Nghiên cứu các nhân tố tác động đến việc tranh chấp lao động – trường hợp các doanh nghiệp fdi từ hàn quốc tại việt nam

MINISTRY OF EDUCATION AND TRAINING
DA NANG UNIVERSITY OF ECONOMICS

KIM TAE KYU

RESEARCH ON FACTORS INFLUENCING LABOR
DISPUTES – CASE STUDIES OF FDI FIRMS FROM
KOREA IN VIETNAM
NGHIÊN CỨU CÁC NHÂN TỐ TÁC ĐỘNG ĐẾN VIỆC
TRANH CHẤP LAO ĐỘNG – TRƯỜNG HỢP CÁC
DOANH NGHIỆP FDI TỪ HÀN QUỐC TẠI VIỆT NAM

DOCTORAL DISSERTATIONS IN ECONOMICS

DA NANG, 2022


MINISTRY OF EDUCATION AND TRAINING
DA NANG UNIVERSITY OF ECONOMICS

KIM TAE KYU

RESEARCH ON FACTORS INFLUENCING LABOR
DISPUTES – CASE STUDIES OF FDI FIRMS FROM
KOREA IN VIETNAM
NGHIÊN CỨU CÁC NHÂN TỐ TÁC ĐỘNG ĐẾN VIỆC
TRANH CHẤP LAO ĐỘNG – TRƯỜNG HỢP CÁC
DOANH NGHIỆP FDI TỪ HÀN QUỐC TẠI VIỆT NAM

MAJOR: BUSINESS ADMINISTRATION
CODE: 62.34.01.02

DOCTORAL DISSERTATIONS IN ECONOMICS

SUPERVISORS:
1: Pro. Dr. Nguyen Truong Son
2: Assoc. Pro. Dr. Nguyen Phuc Nguyen
DA NANG, 2022


AUTHOR’S DECLARATION
I declare that this thesis “Research on factors influencing labor disputes – case
studies of FDI firms from Korea in Vietnam” has been composed solely by myself and
that it has not been submitted, in whole or in part, in any previous application for a degree.
Except where states otherwise by reference or acknowledgment, the work presented is
entirely my own.

Da Nang,

2022
Declarer

Kim Tae Kyu

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TABLE OF CONTENTS
AUTHOR’S DECLARATION ................................................................................... III
TABLE OF CONTENTS ............................................................................................ IV
LIST OF ABBREVIATIONS .................................................................................. VIII

LIST OF TABLES ....................................................................................................... IX
LIST OF FIGURES ..................................................................................................... XI
CHAPTER 1: GENERAL INTRODUCTION OF RESEARCH ............................. 1
1.1. RATIONALE OF THE RESEARCH ................................................................... 1
1.2. RESEARCH OBJECTIVES AND QUESTIONS ................................................ 2
1.3. RESEARCH SUBJECTS AND SCOPE .............................................................. 3
1.4. RESEARCH METHOD ....................................................................................... 3
1.5. SIGNIFICANCE OF THE RESEARCH .............................................................. 4
1.5.1. New theoretical contributions ........................................................................ 4
1.5.2. New practical contributions ........................................................................... 6
1.6. DESIGN OF THE RESEARCH ........................................................................... 6
CHAPTER 2: THEORETICAL BACKGROUND AND CONCEPTUAL
FRAMEWORK ............................................................................................................. 7
2.1. THE DEFINITION, RELATED THEORIES AND CONTENT OF LABOR
DISPUTES ................................................................................................................... 7
2.1.1. The definition of labor disputes ..................................................................... 7
2.1.2. Related theories .............................................................................................. 9
2.1.2.1. Unitarism ............................................................................................... 10
2.1.2.2. Pluralism ................................................................................................ 10
2.1.3. The content of TC ........................................................................................ 12
2.2. IMPACTS OF TC ............................................................................................... 14
2.2.1. Tangible impacts .......................................................................................... 15
2.2.2. Intangible impacts ........................................................................................ 15
2.3. LITERATURE REVIEW ON TC AND REVIEW RESULTS.......................... 15
2.3.1. Literature review on TC ............................................................................... 15
2.3.2. Literature review results ............................................................................... 30
2.4. RESEARCH CONCEPTUAL FRAMEWORK ................................................. 34
2.4.1. Research concepts and hypothesis development ......................................... 34
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2.4.1.1. Labor-related factor (LD) ...................................................................... 35
2.4.1.2. Trade unions factor (CD) ...................................................................... 38
2.4.1.3. Manager-related factor (NSLD) ............................................................ 40
2.4.1.4. Company-related factor (DN) ............................................................... 43
2.4.1.5. Labor-living related factor (SHLD) ...................................................... 46
2.4.1.6. Internally environmental factor (MTN) ................................................ 49
2.4.1.7. Externally environmental factor (MTNG) ............................................ 51
CONCLUSION OF CHAPTER 2 .............................................................................. 55
CHAPTER 3: OVERVIEW OF KOREAN FDI AND THE CURRENT
SITUATION OF LABOR DISPUTES AT KOREAN FDI IN VIETNAM ........... 56
3.1. OVERVIEW OF FDI INTO VIETNAM ........................................................... 56
3.1.1. Korean FDI in Vietnam................................................................................ 58
3.1.2. The contributions of Korean FDI to Vietnam’s socio-economic
development ........................................................................................................... 60
3.2. THE CURRENT SITUATION OF TC AT KOREAN FDI IN VIETNAM ...... 61
3.2.1. The current situation of TC in Vietnam ....................................................... 62
3.2.2. The current situation of TC at Korean FDI in Vietnam ............................... 66
CONCLUSION OF CHAPTER 3 .............................................................................. 68
CHAPTER 4: RESEARCH METHODOLOGY ...................................................... 69
4.1. RESEARCH PROCEDURE ............................................................................... 69
4.2. QUALITATIVE RESEARCH............................................................................ 70
4.2.1. Data collection method ................................................................................ 70
4.2.2. Analysis methods ......................................................................................... 71
4.2.3. Qualitative research in detail ........................................................................ 72
4.3. QUANTITATIVE RESEARCH ......................................................................... 87
4.3.1. Questionnaire design and scale formulation ................................................ 87
4.3.1.1. Questionnaire design ............................................................................. 87
4.3.1.2. Scale formulation .................................................................................. 88
4.3.2. Sample and sampling method ...................................................................... 89

4.3.2.1. Sample size ............................................................................................ 89
4.3.2.2. Sampling method ................................................................................... 89
4.3.3. Description of the overall survey ................................................................. 90
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4.3.4. Data analysis methods .................................................................................. 91
4.3.4.1. Descriptive statistics .............................................................................. 91
4.3.4.2. Percentage statistics ............................................................................... 91
4.3.4.3. Cronbach’s Alpha test ........................................................................... 91
4.3.4.4. Exploratory Factor Analysis .................................................................. 92
4.3.4.5. Confirmatory Factor Analysis ............................................................... 92
4.3.4.6. Research model and hypothesis adjustment .......................................... 93
4.3.4.7. Correlation and regression analysis ....................................................... 93
4.3.4.8. Testing violations of the model fit assumptions.................................... 93
CONCLUSION OF CHAPTER 4 .............................................................................. 94
CHAPTER 5: DATA ANALYSIS AND RESULTS ................................................. 96
5.1. CHARACTERISTICS OF SAMPLES ............................................................... 96
5.1.1. General descriptive statistics ........................................................................ 96
5.1.1.1. Response rate ......................................................................................... 96
5.1.1.2. Description of respondent demographics .............................................. 97
5.1.2. Descriptive statistics..................................................................................... 99
5.2. SCALE TESTING ............................................................................................ 101
5.2.1. Cronbach’s Alpha reliability analysis of the scales ................................... 102
5.2.2. Exploratory Factor Analysis ...................................................................... 104
5.2.2.1. Independent Variables ......................................................................... 104
5.2.2.2. Dependent Variable ............................................................................. 107
5.2.3. Confirmative Factor Analysis .................................................................... 108
5.3. TESTING RESEARCH MODEL AND HYPOTHESES ................................ 111
5.3.1. Testing research model .............................................................................. 112

5.3.1.1. Pearson correlation .............................................................................. 112
5.3.1.2. Regression analysis ............................................................................. 113
5.3.2. Testing violations of goodness of fit assumptions ..................................... 114
5.3.2.1. Testing the linear relationship between the dependent variable and
independent variables as well as heteroscedasticity ......................................... 114
5.3.2.2. Assumptions about the normal distribution of the residuals ............... 115
5.3.3. Testing the hypotheses ............................................................................... 117

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5.4. TESTING THE DIFFERENCE BETWEEN CONTROL VARIABLES AND
TC ............................................................................................................................ 120
5.4.1. Gender difference affecting TC ................................................................. 120
5.4.2. Marital difference affecting TC ................................................................. 120
5.4.3. Age difference affecting TC ...................................................................... 121
5.4.4. Difference in education affecting TC......................................................... 122
5.4.5. Difference in working period affecting TC................................................ 123
5.4.6. Difference in working positions affecting TC ........................................... 124
5.4.7. Hometown location difference affecting TC ............................................. 124
5.4.8. Difference in income affecting TC ............................................................ 125
CONCLUSION OF CHAPTER 5 ............................................................................ 126
CHAPTER 6: CONCLUSIONS, DISCUSSIONS AND MANAGERIAL
IMPLICATIONS ....................................................................................................... 128
6.1. CONCLUSIONS .............................................................................................. 129
6.2. DISCUSSIONS ................................................................................................. 132
6.3. MANAGERIAL IMPLICATIONS AND RECOMMENDATIONS ............... 137
6.3.1. For the State and regulatory agencies ........................................................ 138
6.3.2. For employers and firms ............................................................................ 139
6.3.3. For trade unions.......................................................................................... 142

6.3.4. For employees ............................................................................................ 143
6.4. LIMITATIONS AND DIRECTIONS FOR FUTURE RESEARCH ............... 145
THE AUTHOR’S PUBLISHED ARTICLE LISTS ............................................... 146
REFERENCES .......................................................................................................... 147
APPENDIX................................................................................................................. 155

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LIST OF ABBREVIATIONS
CD

Trade unions

CFA

Confirmatory factor analysis

CSR

Corporate social responsibility

DN

Company-related

EFA

Exploratory factor analysis

FDI

Foreign direct investment

FIA

Foreign Investment Agency

LD

Labor-related

NSLD

Manger-related

MTN

Internally environmental

MTNG

Externally environmental

SHLD

Labor-living related

TC

Labor disputes

VCCI

Vietnam Chamber of Commerce and Industry

VGCL

The General Confederation of Labor of Vietnam

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LIST OF TABLES
Table 1: Strikes by ownership, 2000-2018 ........................................................................ 63
Table 2: Strikes by industrial sector, 2014-2018 ............................................................... 64
Table 3: Cause of strikes, 2014-2018 ................................................................................ 65
Table 4: Strikes by FDI nationality, 2014-2018 ................................................................ 66
Table 5: The first consolidation of factors influencing TC ............................................... 72
Table 6: The second consolidation of factors influencing TC .......................................... 73
Table 7: Interview design and details ................................................................................ 75
Table 8: The evaluation of factors influencing TC ........................................................... 77
Table 9: The third consolidation of factors influencing TC .............................................. 78
Table 10: The original scales of factors influencing TC ................................................... 79
Table 11: The official scale of factors influencing TC ..................................................... 83
Table 12: 5-point Likert scale............................................................................................ 88
Table 13: The control variables and coding ...................................................................... 89
Table 14: Response rate..................................................................................................... 96
Table 15: Respondents’ demographics summary .............................................................. 98
Table 16: Mean, S. Deviation of each item ..................................................................... 100

Table 17: Reliability analysis results ............................................................................... 102
Table 18: KMO and Bartlett’s test for independent variables......................................... 104
Table 19: Total Variance Explained ................................................................................ 104
Table 20: Rotated Component Matrixa ........................................................................... 105
Table 21: KMO and Bartlett’s test for dependent variable ............................................. 107
Table 22: Total Variance Explained ................................................................................ 107
Table 23: Component Matrixa......................................................................................... 107
Table 24: CMIN............................................................................................................... 109
Table 25: RMR, GFI ........................................................................................................ 109
Table 26: Baseline Comparisons (Incremental fit index) ................................................ 110
Table 27: RMSEA ........................................................................................................... 110
Table 28: Standardized Regression Weights ................................................................... 110

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Table 29: Discriminant validity analysis result ............................................................... 111
Table 30: Correlations test result ..................................................................................... 112
Table 31: Model Summary .............................................................................................. 113
Table 32: ANOVA........................................................................................................... 113
Table 33: Coefficients ..................................................................................................... 114
Table 34: Independent samples test - Gender ................................................................. 120
Table 35: Independent samples test – Marriage Status ................................................... 120
Table 36: Descriptive – Marriage status .......................................................................... 121
Table 37: Test of Homogeneity of Variances – Age ....................................................... 121
Table 38: Robust Tests of Equality of Means - Age ....................................................... 121
Table 39: Descriptive - Age ............................................................................................ 122
Table 40: Test of Homogeneity of Variances – Educational level.................................. 122
Table 41: ANOVA – Educational level.......................................................................... 122
Table 42: Descriptive - Educational level ....................................................................... 122

Table 43: Test of Homogeneity of Variances – Years of Experience ............................. 123
Table 44: ANOVA – Years of Experience ...................................................................... 123
Table 45: Descriptive - Years of Experience .................................................................. 123
Table 46: Test of Homogeneity of Variances - Position ................................................. 124
Table 47: Robust Tests of Equality of Means - Position ................................................. 124
Table 48: Descriptive - Position ...................................................................................... 124
Table 49: Test of Homogeneity of Variances – Hometown location .............................. 124
Table 50: ANOVA - Hometown location ....................................................................... 125
Table 51: Test of Homogeneity of Variances – Wage level ........................................... 125
Table 52: ANOVA – Wage level .................................................................................... 125
Table 53: Descriptive – Wage level ................................................................................ 125

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LIST OF FIGURES
Figure 1: Research model of Jeremy Brecher ................................................................... 17
Figure 2: Research model of Jie Shen ............................................................................... 19
Figure 3: Research model of Duong Van Sao ................................................................... 22
Figure 4: Research model of Do Quynh Chi et al. ............................................................ 23
Figure 5: Research model of Vuong Vinh Hiep ................................................................ 28
Figure 6: Research model .................................................................................................. 54
Figure 7: Registered Capital of FDI in Vietnam, US$ billions ......................................... 57
Figure 8: FDI inflows to Vietnam by country in 2019 ...................................................... 58
Figure 9: Cumulative FDI inflows to Vietnam by country ............................................... 60
Figure 10: Number of strikes, 2000-2018 ......................................................................... 62
Figure 11: Research procedure .......................................................................................... 69
Figure 12: CFA result for the model ............................................................................... 108
Figure 13: SCATTER ...................................................................................................... 115
Figure 14: Histogram ....................................................................................................... 115

Figure 15: Normal P-P Plot ............................................................................................. 116

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CHAPTER 1: GENERAL INTRODUCTION OF RESEARCH
1.1. Rationale of the research
The Vietnamese Government issued the FDI law in 1987. FDI law shows that the
Vietnamese Government encourages foreign companies to make investments in major
industries such as manufacturing, automobile assembly, pharmaceutical and healthcare
treatments, etc. In this context, the influx of FDI into the country has increased and largely
contributed to social development. The latest data from the FIA of Vietnam shows that FDI
in Vietnam in 2019 reached US$38.2 billion, an increase of more than 7 percent as
compared to the same period in 2018. Around 3,883 new projects were licensed with a total
registered capital of US$362.5 billion in 2019. The Vietnam Briefing (2019) reveals that
FDI accounts for approximately 70 percent of the country’s total export turnover and
according to FIA, FDI contributed an average of 25 percent of total Vietnam’s GDP and
created 10 million jobs in 2019.
In terms of the investment relationship between Vietnam and Korea, it is reported
by KOTRA that the cooperation between two countries results in a successful investment
story (KOTRA, 2020). According to the report, cumulative FDI investment of Korean
firms to Vietnam is ranked No.1 and stands at US$67.7 billion with 8,467 projects in the
period of 1988-2019. Around 9,000 Korean FDI firms have invested in Vietnam, and they
contributed more than 30 percent of Vietnam’s exports and provided around 700,000 jobs
domestically (Invest Vietnam, 2020).
Despite these achievements, the number of TC in Korean FDI firms forms the
majority of the total TC according to VGCL. The lowest contribution of Korean FDI firms
to the total number of TC in FDI firms in Vietnam is recorded in 2015 (32.46%) while the
highest record is 46.12% in 2017 with 113 out of 245 cases of TC (Kim, 2019). Almost
40% of TC during 2014-2018 happened in Korean FDI firms (Kim, 2021) and have still

taken a rather larger proportion than other FDI nationality.
In 2020, a labor strike took place at the Korean FDI firm where a director who the
author knows well. According to him, his company paid an average of VND 9 million a
month for their employees with various allowances so that the wages were far higher than
other FDI nationalities and the minimum wage (VND 4.42 million regulated Dong Nai’s
minimum wage in 2020), but the TC took place. Given this situation, the author has a

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question as to whether TC still occur because of economic reasons that have been identified
as the cause of TC at Korean FDI firms in numerous previous studies conducted until 2014.
Are there other possible reasons behind economic reasons? Is it because of the so-called
‘Korean style’ inappropriate management method? Or has the company neglected some
emerging responsibilities such as CSR?
If the number of TC in Korean FDI firms has not decreased, it needs to be clarified
whether the solutions suggested by previous studies were effective or not.
This research has begun to find answers to the above questions. Although TC have
not abated since 2014, there has been relatively little research on TC in Korean FDI firms
since 2014, and in particular, there was no research conducted by any Korean since Jeoung
Yoo Kyung in 2013.
For the above reasons, the author selects the thesis topic: “Research on factors
influencing labor disputes – case studies of FDI firms from Korea in Vietnam”. The new
theoretical and practical contributions of this research are expected to help those FDI firms,
including Korean FDI firms to find out some solutions to minimize the adverse impacts of
TC on the corporate competency and to achieve their business targets.
1.2. Research objectives and questions
Many TC have often been identified in Korean FDI firms in Vietnam, and the
consequences are devastating. Although TC at Korean FDI firms in Vietnam are an
important issue to be studied, academic research and in-depth media coverage has so far

not been adequate.
The investigation into previous research has identified that there are eleven factors
potentially impacting the occurrence and settlement of TC at Korean FDI firms in Vietnam
(Kim, 2019), however, there is not yet an established model to determine the extent to
which these elements contribute to the variation of TC at Korean invested firms. Therefore,
the overall aim of this current research is to formulate its regression model which justifies
the influences of these identified factors on TC at Korean FDI firms in Vietnam.
Subsequently, the research was guided by the following specific objectives:
Firstly, a review of the current situation of TC in Vietnam and in Korean FDI firms.
Secondly, to identify the cause of TC occurring in Korean FDI firms, including
some emerging new causes.

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Thirdly, to analyze the theory of industrial relations that is the most suitable for the
current situation in Vietnam.
Finally, to present some solutions based on the research results to minimize or
reduce the occurrence of TC to employees, employers and company, CD and the State.
The following research questions are a result of the research objectives:
Firstly, what kind of research has been done on the occurrence of TC?
Secondly, what is the current situations of TC in Vietnam and in Korean FDI firms?
Thirdly, what factors affect TC in Korean FDI firms in Vietnam?
Fourthly, to which extent each factor influences the TC at Korean FDI firms in
Vietnam?
Fifthly, among the management views of unitarism and pluralism, what is the best
approach in modern society, especially in Vietnam?
Finally, how to set up and develop strategies and practices to manage TC at the
Korean FDI firms in Vietnam?
1.3. Research subjects and scope

The research subject considers the factors influencing TC occurrence such as LD
factor, CD factor, NSLD factor, DN factor, SHLD factor, MTN factor, and MTNG factor.
The thesis not only addresses the factors influencing TC (as specified in the research
subject), but also proposes solutions for dealing with influencing factors to prevent and
solve TC.
The scope of the current research involves employees of Korean FDI firms located
in Nhon Trach, Bien Hoa and Binh Duong area in the South, Dung Quat industrial parks
in the Central and Yen Phong, Que Vo Industrial parks, Bac Ninh in the North regardless
of managerial and non-managerial employees, and gender. The reason why the researcher
selected these areas is that these firms are located where the highest proportion of FDI
inflows from Korea into Vietnam. Research and survey data between 2010 and 2020, and
suggestions such as some reference and solutions by 2025.
1.4. Research method
The research will be carried out by employing the following qualitative and
quantitative research methods. The reason the author combines the two methods is that
qualitative research is primarily exploratory in nature, and helps a researcher better

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understand motivations, needs, processes, and rationale for behaviors. It provides deep
insights into a situation and helps form ideas or hypotheses for potential quantitative
research. Quantitative research tends to be more numbers-focused and can help to assess
hypotheses from qualitative research. Adding a quantitative approach to qualitative
research can provide a more holistic (and quantifiable) view of the subject matter the author
researching. Quantitative and qualitative research are complementary methods that work
well together to provide insights that are both deep and wide.
In this thesis, for qualitative research method, the author will review textbooks,
academic works, findings of domestic and foreign studies on industrial relations of LD
factor, CD factor, NSLD factor, DN factor, SHLD factor, MTN factor, and MTNG factor.

Then, the author suggested a research model to clarify the factors influencing TC. Finally,
the author will conduct several interviews with industrial relations experts, employers,
senior managers, and human resource managers of Korean FDI firms.
For quantitative research method, the author will survey and collect information
from questionnaires delivered to employees of Korean FDI firms in Nhon Trach, Bien Hoa
and Binh Duong area in the South, Quang Ngai in the Central, and Yen Phong, Que Vo
Industrial parks, Bac Ninh in the North. Then, the author will conduct data analysis utilized
SPSS (version 20) and AMOS (version 22) software programs.
1.5. Significance of the research
1.5.1. New theoretical contributions
The new findings of the research on the theoretical aspect are reflected through the
following research results.
Firstly, people have different ways of interpreting the events they come across in
their daily life. School and family circumstances, encounters at the workplaces, clubs,
religions, friends, society, and occupations influence most of the understandings.
Employment is one of the elements that influence people’s life. Hence, management and
the nature of employment are some of the issues that trigger heated debates. Generally,
people have two different perspectives of interpreting managerial practices that take place
at workplaces. These are known as unitarism and pluralism. Unitarists teach that
organizations need to have a common interest and a single focus of loyalty. Nevertheless,
this scenario is not the reality in many organizations. Different employees and

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organizational leaders hold different opinions and have competing interests. The pluralist
managerial perspective offers the best solution for dealing with contemporary
organizations. In the modern organizations, the workforce comprises people with different
cultural backgrounds. This diversity makes it hard for employees to share common
interests. Unitarists claim that CD is the main cause of conflict in organizations and that to

avoid conflicts, organizations need to eliminate CD. However, CD is not accountable for
workplace conflicts. Actually, conflict is endemic within the workplaces. Therefore, in this
thesis, the author will compare and analyze the management views of unitarism and
pluralism, and discuss the best approach in modern society, especially in Vietnam.
Secondly, most of the reviewed studies deal with the period till 2014. As TC have
not abated since 2014, the author believes a study extending the timeframe to 2020 is
timely. Therefore, in this thesis, based on the data up to 2020, the author will check whether
there are additional new emerging factors in addition to the factors have been investigated
so far, and these new emerging factors will provide basic data for future research.
Thirdly, almost all researchers named the factors affecting the occurrence of TC and
analyzed them as a single independent variable. However, it is necessary to further
subdivide and analyze the characteristics of each factor. For example, if the government’s
minimum wage policy causes a strike and it is the direct cause, the minimum wage policy
is set by the government and should be included in MTNG factor that cannot be changed
by workers, employers, and CD. If it is determined that the employer is not interested in
the basic life of the worker, wages may also be included in the NSDL factor. This means
that even the same variable can have different names depending on how they are viewed.
Therefore, in this thesis, the author will use a method of analyzing related factors by
grouping them.
Finally, although there are differences in the lifestyle and attitude of workers
depending on the region of origin, most of the previous research has been investigated
regardless of the region of origin. In an interview with a Korean kitchenware FDI owner
who is familiar with the author, he explained that most of the workers who took part in the
strike came from the northern regions, particularly Quang Tri and Quang Nam province.
Therefore, in his company no longer hires workers from Quang Tri and Quang Nam
province. It is necessary to investigate whether strikes occur more frequently in companies
with more workers from a specific region. Also, this point seems to be “not easy to say”

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by Vietnamese researchers. In this thesis, the author attempts to investigate the same
questions simultaneously for different regions to define regional differences.
1.5.2. New practical contributions
The author highlights this research’s practical contribution as below.
Firstly, most of the solutions reviewed by the author in the other studies that do not
answer the question of how to solve TC in the future. So, the author will provide specific
and practical solutions in resolving TC.
Secondly, given that the author used the survey conducted by employees of Korean
FDI firms in various regions, therefore, it is emphasized what aspects of employees of
Korean FDI firms consider important, and how these important points affect the occurrence
of TC. With reference to the results, it will be helpful for Korean FDI firms to establish
practical human resource management policies.
1.6. Design of the research
The thesis topic: “Research on factors influencing labor disputes – case studies of
FDI firms from Korea in Vietnam”.
The thesis comprises 6 chapters of main content, and conclusion, recommendations,
list of tables and figures, list of the author’s published works, references and appendix.
Chapter 1 – General introduction describes the background and statement of
problem in this research concerning the factors influencing TC at Korean FDI firms in
Vietnam. Furthermore, this chapter explains the objectives, research questions,
significance, and structure of the study.
Chapter 2 – Theoretical background and conceptual framework explores the
previous studies concerning TC and factors influencing TC. Conceptual framework is
adapted from the previous studies.
Chapter 3 – The current situation of TC at Korean FDI firms in Vietnam describes
the situations of TC in recent years in Vietnam, which pose the rationales to the current
study.
Chapter 4 – Research methodology explains research method, research design,
population and sampling, data collection and data analysis. Moreover, the research

procedure is also described in this section while the validity and credibility are justified.

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Chapter 5 – Data analysis and results present the findings which are drawn up from
the gathered and analyzed data concerning the hypotheses on the impacts of identified
factors on TC at Korean FDI firms in Vietnam.
Chapter 6 – Conclusions, discussions and managerial implications sums up the
whole study in terms of results reviews and regression model, and proposes the
recommendations to the Government, regulators, CD, employees, and Korean FDI firms
and employers to settle TC. Moreover, this last chapter also presents limitations and
suggestions for further study.

CHAPTER

2:

THEORETICAL

BACKGROUND

AND

CONCEPTUAL FRAMEWORK
2.1. The definition, related theories and content of labor disputes
2.1.1. The definition of labor disputes
OECE (2002) introduced the definition of TC based on International Labor
Organization Resolution Concerning Statistics of Strikes, Lockouts and other Action Due
to TC, a labor dispute is a state of disagreement over a particular issue or group of issues

over which there is conflict between workers and employers, or about which grievance is
expressed by workers or employers, or about which workers or employers support other

7|Page


workers or employers in their demands or grievances. This definition is the most widely
used definition of TC that in most instances the definition is derived from statistical
standards developed by international organizations such as the IMF, OECD, Eurostat and
ILO.
US Department of Labor defines TC in the Labor-Management Reporting and
Disclosure Act, any controversy concerning terms, tenure, or conditions of employment,
or concerning the association or representation of persons in negotiating, fixing,
maintaining, changing, or seeking to arrange terms or conditions of employment,
regardless of whether the disputants stand in the proximate relation of employer and
employee (US Department of Labor, 1987).
In the CD and labor relations adjustment act of Korea law defines, the term TC mean
any controversy or difference arising from disagreements between a CD and an employer
or employers’ association with respect to the determination of terms and conditions of
employment as wages, working hours, welfare, dismissal, and other treatments. In such
cases, the disagreements refer to situations in which the parties to labor relations are no
longer likely to reach an agreement by means of voluntary bargaining, even if they continue
to make such an attempt. As a result of TC, the following actions occur such as strikes,
sabotage, lockouts, and other activities through which the parties to labor relations intend
to accomplish their claims (Korea Legislation Research Institute, 2019)
In Vietnam, the understanding of TC is governed by Vietnam Labor Code. TC are
defined as disputes over rights and benefits related to employment, wages, income and
other working conditions, the performance of labor contracts, collective bargaining, and
vocational training. TC include personal TC between workers and employers and collective
disputes between labor collectives and employers. TC is the disputes about the rights, the

responsibilities, and the benefits which are raised between parties inside labor relationship.
TC include individual disputes between the employee and employers and collective
disputes between the group of employees and their employers. A collective labor dispute
is a dispute between the labor collective and the employer arising out of the different
interpretation and implementation of labor law, collective bargaining agreement labor
regulations, statutes, and other lawful agreements. Collective TC are disputes arising from
collective labor requiring the establishment of new labor conditions as compared to the
provisions of labor law, collective labor agreements, labor regulations or other legal

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regulations and agreements in the negotiation process between the group of the employees
and their employers (Vietnam Ministry of Labour, 2013).
Tran Ngoc Dien (2012) defined a labor dispute is a natural phenomenon in the market
economy. TC often arise when a conflict of rights and interests between the employee and
the employer to appear in the process of implementation of labor relations. Labor dispute
with the protesting activities is the spontaneous and passive self-defense as the employers
simply protect their right and interest when conflict of rights and interests between the
employees and the employers is not resolved promptly and satisfactorily, the climax of the
TC will be the strikes.
According to Vuong Vinh Hiep (2014), the employee and the employer have an
opposing relationship, in which they not only depend on each other but also have conflicts
of interests. As a result, TC between the two parties are unavoidable. TC refer to disputes
in terms of rights, obligations and interests arising between the parties in their industrial
relations.
As above, many definitions of TC are existing. It is difficult to understand the
definition precisely because TC arise in various forms and in many cases, they are resolved
through mediation after the occurrence. So, it is difficult to objectively measure and
evaluate TC numerically, and as Chae (2013) mentioned the standards and definitions for

TC that are considered strikes are clear. Therefore, the author uses the definition of TC in
this thesis, as Tran Ngoc Dien (2012) noted that the climax of the TC appears to strike (a
temporary, voluntary, and organized stoppage of work by the worker’s collective in order
to achieve their demands over rights, obligations and benefits) defines TC in the same
definition as labor strikes to measure and evaluate TC numerically and to avoid nonspecific definition of TC. This definition is also in the same context as labor strike, in which
TC mentioned in the CD and labor relations adjustment act of Korea law appear as an
action.
2.1.2. Related theories
People have different ways of interpreting the events they come across in their daily
life. School and family circumstances, encounters at the workplaces, clubs, religions,
friends, society, and occupations influence most of the understandings. Employment is one
of the elements that influence people’s life. Hence, management and the nature of
employment are some of the issues that trigger heated debates. Generally, people have two
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different perspectives of interpreting managerial practices that take place at workplaces.
These are known as unitarism and pluralism. The unitarist approach holds that workplace
conflicts are avoidable. According to this approach, managers may detour them by bringing
all the stakeholders together. They can and should make sure that an organization is
managed from a single source of power. Meanwhile, pluralists hold that workplace
conflicts are inevitable. Managers ought to convert them into profitable initiatives rather
than criticize them.
In this thesis, the author will compare and analyze the management views of unitarism
and pluralism, and discuss the best approach in modern society, especially in Vietnam.
2.1.2.1. Unitarism
According to Kim et al. (2019), there are two main theories of unitarism including
scientific management theory and human relations theory. The first theory has started from
scientific management theory of Taylor. In this theory, as a management practice, this
particular theory holds that the employment relations choices of management must start

from the assumption that employees are immature in the ways of work, are prone to avoid
it whenever possible, and have limited, self-centered aspirations and time-horizons. In so
far as these conflicts with the aspirations and time-horizons of organizations, efforts to
reduce the outward manifestation of internal tension are to be undertaken by direct and
highly rigid control of the workplace activities of employees. The second theory comes
from the so-called human relations school. In this case the reduction of organizational
tension is held to rest on the ability of individuals to achieve self-fulfillment in the
workplace. The principal task of management on this conception is to manipulate
workplace relations in ways that enable employees to feel personal satisfaction with being
involved with the organization. They are also expected to take an active interest in
developing the skills of employees as a means of demonstrating a commitment to their
personal well-being. In whatever form, the aim of this managerial approach to employee
relations is one that seeks to reduce internal tensions by developing the sense of workplace
satisfaction felt by employees through techniques that involve them in the organization and
regulation of work.
2.1.2.2. Pluralism
Pluralists differ from unitarists in that they start from a set of assumptions and values

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that workplace conflict is inevitable. Typical of those holding this perception is the view
that business organizations are complex social constructions made up of different interest
groups. Management and employees constitute two such groups, who, because of the very
nature of the factory system, are seen as invariably subscribing to different values and
objectives. It is also assumed that there will be different sources of authority within an
organization, and that the potential for conflict between them will always exist over the
organization of work tasks and the allocation of rewards. By recognizing the inevitability
of workplace conflict, those holding this perspective tend to regard conflict as necessary
for the health of an enterprise as it serves to bring grievances held by workers to the surface.

It is also argued that the potential for conflict provides a spur to managers to explore
innovative methods for handling it in a way that will produce the best results.
Acknowledging the existence of competing sources of authority, most notably in the form
of shop stewards or CD, is held by pluralists to offer benefits by allowing organizations to
deal with industrial relations issues on a collective basis. In this regard, it is argued to not
only provide management with the most efficient means for institutionalizing employment
rules and minimizing the level of workplace conflict, but to also encourage fairer outcomes
by enabling employees to organize and counterbalance the power of managers when
negotiating workplace contracts. It is on the basis of these conceptions that pluralists
generally accept the legitimate right of employees to bargain collectively and CD to act in
this capacity on their behalf (Fox, 1979).
Based on the article of Kim et al. (2019), the most famous theory drawing on a
pluralist frame of reference is Dunlop’ systems theory, which argues that industrial
relations are best regarded as a sub-system of the wider social system. The theory holds
work to be governed by a wide range of formal and informal rules and regulations, which
cover everything from recruitment, holidays, performance, wages, hours, and a myriad of
other details of employment. It asserts that these rules are what industrial actors try to
determine, that their establishment is influenced by the wider environmental context in
which the actors operate, and that the actors themselves share an interest in maintaining
the processes of negotiation and conflict resolution.
Pluralists draw their inspirations from the systems theory devised by Dunlop in 1958.
The theory treats industrial relations as constituents of a wider social system. They believe
that for an organization to succeed there has to be numerous leaders or lines of command

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to make sure that one leader does not pursue personal interests at the expense of others.
Unlike the unitarists who do not see the role of CD in organizations, pluralists believe that
CD plays a significant role in bringing sanity into an organization. According to pluralists,

organizations are more susceptible to conflicts than harmony. Hence, it is illogical to claim
that CD is the root cause of conflict witnessed in organizations (Kessler & Purcell, 2003).
In the related theories examined as above, what theory should the current situation in
Vietnam be managed? What is the best perspective? The assumption that workplace
conflict is avoidable, as the unitarists believe is not true. Unitarists teach that organizations
need to have a common interest and a single focus of loyalty. Nevertheless, this scenario
is not the reality in many organizations. Different employees and organizational leaders
hold different opinions and have competing interests. Consequently, it is hard for any
organization to circumvent workplace conflicts. Since it is hard for organizational leaders
to do away with competition within the organization, they need to look for ways of
exploiting the competition in a profitable way. The pluralist managerial perspective offers
the best solution for dealing with contemporary organizations including Vietnam. In the
modern organizations, the workforce comprises people with different cultural
backgrounds. This diversity makes it hard for employees to share common interests.
Unitarists claim that CD is the main cause of conflict in organizations and that to avoid
conflicts; organizations need to eliminate CD. However, CD is not accountable for
workplace conflicts. Actually, conflict is endemic within the workplaces.
2.1.3. The content of TC
According to Vu Thu Hien (2014), the content of TC including TC of jobs, TC about
wage and income, TC about working time and breaks, TC about working conditions, TC
about the violation of labor contract, TC about labor discipline and finally TC about the
signing and implementation of collective labor agreements. These contents are in some
ways the cause of TC.
Firstly, labor dispute of jobs is a dispute about the identification, performance or
change of a job between the parties in an employment relationship, including termination
of employment.
Secondly, wage and income are one of the top concerns of employees when entering
labor contracts with employers. According to experts in countries with developed labor
markets, disputes over wages and incomes are the highest proportion of disputes, and it
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always consumes the majority of the total number of TC which are processed and resolved.
However, the number of disputes over wages and income is not as great as other disputes
such as unilateral termination of labor contracts, disciplinary disputes in Vietnam.
Thirdly, TC about working time and breaks. It is the conflicts between employers and
employees regarding the regulation of working hours, extended working days, night shifts,
working overtime, and the failure to arrange reasonable breaks or unsolved absences. There
are many disputes which happen due to the employees who must work overtime while
resting periods are not so many. In fact, these TC include two basic types such as reducing
work hours and increasing rest periods. Normally, reducing work hours and increasing rest
periods are considered as the labor right and the interests of the workers and attached to
other benefits, the dispute over working hours and breaks is likely to occur in the form of
collective TC rather than individual TC.
Fourthly, when engaged in labor relations, employees always want to have a safe and
convenient working environment to avoid risks. Although the regulations on labor
environment have been strictly regulated by the labor law and the employers also commit
to provide working conditions as stated in the labor contract, the employers tend to find
other ways to reduce operating costs, and they may cut the cost which is occurred for
ensuring occupational safety and hygiene. Conflicts in labor protection are often expressed
in disputes about claims for work-related accidents or occupational diseases. Disputes
about social insurance are also one of the disputes related to working conditions. Disputes
over social security include not only disputes between employees who are working with
employers but also disputes between employees who have retired according to the regime
with the employer or with the social insurance agency, between the employer and the social
insurance agency.
Fifthly, TC about the violation of labor contract. This is the most common type of
labor dispute because a labor contract is the legal form that assure the labor relationship in
a market-oriented economy. Therefore, TC about the violation of labor contract refer to
other disputes. However, TC include disputes over the establishment, execution, alteration,

suspension, and termination of labor contracts. In short, the disagreement in labor relations
is the basis for the emergence of disputes. It is asserted that labor dispute due to the
unilateral termination of the labor contract is the largest number of disputes over all other
disputes.

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Sixthly, TC about labor disciplinary action are often represented under the form of
layoffs, leading to breakdown of labor relations. This dispute arises when the employer
issues a decision disciplining the employee because they believe that the employee has
committed an act of violation of the internal labor regulations of the enterprise. This is a
relatively common dispute in the market-oriented economy when the law gives the
employer the right to reward and discipline their employees.
Finally, TC about the signing and implementation of collective labor agreements. The
content of a collective labor agreement mentions most aspects of labor relations such as
employment, wages, working hours, break and resting periods, labor protection, and social
security. But disputes over the signing and implementation of collective bargaining are no
longer a matter of dispute between individual employee and the employers but dispute
between the employers and the group of employees. Typically, disputes over the signing
and implementation of collective bargaining arises when there is a refusal to negotiate or
sign agreements, when negotiating important and pressing issues. When there is wrong
implementation of the commitments. However, in conclusion, it is identified that the
collective bargaining agreement is essentially focused on the duration of the agreement and
its effectiveness is still low because of the inadequate and improper implementation of the
provisions.
Now, it is necessary to find out how TC affect individuals, companies, and society.
There are tangible and intangible impacts of TC to individuals, enterprises, and society.
2.2. Impacts of TC
TC at any stage, from small, simple scale to large and complex scale; from space,

time, content to type and method, have certain impacts on the production and business
situation of enterprises and on political, economic, and social stability. If a case occurs
within the scope of an enterprise only, it affects the production and business of enterprises.
As the case increases in number and scale, it will affect the production and business, and
the socio-economic stability of the region in which the industrial park is located and more
importantly, will affect political, social, and economic stability of the whole region (Vuong
Vinh Hiep, 2014). There are tangible and intangible damages of TC occur to individuals,
enterprises, and society.

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