66.7 |
Career development opportunities 38 25.3 | |
Corporate human resources strategy 3.8 6.8 | |
Labor market 4.4 1.2 | |
Total 100 100 |
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Source: Survey results of 166 SMEs in Hanoi
In the short term, wages and working conditions reflect immediate benefits and are conflicting interests between employees and employers (because they depend on the limited budget of the enterprise and directly affect profits). Meanwhile, career development opportunities and human development strategies reflect long-term benefits (determining promotion opportunities in the enterprise) and are cooperative interests between employees and employers (because: in the short term, these two goals are less dependent on the enterprise budget. In the long term, they are the common interests of both entities).
The survey results show that both employees and employers have a poor understanding of the long-term benefits of employees. Both parties believe that wages and working conditions are the decisive factors in the long-term commitment of employees to the enterprise. In particular, up to 83.9% of union officials believe that wages and working conditions play the most important role in employee commitment.
In fact, if employees are more mature in their careers, they can look for jobs in other companies with better salaries and working conditions. Employees will only stay with a company for a long time when they see opportunities that meet their long-term interests. At the same time, they can only stay with a company if the company sees that their stay is in line with the company's long-term interests.
Employee, employer
Development opportunities
Career money . salary &
and Promotion Opportunities
labor lawsuits in dynamic enterprises
Profit & reputation of
DN
Conflicting interests
(in the short term)
This incorrect perception will affect the behavior of employees as well as the labor policies of the enterprise. Employees are not really attached to the enterprise and vice versa, the employer does not have appropriate policies to attract employee commitment.
Benefits of cooperation
Diagram 2.2: Conflicting interests and cooperative interests between employees and employers
Source: Author
In particular, compared to employees, employers tend to appreciate the role of salary more and underestimate the role of career development in employee engagement. This difference further reduces the connection between employees and businesses.
On the other hand, 6.8% of employers believe that the human resource development strategy of the enterprise has the greatest impact on employee engagement. Meanwhile, the rate of support for this view among employees is only 3.8%.
These figures reinforce the view that: Employees working in SMEs in Hanoi do not really want to stay with the company long-term but only consider the company as a temporary workplace for career development.
For employers
Because SMEs in Hanoi are highly flexible, they often prioritize short-term benefits, which are profits. Therefore, most businesses still lack a brand development strategy to build reputation and develop.
sustainable development. Such a way of perceiving the problem can make the enterprise's labor policy towards maximizing immediate profits and limiting investment in developing human resources in the enterprise. Profit is a conflicting interest, so pursuing profit will definitely have an opposite effect on the immediate economic interests of employees.
The survey results show that up to 19.4% of employees believe that business owners never accept to reduce profits to increase salaries for employees higher than the market level. Only 4.5% of employees believe that business owners are willing to reduce profits to increase salaries for employees higher than the market level.
On the contrary, although 66.7% of employers believe that wages and working conditions are important factors that bind workers to the enterprise, only 49.1% believe that fair wages are the most important factor in improving the overall work efficiency of the enterprise. This shows that in the perception of employers, there is a huge difference between the overall efficiency of the enterprise and the commitment of employees. In other words, employee commitment is not closely related to the overall efficiency of the enterprise. As a result, the labor policy of the enterprise will not go in the direction of maintaining employee commitment.
2.3.1.2. Capacity of entities to enforce labor relations laws
Labor law is the framework for all actions of the parties in labor relations. Knowing, understanding and properly implementing labor law is the fundamental foundation for establishing and maintaining healthy labor relations in enterprises. Therefore, analyzing the level of understanding of labor law of the parties allows for a correct assessment of the ability to establish healthy labor relations in enterprises.
Level of understanding of labor law of subjects
The self-assessment results of the parties show that the level of knowledge of the subjects on labor law is still very limited. Especially union officials. Up to 10.3% of union officials surveyed said that their knowledge of labor law is still very limited (this rate is 6.2% for employers). At the same time, only 3.4% of union officials are confident that they have complete mastery of the contents of labor law.
Notably, the important subject of labor relations, the employer, also has quite limited understanding of labor relations, with 67.9% realizing that their understanding is only at a basic level or very limited. Meanwhile, 82.6% of employees believe that they can supervise at
average level and good supervision of labor law enforcement in enterprises. This can be explained by the fact that most employees are only interested in some of the most basic contents of labor relations such as minimum wages, overtime hours, etc. Therefore, although they are very confident, in reality, their real understanding of labor law is not much.
Indeed, up to 20.7% of union officials said that most employees have very limited knowledge of labor law. On the other hand, when asked about the subjects of social insurance, only 54.8% of employees answered correctly. This is one of the most basic contents of labor law. Moreover, up to 96.9% of employers said that it is necessary and very necessary to disseminate the law to employees. Therefore, it can be seen that employees actually have very limited knowledge of labor law.
Table 2.3: Subjective assessment of the level of understanding of labor law
Criteria
Level of understanding and monitoring ability | employee | Percentage (%) of staff Union | Employee | |
Level of understanding | Still very limited | - | 10.3 | 6.2 |
Know at the basic level | - | 65.6 | 61.7 | |
of the subject of labor relations | ||||
Know quite a lot | - | 20.7 | 22.2 | |
on labor law | ||||
Complete mastery | - | 3.4 | 9.9 | |
dynamic | ||||
Total | - | 100 | 100 | |
Monitoring capabilities | Unable to monitor | 4 | - | - |
of employees for | Low level monitoring | 13.4 | - | - |
law enforcement | Medium level monitoring | 53 | - | - |
labor law in | ||||
Very good monitoring | 29.6 | - | - | |
business | ||||
Total | 100 | - | - |
Source: Survey results of 166 SMEs in Hanoi
Enforcing labor laws in the workplace
The lack of understanding of labor laws by the subjects will lead to undesirable consequences and directly reduce the health of labor relations in small and medium enterprises in Hanoi. In particular, it increases the violation of labor laws by both employees and employers. And in fact, the violation of labor laws in small and medium enterprises is quite common today.
For business owners, the most common violations are:
- Signing labor contracts, negotiating collective labor agreements and labor regulations. The reason is that when a labor contract or collective labor agreement is signed, employees will have a clear legal basis to demand legitimate rights according to the law. One of the most basic rights is social insurance, health insurance and timely salary payment.
- Preventing the establishment and operation of grassroots trade unions. Most small and medium enterprises in Hanoi do not have grassroots trade unions. For example, in 2008, Cau Giay District had about 5,000 enterprises but only nearly 70 enterprises had grassroots trade unions. The main reason is that business owners put pressure on employees not to join trade unions or not to cooperate with higher-level trade unions in the process of promoting the establishment of grassroots trade unions.
Business owners who violate labor laws mainly fall into three categories:
- Due to lack of legal knowledge, they do not comply properly. This type is mainly small and micro business owners or newly established businesses.
- Having knowledge of labor laws but not implementing them properly due to lack of deterrence and punishment from law enforcement agencies. These business owners are after profits and often operate in the fields of trade and services. They deliberately violate the law. When discovered violating the law or after completing a number of contracts, they dissolve the business and establish a new business. Local labor management agencies find it difficult to punish these business owners and the sanctions are not deterrent enough.
- Deep understanding of labor laws and taking advantage of legal loopholes to circumvent the law. This situation is common in medium-sized enterprises and enterprises operating in the industrial production sector that employ a lot of workers. Typical violations are signing labor contracts with intermittent terms. That is, after the end of the fixed-term contracts, enterprises will let employees take a period of time off (usually from 1 to 3 months) and then continue to sign a fixed-term labor contract. The purpose is to avoid having to sign an indefinite-term labor contract.
For employees at small and medium enterprises in Hanoi, violations of labor laws are mainly due to limited awareness. Violations are manifested in agreeing with employers in not signing or signing incorrect labor contracts. Many employees unilaterally terminate labor contracts without prior notice to employers.
The lack of understanding and violation of labor laws by employers and employees at small and medium enterprises in Hanoi can be explained by the following reasons:
- Our labor law system is very complicated and unstable. Therefore, the parties find it difficult to research, difficult to implement and the benefits for each party are not much.
- SMEs often do not have a specialized legal research department in the enterprise while legal consulting services are underdeveloped in both quantity and quality.
- Workers and union officials do not receive basic training in labor law. Business owners often pay little attention to enforcing labor law as well as providing legal knowledge to workers.
- The staff of the executive committees of the trade unions at SMEs is often unstable, so there is not much time to learn about labor laws. On the other hand, the support from the higher-level trade unions is very limited. This leads to the consequence that the trade unions do not have enough capacity to disseminate knowledge of labor laws to employees.
- The number of SMEs is often very large and unstable. Therefore, it is very difficult for labor inspectors to control. Lack of strict supervision and punishment will make SMEs disregard the research and enforcement of labor laws.
Thus, both employees, union officials and employers have great limitations in their capacity to implement labor laws. Raising awareness, fostering knowledge and enhancing the capacity to implement labor laws for labor relations subjects at small and medium enterprises in Hanoi is the first step in establishing and maintaining healthy labor relations at enterprises.
2.3.1.3. Ability of the parties to establish and maintain healthy labor relations
Whether labor relations in an enterprise are healthy or not depends primarily on the capacity of the subjects to establish and maintain healthy labor relations. That capacity is demonstrated through the level of understanding of labor relations of the subjects, through the ability to apply that knowledge in establishing individual and collective labor relations.
Level of understanding of subjects of labor relations
Labor relations is a new scientific field introduced to Vietnam, so it is somewhat unfamiliar to both employees and employers in Vietnam. Small and medium enterprises in Hanoi