ECONOMY

Vietnam’s labor issues likely hamper trade pact with European Union

Updated at Tuesday, 22 Jan 2019, 09:23
The Hanoitimes - Vietnam needs to take its revised Labor Code into account as the revision aims to align the law with the ILO’s standards, particularly on issues concerning collective bargaining and freedom of association.
The EU-Vietnam Free Trade Agreement (EVFTA) may not be ratified as soon as expected if Vietnam makes no progress in addressing key labor issues, experts warned.
 
The EVFTA has strict requirements on labor standards
The EVFTA has strict requirements on labor standards
Under the labor chapters of the EVFTA, Vietnam is obliged to reform both its legal system and its institutions and practices to ensure the realization of the fundamental principles and rights at work. The European Parliament, which is in charge of approving all treaties or international trade agreements that the EU joins, has strict requirements on labor standards in FTAs to ensure that workers in the involved countries can fully benefit from the agreement when it is in place.
According to Chang Hee Lee, International Labor Organization (ILO) country director for Vietnam, the EVFTA might go before the European Parliament in March.
Until then, if Vietnam makes no progress in meeting labor requirements based on ILO declarations on basic principles and rights, the EU ratification of the agreement may not happen.
Vietnam has not yet ratified three out of eight basic conventions, including Convention 98 on collective bargaining, Convention 87 on freedom of association, and Convention 105 on forced labor.
According to Lee, Vietnam’s Ministry of Labor, War Invalids and Social Affairs plans to present Convention 98 for ratification this May, Convention 105 next year and Convention 87 in 2023.
Lee said that such a ratification plan is good but not enough for the European Parliament, whose term will end this May ahead of elections. If there is no progress before the election, the possibility of the EVFTA being ratified by the EU would be low.
Revised Labor Code needed
Vietnam also needs to take its revised Labor Code into account as the revision aims to align the law with the ILO’s standards, particularly on issues concerning collective bargaining and freedom of association, as well as to meet the requirements of the Comprehensive and Progressive Agreement for Trans-Pacific Partnership (CPTPP), which came into force in Vietnam on January 14.
According to Sarah Galeski, co-chair of the HR & Training Sector Committee of the European Chamber of Commerce (EuroCham) in Vietnam, both the CPTPP and EVFTA require Vietnam to reaffirm its commitments under the 1998 ILO Declaration on Fundamental Principles and Rights at Work.
As planned, the revised Labor Code draft should have been released last September. However, the draft is not yet available.
According to experts, Vietnam’s current legal framework already has many of key concepts of ILO standards. The revised Labor Code draft will further strengthen Vietnam’s implementation of these principles.
Under Article 8.1 of the current Labor Code, employers are prohibited from discriminating against employees on the basis of the employee’s joining or participating in a trade union. They are also restrained in the termination of labor contracts of employees who are also union officers.
According to Galeski, these provisions already reflect the principle of the ILO Convention 98 that says workers shall enjoy protection against acts of anti-union discrimination with respect to their employment.
The draft Labor Code includes detailed provisions prohibiting discrimination and harassment of trade union members, she said.
Vietnamese law forbids employers from carrying out various acts of interference with employees establishing, joining or participating in a trade union.
Moreover, the draft Labor Code introduces a new approach to collective bargaining which shifts the focus from one negotiation session to an ongoing process, Galeski added.
“The ratification of ILO Convention 98 will demonstrate Vietnam’s commitment to worker rights and provide the European Parliament with reassurance that Vietnam will comply with its labor obligations under the EVFTA,” Galeski from EuroCham said.
Minh Tam