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VIETNAM ACADEMY OF SOCIAL SCIENCES
GRADUATE ACADEMY OF SOCIAL SCIENCES
............e & f.............

TRAN VAN HUNG

STRIKES IN FOREIGN INVESTMENT
ENTERPRSIES IN THE
SOUTHERN KEY ECONOMIC ZONE

SUMMARY OF ECONOMIC DOCTORAL THESIS

Ha Noi - 2019



The thesis has completed:
GRADUATE ACADEMY OF SOCIAL SCIENCES

The scientific instructors:
1. Associate Professor, PhD. Nguyen Van Ngai
2. Associate Professor, PhD. Nguyen Huu Dung
Reviewer 1: Professor, PhD. Ngo Thang Loi
Reviewer 2: Associate Professor, PhD. Le Thanh Ha
Reviewer 3: Associate Professor, PhD. Dang Thi Phuong
Hoa

The dissertation will be approved by the doctoral
thesis dissertation Council at the Graduate Academy
of Social Sciences

DD/MM/YY: …… …………

The dissertation will be storaged at
1. Information and Library Center, Graduate
Academy of Social Sciences
2. National library

Ha noi - 2019



VIETNAM ACADEMY OF SOCIAL SCIENCES
GRADUATE ACADEMY OF SOCIAL SCIENCES
............e &

f.............

TRAN VAN HUNG
STRIKES IN FOREIGN INVESTMENT
ENTERPRISES IN THE
SOUTHERN KEY ECONOMIC ZONE
Major
Code

: Economic Management
:9340410

SUMMARY OF ECONOMIC DOCTORAL THESIS
The scientific instructors:
1. Associate Professor, PhD. NGUYEN VAN NGAI

2. Associate Professor, PhD NGUYEN HUU DUNG

Ha Noi - 2019



INTRODUCTION
1. The necessity of the research
After 30 years of reform, Vietnam was changed from the central planning economy
into market economy together with the profound economic integration, this has facilitated
the formation of numerous enterprises especially foreign direct invested enterprises (FDIs).
FDI has made great contributions into the achievement of the Vietnamese economic reform
as well as created jobs and improved employees’ living conditions the Vietnam’s position
in the international arena. On the other hand, FDI capital has created the diversity in the
economic structure as well as the complexity in industrial relations because they came from
different countries. Each country has its own culture and management which results in
increasingly growing industrial disputes and strikes, According to the Ministry of Labor
and War Invalids and Social Welfare from 1995 to late 2017, there were more than 6400
strikes happened in more than 40 provinces nationwide. Most of strikes happening in FDIs
in the Southern key economic zone (SKEZ), accounting for 74% of all strikes. This has
affected the stability of the socio-economic situation and investment environment in
Vietnam greatly. That examining characteristics, causes and driving and harmful factors
of strikes is the most concerned mission which helps to design and implement measures
that make contributions into building up harmonious industrial relations, limimiting
conflicts, mitigating disputes and prevent strikes. Therefore, I has chosen the topic “Strikes
in FDIs in the Southern key economic zone” as a topic for my Ph.D. dissertation – Major
in Economic Management.
2. Objectives and content of the thesis
The overall objectives of this thesis is to set up a framework and model to analyze and
study the factors affecting strikes in FDIs and use them to study and identify factors

influencing strikes in FDIs in the SKEZ. The specific objectives include the following:
- Summarize theories and empirical evidence on strikes in Vietnam and around the world.
- Have an understanding of the actual situation of strikes and industrial relations in FDIs
in Vietnam and in the SKEZ
- Set up theoretical framework and model to analyze factors influencing strikes in FDIs
in Vietnam.
- Use theoretical model to evaluate factors affecting strikes in FDIs in the SKEZ.
- Identify characteristics of workers who usually take part in strikes in FDIs.
- Suggest solutions that help subjects participating in industrial relations in FDIs improve
their functions and activities to prevent and mitigate strikes.
3. Research scope and subject
- The subject of the research is strikes in FDIs in the SKEZ. The thesis focuses on
studying and identifying factors influencing strikes in FDIs in the SKEZ.
- Scope of the research: FDIs in the SKEZ.
- Timing: the period from 2007 to late 2017.
- Respondents/subjects of the survey and research: employees working in FDIs in the
SKEZ; related subjects such as state labour management bodies; Foreign-invested
capital attraction and management bodies; Epzone and industrial management boards;
workers’ residence management, VCCI management, provincial leaders of Vietnam
General Confederation of Labour; Labor Management Office in epzones and industrial
1


parks; ILO experts, Management of FDIs; leading experts and scientists, etc., researcher
as professionals.
4. Research methodology
The thesis has been conducted based on the combination of qualitative and quanlitative
methods to answer the research questions. Qualitative method has been used to analyze,
evaluate and consolidate factors influencing strikes from socio-economic environment,
government and laws and at the same time it has been used to establish framework and

measurements for the research concepts while quantitative method has been used to check
these measurements which are used in practice to come to conclusions on factors affecting
strikes.
5. New contributions:
- Set up a framework to analyze factors influencing strikes and industrial relations in
Vietnam.
- Set up qualitative model to analyze factors influencing strikes from four groups of
factors: trade union, employees, employers and systems of internal regulations in
businesses.
- Build up the model to inspect characteristics of employees affecting the probability of
strikes in FDIs.
- Find out factors and the influence of each factor on the intention to go on strike of
employees in FDIs in the SKEZ.
- Find out personal characteristics of employees that affects the probability of strikes in
FDIs in the SKEZ.
- Test, compare and evaluate evaluations of causes of strikes drawn from stasticstics
perspective of State authorities and those of actual surveys of experts and employees.
6. Practical and theoretical contributions:
From theoretical perspective:
- Review, consolidate and evaluate researches into the actual situations of industrial
relations as price will fly in in Vietnam to find the gaps for the research as well as to
serve as the bases for the for further researches.
- Present, analyze, consolidate, compare industrial-relation-related theories applicable
worldwide and in Vietnam to serve as bases for researches and applications in Vietnam.
- Set up a framework to analyze strikes and industrial relations in Vietnam, which
combine analyses of microeconomic and macroeconomics elements; qualitative and
quantitative analyses.
- Set up a framework using quantitative method to analyze factors influencing strikes
including two-party and three-party industrial relations from four groups of factors:
trade union, employees, employers and internal regulations system in businesses.

- Establish quantitative analysis model to find out characteristics of employees affecting
probability of strikes in FDIs.
- Find out factors and the extent to which each factor affects the intention to go on strike
of employees in FDIs.
- Find out personal characteristics of employees affecting the probability of strikes in
FDIs.

2


- Test, compare and evaluate evaluations of causes of strikes drawn from statistics
perspective of State authorities and those of actual surveys of experts and employees.
From practical perspective:
- Evaluate the actual situation and characteristics of strikes of FDIs in the SKEZ.
- Analyze and evaluate main causes of strikes in FDIs in SKEZ.
- Evaluate characteristics of employees participating in strikes and probability of strikes
in businesses.
- Suggest four groups of solutions to the Government, trade union, employers and
employees based on the analyses of causes, actual situation, new contexts on the basis
of suggesting viewpoints, practical orientation that can help to prevent strikes and build
up harmonious healthy industrial relations.
7. Content of the research:
The research includes an introduction, a conclusion and four chapters:
Introduction
Chapter 1: Basic issues and overview of strike-related researches
Chapter 2: Literature review and methodology
Chapter 3: Factors influencing strikes in FDIs in the SKEZ.
Chapter 4: Viewpoints, orientation and solutions
Conclusions and suggestions for further researchers
CHAPTER 1: BASIC ISSUES AND OVERVIEW OF STRIKE-RELATED

RESEARCHES
Over the past years, the Labor Code was continuously amended and supplemented in
2002, 2006, 2007, and 2012 with the purpose of preventing and limiting consequences of
strikes as well as promote and create basic foundation for rights and obligations of parties
participating in industrial relations to step-by-step put these relations into legal framework.
However, building and improving industrial relations are facing great difficulties and
challenges. In this chapter, the thesis introduces and systemize concepts and definitions
about labor, strikes as well as characteristics and interactions of actors in industrial
relations; review strike-related and industrial-relation-related researchers of Vietnamese
and international scholars to use as bases for researches and applications in controlling and
managing labor market in the new era; finally it summarizes industrial relation
management models and lessons learnt from prevention and limiting strikes in some
countries. Based on analyses and consolidation of some researches regarding strikes and
industrial relations, the author has found out gaps to research.
1.1 Terminologies and characteristics of strikes and related issues
1.1.1 Terminologies:
Definition: strike is basic human right of employeesacknowledgeda long time ago in
the legal documents of the United Nation, International labor organizationand in Vietnam
and other countries in the world. Regulating the right to go on strike in the labor code is
one of the progresses the labor code; this embodies Constitution making it suitable into the
market economy and guarantees the employees to have more conditionsto protect their
own rights and benefits.

3


According to Article 209 of Labor Code (2012): “(1) A strike is a temporary, voluntary
and organized stoppage of work by the worker’s collective in order to achieve the
demands in the process of the labour dispute resolution. (2) The strike shall only be carried
out in regard to interest-based collective labour disputes and after the statutory period as

stipulated in Clause 3 of Article 206 of this Code expires.”.
Labor Code 2012 also defines some terminologies: Employee; Employer;
Workers’ collective; The representative organization of the worker’s collective at
grassroots level ở; The “representative organization of employers”; Labor dispute.
The collective labour dispute on right means “a dispute between a worker’s
collective and the employer arising out of different interpretation and implementation
of provisions of labour laws, collective bargaining agreements, internal working
regulations, and other lawful regulations and agreements”. A collective labour
dispute on interest means “a dispute arising out of the request of the worker
collective on the establishment of new working conditions, as compared to the
provisions of labour laws, collective bargaining agreements, or internal working
regulations, or other lawful regulations and agreements, in the negotiation process
between the worker’s collective and the employer”.
1.1.2 Characteristics of labour disputes and strikes
Characteristics of labour disputes: Labour dispute is understood as conflict that
arises to a high level where there are different actions happening. One party will take
unilateral action while the other will carry out actions to prevent the former’ ones.
Characteristics of strikes: it is just a temporary stoppage of work in a certain period
of time without being long-lasting or permanent; a strike cannot be a personal action while
it is an organized action of a collective; According to the Labour Code, a strike is only
carried out in the scope of a worker’s collective in regard to interest-based collective labour
disputes for financial purpose, strikes must not be used for political purposes since this will
be considered a disguise of strikes or taking advantage of strikes to serve non-economic
objectives; From economic perspective, the purpose of strikes is to achieve demands on
rights and benefits for a worker’s collective; from social perspective, the collective nature
of strikes is a phenomenon that contributes to the instability of social order and can lead to
disorder and panic of people and community; from political perspective: strikes can be a
phenomenon that causes political unrest in a country.
1.1.3 Actors in industrial relations
The Government, employer and his representative, employee and Trade union as his

representative.
1.1.4 Interactions in industrial relations
Figure 1-1: actors in social dialogue at a business with trade union; Figure 1-2:
Business without trade union; Figure 1-3: Industrial relations and labour criteria.

4


pr
oce
du

sm
ni

ms
Me
ch
a

nis

Mechanisms of
labor relation

ee
pl
oy
Em

s
re

3

u
ed
oc
pr

&

s&

2

Social
community

ha
ec
M

res

Government

Social
community

Trade Union

Employer
Employee

Worker

Mechanisms & procedures

Employer

Manager
1

Actor of social clialogue

Worker

Manager

Figer 1-3

Standards Labor

Figer 1-1

Salary
Working time
Rule of working
Safety

Other

Figer 1-2

Actor of IR

1.1.5 Characteristics of industrial relations:
Martin and Bamber (2005) define four "characteristics” that lead to the differences
among industrial relations of countries, namely, role of the government, autonomy of
business management, characteristics of Trade Union and the role of collective bargaining.
1.1.6 Industrial relations system
Industrial relations system of each country includes elements of industrial relations
which form a frameworks of the whole industrial relations system. Each country has its
own industrial relations system. An so-called adequate system comprises of 6 elements:
representative, conciliation, arbitration, court, counseling, government's management.
1.1.7 Law and regulations on resolution of Labor disputes and Strikes
Labor-dispute-related and strike-related issues are regulated in details in Chapter XIV,
including 41 articles from article 194 to 234 of Labour Code 2012.
1.1.8 ILO's Conventions regarding labor disputes and
Convention No. 87; Convention No. 98; Convention No. 105; Convention No. 131;
Convention No. 135; Convention No. 154; Convention No. 173.
1.2 Overview of strike-related researches in Vietnam and worldwide
1.2.1
International researchers regarding strikes
Strikes due to failures in negotiations: Hicks (1932) claimed that strikes happened
because of mistakes or failures in negotiations. Gramm, (1987) and McConnell, (1987),
two American researchers also found out that strikes took place at the rate of 13% in
contract negotiation with from 1,000 employees. Gunderson et al. (1986) in Canada found
out that strikes happened at the rate of 13% with contract negotiation with from 200
employees. According to Card, (1990) strikes due to failures in negotiation in the US and

Canada is from 10% and reached the peak of 35% in 1970s to 20th century.
Strikes due to interest conflicts and asymmetric information: Kennan and Wilson
(1993); Fernandez and Glazer (1991) claimed that strikes took place to find out balanced
results of actions in reasonable framework and adequate information. Function of strikes
is to improve information of either party so that they could match their expectations.
Strikes due to macroeconomic factors such as economics, inflation and
unemployment: According to Harrison and Stewart (1989), strikes relates to business
cycle. Their findings are strong enough to confirm that business cycle (GDP,
unemployment rate, agricultural production cycle) is related according to Vroman (1989),
Booth and Cressy (1990), and Ingram et al (1993). Ashenfelter and George Johnson (1969)
Cramton et al (1999) had the same findings.

5


Strikes due to internal microeconomic factors in businesses: Alutto & Belasco,
(1974); Feng, (2006), Snyder, (1975), Dixon, (2003); Roscigno, (2001, 2004), Velden
(2012)…cclaimed that strikes were due to employee’s job dissatisfaction and distinctive
features of businesses.
In summary, overseas empirical researches into strikes shows different findings
depending on approaches, models and research methodologies as well as data collected
from different sources. Each method or approach has its own strengths and weaknesses.
However, you can see four main approaches depending on different background theories
which find out different evidence leading to strikes of employees. They are (1) Bargaining
Theory, (2) Asymmetric information, (3) Analyzing strikes based on business variables
such as business cycle , inflection, unemployment, and (4) Researches based on Behavior
Theory/ job satisfaction, which means job satisfaction of employee decides whether strikes
happen or not. Each approach has found out authentic evidence of causes of Strack's in
different historical periods. Characteristics of strikes overseas are that they are lead by
trade union and and trade unions an independent representative of employees. And strikes

are for benefits not for rights, which means employers always obey laws and regulations
in implementing employment agreements or collective bargaining agreements
1.2.2 Strike-related researches in Vietnam
Researches on strikes and labour disputes: researches of Nguyễn Ngọc Quân
(1997), Phạm Xuân Hương (2001), Vương Vĩnh Hiệp (2014), Phan An (2008), Dương Văn
Sao (2009), Vũ Quang Thọ (2012). Đỗ Thị Vân Anh (2010), Nguyễn Hữu Dũng (2012),
Jeoung Yo Kyung (2013) and Jan Jung-Min Sunoo (2007).
Researches on industrial relations and tripartite consultation system: Vũ Việt
Hằng (2004), Lê Quang Sang et al (2010), Nguyễn Duy Phúc (2011), Phạm Ngọc Thành
(2015), Nguyễn Viết Vượng (2010), etc.,
Reseaches from legal perspective regarding industrial relations and strikes: Đỗ
Ngân Bình (2005), Nguyên xuân Thu (2009), Nguyễn Xuân Thu (2008), Lê Thị Hoài Thu
(2012), Vũ Thị Thu Hiền (2016), etc.,
Reseaches on building and developing labour forces: Nguyễn Đăng Thành (2007),
Nguyễn Thị Lan Hương (2009), Lê Duy Bình et al (2009), Trần Kim Dung (2005), etc.,.
Researches regarding strikes and Industrial relation in Vietnam show that strikes in
Vietnam have the following characteristics: (1) all strikes are spontaneous, not following
the procedures and processes stipulated by law, (2) trade unions are not independent since
they are formed and paid by employers, (3) most of strikes are for the rights (which are
banned according to the labor code) because the employers do not implement the
employment contracts correctly, (4) causes of strikes come from mistakes of three parties,
namely, the government, employers, employees and their represetative - trade union, (5)
most of the strikes happened in FDIs in Ho Chi Minh City, Dong Nai Province and Binh
Duong Province.
1.3 The gaps
So as we can see, there have been a lot of researches into strikes, industrial relations
and labor legislation in generak at different types of businesses. These made great
contributions into building harmonious industrial relations and contribute to limitation and
prevention of Labor disputes and strikes over the past years. However, research used in
6

Vietnam mainly based on qualitative methods to find out results focusing on reflecting the
actual situation using statistics tools, describing data recorded by Department of Statistics
and local governments. Some researches have used data from sociological surveys but have
not use quantitative method to perform regression analysis to fight down factors affecting
strikes as well as suggest a model that can be used widely. these researches took place at
the same types of business in different places in Vietnam. Particularly that have not been
any researches to identify factors influencing strikes, characteristics of employees
attending strikes as well as to analyze competence, attitude and conflicting natures of actors
in FDIs in the SKEZ in an open system of socio-economic and political environment of
Vietnam and this is the main cause of strikes in FDIs in in the SKEZ over the past years.
Therefore, profound researches into strikes in FDIs in in the SKEZ using the combination
of qualitative and quantitative methods is new approach that has scientific and practical
contributions because it does not overlap the previous researches.
Conclusion of chapter 1
From the basic issues of strikes, we can see that strikes have existed for a long time and
Hoffman acknowledged buy more sap countries in the world. Going on strike is the basic
and legal right of employees. Labor legislation of Vietnam adknowledges the right to go
on strikes of employees and has the procedures to guide strikes adequately in details. After
reviewing researches regarding spice and Industrial relations in Vietnam and what why the
offer has filed the gaps for his research.
CHAPTER 2: LITERATURE REVIEW AND METHODOLOGY
The objective of this chapter: the author tries to (1)systemize, consolidate and compare
theories and models to analyze Sprites and Industrial relations to use them as bases for
analyzing and doing research in the following chapters; (2)study the actual building and
managing industrial relations and resolve labour disputes and strikes in some countries of
which historical background, economic and political system and culture are similar to those
of Vietnam or countries with advanced industrial relation management that Vietnam want
to direct to; (3) build up concepts, framework and model to analyze factors influencing

strikes and selecting suitable methodology to achieve the objectives of the thesis.
2.1 Strike-related and industrial-relation-related theories
2.1.1 Strike theories
2.1.1.1 Political and organizational theory of strike
According to this view, individuals organize themselves to pursue common interests,
and strikes occur to the extent that there is an organizational capacity for such action. As
the Webbs suggested, there are two general methods by which the trade union movement
can secure its objectives: either by bargaining directly with employers or by using the
legislative process of legal enactment. Availability of the latter method results in strikes
being related to political events
2.1.1.2 The Theory of Bargaining and Strike Activity
This theory attributes more strategic autonomy to labor and management, assuming
that each party has perfect information about the other's intentions. According to the
bargaining theory, economic conditions are the most important determinant of the
propensity to strike.

7


2.1.1.3 Accident theory of strike
It contends that the majority of strikes are the result of faulty negotiation. This point
of view contends that a good way of reducing strikes is to identify variables that increase
uncertainty for one or both parties in the bargaining process. The probability of strikes
may be determined by the institutional settings of collective bargaining which may
include the organizational structure, customs, and practices.
2.1.1.4 Social change theory of strike
This theory views rapid social change as a source of societal strains. That is, rapid
industrialization and urbanization break down social groups, generate anomie, and
consequently lead to protest. Strikes are one manifestation of this protest.
2.1.1.5 The Agitator ‘Theory’ of Strikes

This theory argues that “every strike has a cause’ was misleading and one-sided
because it threw no light on either why workers believed a problem was a grievance or
why grievances led to strikes; in fact, grievances themselves were rarely self-evident, they
usually needed pointing out, fomenting, exacerbating and ultimately exploiting.
2.1.2 Marx theory
The point of view the Marx Theory represents that workplace relations by the
reflections of the in equality and the conflict of interest between the parties in the society
distributed among the three ‘actors’. The three ‘actors’ hold common belief that employees
and this is inevitable.
Trade union is the representative of the employees to counteract the
are entitled to demand for a minimum quality of living. Besides, discussion and bargaining
capitalists' exploitation
and also is a weapon to bring progressive changes to society. The
must be the preferred way to solve disputes and that the state does not have a limited but clear
fact that trade
union should focus on improving the position of working-class in the
roles as an arbiter in certain matters (Singh & Singh, 2011). The Industrial Relations Model
capitalism system
is necessary.
envisaged
by Dunlop reflects the existing Kenyan Tripartite Consultation System. The
2.1.3 System
andSystem
modelModel
of industrial
relations
according to Dunlop
Dunlop's
is shown (see
Figure 2.1).

Figure 2-1: Industrial Relation Model according to Dunlop 1958
Inputs

Transformation

Actors (employers,
employees & state)
Contexts
(Technological,
market & power)

•
•
•
•
•

Bargaining
Conciliation
Arbitration
Legislation
Judgement

Outputs

Rules

Ideology
Input
General Environment

Dunlop model
covers
three
groups
of actors: government, employer and employee,
Figure 2.1:
Dunlop’s
Systems
Model
other factorsSource:
influencing
the
industrial
Singh &
Singh
(2011) relations affected by outside conditions including
technology, market and the great impact of other factors of the three other mentioned
The heroic
assumption
Dunlop that
ideology
of Industrial
Relations
must be
groups of actors.
According
to by
Dunlop,
the the

form
of rules
are outputs
that System
the industrial
one or compatible inspite of the fact that each actor has its own ideology has been challenged
relations system is looking for. Rules in this context includes (1)rules to control all
that if the system of industrial relations is so well integrated, and if the goals and values of
payments; (2)
expected responsibilities and results from employees including discipline
the actors are so much in agreement, how is it that industrial conflicts occur at all? This
rules; (3)rules to identify rights and obligations of employees and employers including law
assumption is spurious in reality (Frege, Kelly & McGovern, 2011).
and regulations and terms and conditions of collective bargaining agreement; (4)
formalities to build up rules and (5) formalities to apply the rules.
2.1.4 Interest and Incremental Institutional Change
26
The basic principle of this model is that compliance and promulgation of rules are far
from perfect. There are always future situations that policy makers cannot predict. Besides,
when rules are implemented at different locations, in different environmental conditions
8


and at different times, they can be interpreted in a way that policymakers cannot predict in
advance. In addition, policymakers, rule builders and society participate in a continuous
interaction process.
2.1.5 Theory of behavior and job satisfaction
Job satisfaction is the attitude toward the most widely studied work among topics
studied in industrial psychology, psychology and organizational behavior. According to
Henne & Locke, (1985), resistance is another form of action that an unhappy employee

can use and resistance is also a form of protest by trade union. People tend to join trade
union for a number of reasons, including obtaining support if there are any problems at
work or seeking for improved working conditions and pay. A strike is often an effort to
change the cause of job dissatisfaction.
2.2 Practice of building industrial relations and resolving labour disputes and
strikes in other countries
In this section, the thesis focuses on researching the practical construction of industrial
relations and solutions for dealing with strikes in 4 countries: China, Korea, Japan and
Germany. Lessons learned in the development of a harmonized industrial relation to
limit strikes for Vietnam.
The State promulgates and implements fully the legal system of labor to manage and
develop harmonious industrial relations at National, Regional, industry and enterprise
levels; Establishing Industrial Relations Council from the central to local levels;
Establishing a Labor Court as an independent court system; the State Labour authorities
always monitors closely to actively intervene and solve labor disputes right from the
beginning; setting up representative bodies of employees in private businesses; collective
bargaining is the responsibility of both the employer and the representative of collectives
of employees; Mechanism for resolving labor disputes based on the use of various diversed
methods of settling disputes through negotiation, mediation/conciliation councils,
arbitration or court, etc.,
2.3 Factors influencing strikes
Based on the literature review of strikes and industrial relations and gathering,
systemizing, analyzing and combining researches related to strikes in Vietnam and other
countries, the author realized that there are six groups of factors influencing the intention
to go on strike up employees. Among these five groups have direct influence, namely, (1)
group of government and labour law-related factors, (2) group of internal-regulationrelated factors, (3) group of employer-related factors, (4) group of trade-union related
factors, (5) group of direct employee-related factors. Besides, group No. 6 is that of factors
relating to macroeconomic environment such as business, inflation, unemployment rate,
population and labor, culture-society, development strategy as wel as national science and
technology advance level, etc, that indirectly influence strikes.

9


Macro Environment

Internal regulation

Trade Union

Employee

2.4 Methodology
2.4.1 Design of the research
Figure 2-2:Concept framework
suggested by the author
Employer
STRIKE
Government and Law
National level

Macro environment

Employer
Tripartite Consultation System

- IR from Economic reform

- Economic and social
Trade Union

environment
- Labor market

Employee

Trade Union

Government

- SKEZ industrial strategy

STRIKE

Employer
Two party in IR

National level

Macro environment

Employee

Employer

Business Level

Tripartite
System
by the Consultation
author

- IR from EconomicSource:
reform Concept framework suggested
2.4.2- Economic
Analysis
and framework:
social
environment
Trade Union
Government
From
the concept framework, the author
suggested a framework
for analyzing STRIKE
groups
- Labor market
of factors
influencing strikes in FDIs
- SKEZ industrial strategy
Employer
Figure 2-3: framework for analyzing factors
influencing strikes in FDIs
Macro Environment

Internal regulation

Two party in IR
Employer

STRIKE

Government and Law

Employee
Business Level

Trade Union

Employee

Source: Analysis framework suggested by the author
Design of framework for analyzing factors
influencing strikes in FDIs
12
Figure 2-4: Quanlitative model for analyzing factors influencing strikes
- Vietnam socio-economic context in transitional period
- Labour law and policies
- Strategy for industrializing and modernizing the country and the SKEZ

STRIKE

Figure 2-5 Quantitative model for analyzing factors influencing strikes
Age

Salary

Bonus and income increase

Gender
Marital status

Welfare benefit
Residence

Mid – shift meal

Internal
regulations

Home town

Insurance
Year of work

Work itself
Human resource policies
Contract/Collective labor agreement

Working conditions

STRIKE

12

Competence and leadership of leaders

Employer

Cultural and behavior of

leaders

Legal complience

Employee

Legal understanding
Enticement/ drawn
Competence of trade union leaders

The power of trade union
Independence of trade union

Trade uinon
Internal communication
Employer relationship
Employee relationship
3

10


Binary logistic regression model for analyzing characteristics of employees
participating in strikes

No. Variable
1
2
3
4
5

6
7
8

Table 2-6: Hypotheses for Binary logistic regression
Hypothesis

symbol
(+/-)
Age
Young people usually go on strike
(-)
Education less educated people usually go on strike
(-)
Hometown Immigrant employees usually go on strike
(+)
Marital
Unmarried employees tend to go on strike than the married
(-)
status
ones
Residence non-houseowners usually go on strike
(-)
Contract
Employees without employment contracts or short-term
(-)
contracts employees usually go on strike
Income
Low-income employees usually go on strike
(-)

Seniority Senior employees rarely go on strike
(-)

Conclusion of chapter 2:
Chapter 2 has generalized the whole literature review and research method of the
thesis. First of all, it gathered and evaluated the theories relating to industrial relations and
strikes. Then, it analyzed the practical building of industrial relations and solutions to deal
with strikes in four countries, namely, China, Korea, Japan and the Federal Republic of
Germany, came up with valuable lessons learnt for Vietnam. Finally, it generalized the
research process and method for the thesis. With the research method and the way of
processing and analyzing data in accordance with the international standards, the thesis
will study and analyze factors influencing strikes in FDIs at THE SKEZ fully, scientifically
with high reliability.
CHAPTER 3: FACTORS INFLUENCING STRIKES IN FDIs IN THE SKEZ
In recent years, strikes have taken place increasingly in terms of quantity, size and
complexity, affecting business results of enterprises, upsetting life of employees and
causing many other social issues. Since 1995, when the Labor Code came into effective,
there have been more than 6,400 so far, among them those of FDIs accounted for more
than 74%. Strikes in FDIs happened mainly in the SKEZ, accounting for nearly 70%
nationwide. To get a good understanding of the practical strikes in FDIs in economic region
in the South as well as to identify factors influencing strikes is the objective of this chapter.
3.1 The socio-economic situation of the SKEZ
3.1.1 The socio-economic situation
In 30 years of reform - “Doi moi”, the Region has attracted 14,577 FDI projects, with
a total registered capital of US$149,372million, accounting for 56.2% of that of the total
projects and 45.1% of the total registered capital of the whole country. In the top of 5
localities that attract foreign invested capital in the country, four located in Region, namely,
Ho Chi Minh City, Binh Duong, Dong Nai and Ba Ria-Vung Tau provinces. During the
11

reform process, the results of the socio-economic development the Region are the key
factors to attract FDI for it as well as have made great contributions to it.
3.1.2 Contributions and limitations of FDIs in the SKEZ
Figure 3-1: Criteria reflecting contributions of FDIs in SKEZ.
FDI in SKEZ/Whole FDI (%)

100

58

58

49

49

44

56

Number of
business

Number of
employees

Capital

Net Revenue

EBIT

Tax and other
obligations

0

Limitations: The prominent downsides of FDIs are using outdated technology – price
transfer - tax evasion; devastating and polluting the environment; spreading of their
positive affect to local enterprises is still weak; the number of jobs created is not equivalent
to the number of FDIs, employees’ living conditions have not been high, and labour
disputes and strikes tend to increase.
3.1.3 General achievements in socio-economic development of the Region
Figure 3-2: Important socio-economic indexes of the SKEZ compared to those of the
whole country 2016-2017(%)

3.2

…

40

Ta
x

45

EB
T

42

l
Re
ve
nu
e

32

Ca
pi
ta

be
r

of
…

44

Nu
m

of
th
e…
ue

Va
l

l

Im

ita

50

40

-E
xp
or
t

of
…

45

-C
ap

…

be

r

ge

or
ke
r
w

er
a

tio
n

W
or
k

Ar
e

Po
pu
la

a

…

in
…

0

Ta
x

17.7

56

Nu
m

9.2

21

60
40

GD
P

41

50

FD

I

100

Practical situation of actors in industrial relations in the Region
State representative: MOLISA has 63 departments of Labor, Invalids and Social
Welfare (DOLISA) at provincial and city levels. DOLISA offices support and supervise
697 district departments. Until the end of 2015, there were only 500 labor inspectors in
Vietnam. Employers and representatives: As of 2017, the country has had 11,940 FDIs,
equivalent to 3% of the total number of businesses in the country, in which the SKEZ has
6,964 FDIs equivalent to 58% of the total number of FDIs nationwide. According to the
current law, Vietnam Chamber of Commerce and Industry (VCCI) and Vietnam
Cooperative Alliance (VCA) are two groups of representative of employers. Employees
and representatives: As of the end of 2017, there were about 4.5 million workers working
in the FDI sector with rather high average income of more than VND
9million/person/month. According to Statistical Yearbook 2017, the number of workers
working in FDIs in the Region is 2.61 million, accounting for 58% of the number of
workers in FDIs nationwide. Employees are mainly immigrants and young people from all
over the country. Trade Union is representing legitimate rights and interests of employees.
The role of Trade Union is continuously developing and expanding over the period. The
structure of the General Labor Federation is quite large with branches in all 63 provinces
and cities and districts.
12


3.3 Practice of strikes in FDIs in the SKEZ
3.3.1 Quantity of strikes
Figure 3-3: Strikes in the whole country from 1995 to 2017
5000
Number of strike

2561
2031
968
525
317
0
1995-1999 2000-2004 2004-2009 2009-2014 2015-2017
Figure 3-4: Rates of strikes according to economic sectors (%)
150

State owner

100
50
0

14

40

29 34

47

Private

84 76 79
73 74 69 74 79 81 72
68 74 74 7476
63 54 61 66

48

1989
1990
1991
1992
1993
1994
1995
1996
1997
1998
1999
2000
2001
2002
2003
2004
2005
2006
2007
2008
2009
2010
2011
2012
2013
2014
2015
2016

201…

0

30

66 59

FDI

3.3.2

Localities where strikes took place
Hình 3-5: Strikes in provinces and cities 1995-2017(%)

150
100
50
0

23

8
14

20
10

29

47

49

12
14
20
54

11
10
8
71

4
28

16

11

21

18

21
9

8

20
14

19
23

35

5
27

42

44

40

35

34

18

27
9

39

49

49

12

34

22

36
24
28

36

36

39

18

19

23

16
16

20

23

32

21

30

30

22

33

20

16

27

52
19
7
21

34

32

26
13

22
13

28

32

50

49

21
7
23

21
11
19

62
18
7
13

1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017

HCMC

Dong Nai

Binh Duong

Other

3.3.3 Some characteristics of strikes in FDIs in the SKEZ
Figure 3-6: Rate of strikes in FDIs by country: 1995 – 2016
a) 1995 – 2010

32%

25%

31%

Taiwan

b) 2010 - 6/2016

5%
8%

38%
Korea

31%

Other

Korea

13

31%
Taiwan

China

Japan

Other


Figure 3-7: Rate of strikes in business by country: 2017-2018 – Figure 3-8: Rate of
strikes by industry
Japan
5%

PCI2017
China
10%

94

Figure 3-7

Other
17%

Figure 3-8

Other, 7%
Electric, 9%

Korea
44%

Garment,
47%

Wood
prossing, 14%

CHỈ SÔ NĂNG LỰC CẠNH TRANH CẤP TỈNH

Leather
shoes, 23%

Taiwan
24%

G

H

T

H

T

N

N
T

Korea

Taiwan

China

Japan

Garment
Electric

Other

Leather shoes
Other

Wood prossing

C

Table 3-1: Criterial of industrial relations (2014 vs.2017)

Bảng 2.7 – Các chỉ tiêu về quan hệ lao động (2014 so với 2017)
Tỷ lệ DN xảy
Labour Column

ra đình công/

mn.global-labour-university.org/

Số ngày bị
gián đoạn
sản xuất

ngừng làm
việc tập thể

mber 234, May 2016

Thiệt hại
kinh tế trên
tổng doanh
thu mất đi
do các cuộc
đình công

Khiếu nại của
những lao
động tham
gia đình công
được coi là
chính đáng

Yêu cầu của
người lao động
được giải quyết

prospects for pattern bargaining in Vietnam

Chi Do Quynh

right to
ce then
cial un). While
us’ (Chi
were ort of the
es, and
erprises
a longiinces of
Duong,
nds that
dination
stics of
ers, and
her cre-

attempt
A smallttempts
d as folployers,
n states
a deadstrike if
emands.
ot only
the de
workers
s in the

mon culplace.

T
Figure
3-9: Rate of strikes by month of a year
28.3% of all strikes.
Figure
Average
number
of days
of strikes over the past period
Figure 1:3-10:
Percentage
of strikes
by month,
2010-2014

Hình 3-10

Hình 3-9

2.5.3 Tóm tắt về Chất lượng lao động và Quan hệ lao động
C
T

N
N
N
PC
C

Source: Calculated by the author from VGCL strike statistics, 2016
Figure
3-11: Rate of strikes by province/city 1995-2017; Figure 3-12: Rate of strikes
Figure 2: Classification of strikes by duration, 2010-2011
by economic sector

32%
23%
HCMC

Dong Nai

27%

Figure 3-11

Figure 3-12

18%

Binh Duong

3%

23%
74%

Other

State owner

FDI

Private

3.3.4 Damages and benefits of strikes:
Strikes happen in waves during these two seasons. A strike
Strikes
leavestarts
economic
consequences
and
damages to businesses, and also affect the
wave usually
at companies
with strong
informal
worker organisation. These leading strikes often last for
benefits
of collectives and individuals at a certain level. Strikes are an indispensable and
more than one day (Figure 2). According to the ILO, 92% of
all strikes
ended
withmodern
employers
satisfying
workers’ deobjective
issue
of the

market
economy,
an effective tool to protect the rights of
mands (ILO 2011). Victory for the leading strikes tends to
employees,
which
inherently
weak
in comparison
change the
wageis
levels
of the whole
region
and encour- with those of employers. Strikes also
tatistics
spontaneous copy-cat strikes in other companies.
months
have ages
a positive
effect,
thatofisthe
to create
for competition and development of labor
However,
the
influence
leading motivation
strikes does not
ributing

spread
automatically. The direction of a strike wave dehe time
market.
pends on the three factors mentioned already: industrial
s as the
employer
networks.
ear, Tet,
3.4 clustering,
Analysis
of thecoordination,
influenceand
ofworker
economic
environment on strikes
ple, raisIndustrial Clusters
Figure
3-13:
Correlation
between
the
quantity of strikes and inflation rate
down in
The first decade of Doi Moi, Vietnam’s economic reform,
gh seacreated
clusters
of key industries,
although
the degreeof
ofstrikes and the right one shows the

The
left
colume
represents
the
quantity
also the
agglomeration differs from industry to industry. McCarty et
nted for
al. (2005) found the greatest tendency toinflation
cluster in the
garrate
(%).
Source: ILO Hanoi, 2011

Nicolas Pons-Vignon, E-mail:
Mbuso Nkosi, E-mail:
14


1500

30.0
Number of strike

Inflation (%)

1000

23.1

978

720

7.3 5.7

500

3.2

7.3

4.1

60 59 69 62 67 70

20.0

18.7

10.0
551 8.3
8.9 539 9.1 6.6
7.8 8.3
7.1
424
390 7.4
368
4.7

351
3.8 3.2
314 3.5
3.2
286
269
218
0.9
0.0
-1.7
99 142 124 152
90 -0.4
2017

2016

2015

2014

2013

2012

2011

2010

2009

2008

2007

2006

2005

2004

2003

2002

2001

2000

1999

1998

1997

1996

-10.0
1995

0

The rate of strikes in Vietnam has been greatly affected by inflation and
unemployment. Beside the industrialization and modernization policies, the labor market
has an influence on strikes.
3.5 Analyzing the influence of the government and legal institution on strikes
3.5.1 From Doi Moi 1986 to the date the first labour code in 1994
3.5.2 From 1995 to the date of the first amendment of the Labour code 2002
3.5.3 From 2003 to the date of the second and the third amendments of the Labour
code – 2006 & 2007
3.5.4 From 2007 to the date of the fourth amendment of the Labour code 2012;
3.5.5 From 2012 to date (early 2018)
Although Vietnam has continually changed its mechanism and labor law to adapt to
the labor market, during the transition process, changes of the Government and law are
not enough. These changes have not met those of the reality. Strikes increase and
industrial relations are more complicated when the labour code is amended.
3.6 Analysing the influence of employer, employee, trade union and internal
regulations in businesses on strikes
The results of regression analysis of 936 questionnaires of employees show that the
concepts, namely CD, LD, and LK are statistically significant at the significance of 5% or
reliability of 95%, while other concepts are not statistically meaningful. After eliminating
the non-statistically-significant concepts and retest the research model, the results showed
that Chi-square / df = 3.909; GFI = 0.944; TLI = 0.957; CFI = 0,965; RMSEA = 0.056,
showing that the model has been more suitable (Figure 3-14). CD, LD and LK variables
explain 36% variation of the intention to go on strike.
Figure 3-14: Regression analysis of factors influencing strikes

15


3.6.1 Findings and level of interpreting results of the research model

Three groups of actors, namely trade union, employees and employers all influence
strikes.
Table 3-2: Findings from strike influencing factors – quantitative research
cd_nld3
Trade union do not guide employees to sign labor contracts/
collective bargaining agreements
cd_nld4
Trade union does not take care of material and spiritual life for
employees
cd_nsdld3 Trade union is not allowed to take part in running business
activities
Trade cd_nsdld1 The relationship between Trade union officers and employees
union
is not good
cd_nsdld2 Trade union is not allowed to take part in negotiating and
building collective bargaining agreement.
smcongdoan Trade union at the business does not have the real power and
3
responsibilities.
ttcongdoan1 Trade union does not communicate and train labour law and
regulations to employees.
smcongdoan Trade union does not represent their role and voice in protecting
4
the rights of employees.
ttcongdoan3 Trade union does not play the role of intermediaries in
mediation and settlement of internal conflicts.
ttcongdoan4 Trade union at the business does not effectively communicate
feeling and expectations of its members to employers and state
authorities at different levels.
ttcongdoan2 Trade union does not hold periodic dialogues among it,

employees and employers.
Employ loikeo3
Being enticed and paid to join stoppages.
ee
loikeo4
Being threatened and forced to join stoppages.
Employ nluclanhdao1 Professionalism of business leaders
er
nluclanhdao3 Negotiation and problem-solving abilities of business leaders.
nluclanhdao2 Human resources management skills of business leaders.
3.6.2

Regression Analysis
Regression equation of the model can be written as follows:

3.6.3 Multi-group structure analysis.
The quantitative results show that the group of employees who are houseowners or
who resides in the company’s residence are influenced with CD, LD and LK variables
stronger than those who rent their own houses. In other words, the factor, namely, trade
union, leadership and enticement have little effect on the intention to go on strike of the
group of employees who rent their own houses.
16


The analysis results of groups with different types of contracts shows that employees
with short-term contracts are more affected by trade union and management styles but the
impact of enticement is low. On the contrary, long-term contract employees are more
affected by enticement.
3.6.4 Analysing employees’ characteristics influencing strikes
The model with all variables shows that in 433 strikes and potential strikes, it has been

able to forecast 173 (40%). In the case of no strikes (503), it can forecast 350 times
(69.6%), in general, the model can forecast 55.9%.
Table to verify the significance of regression coefficients in the model shows that only
education (hocvan), hometown (diaphuong), and accommodation (choo) are statistically
significant with p-value < 0.05 so it is possible to reject the hypothesis H0 with the
coefficient β = 0.
We can rewrite the equation as follows

The results show that the effect of hocvan variable to the intention to go on strike
(DC123). With an initial probability of 0.5, the effect is 0.5 (1-0.5) 0.191 = -0.023875,
while the effect of diaphuong variable is 0.10875, choo is 0.041. Therefore, the higher the
education level is, the lower the intention to go on strike is, employees whose hometowns
are from other places tend to go on strike more than local ones, and employees who owns
or rent their own houses tend to go on strike less than the employees living in the
company’s dormitory or accommodation.
3.6.5 Findings on the causes of labour disputes and strikes
Statistic data on causes of labour disputes and strikes from employees surveys and
experts’ surveys
Figure 3-15: Causes of labour disputes and strikes (employees and experts)

lu
on
gt

hu
on
Ta
g
ng
lu

on
ta
ng g
ca
th
kb ap
ao
kk hiem
yh
op
do
ng
vi
ph
am
hd
ql
kh
ie
ul
ua
ql
t
ka
nt
oa
ta
n
ng
ca

nh
ka
ie
nt
u
oa
nv
es
in
cv
h
na
ng
nh
o
c
m
to
nh
ie
m
nq
kh
at
kh
e
kn
gh
i
b u le

aa
nk
kc
dd
ha
m
s
oc
sd
qu
sk
yk
ro
ra
m
n
au
g
th
ua
nv
xu h
cp
ha
sa
m
th
ai
kd
un

g

83.3%83.3%80.0%76.7%83.3%80.0%
80.0%83.3%86.7%83.3%83.3%
100.0% 80.0%80.0%73.3%76.7%73.3%80.0%
66.7%
63.3%70.0%
80.0%
60.0%
40.8%
29.6% 31.8% 29.1% 26.8% 25.6% 25.6% 23.1% 27.2% 31.4% 32.6% 37.1% 36.2%
30.1% 36.3% 28.7% 29.0% 32.2% 32.5% 30.6%
40.0%
20.0%
0.0%

3.7

NLD
Employee
es

Chuyên gia
Expert

Causes of strikes
After analyzing the influence of groups of factors influencing strikes in FDIs in the
SKEZ, the author systemized causes of strikes by group of factors as follows:
3.7.1 Causes from macroeconomic environment factors
Economic issues, namely, inflation, unemployment, policies to develop the economy in

terms of industrialization and modernization and those to attract foreign invested capital
have influence on strikes.
17


3.7.2 Causes from groups of government and law-related factors
Firstly, over the past years, the competence of lawmakers as well as the quality of the
laws and byub-law documents are not good and do not meet and address practical needs;
Secondly: Legal regulations and policies are not synchronized and overlapping; Thirdly:
The competence of officers who implement labor law at the local level is too weak;
Fourthly: State authorities who directly manage FDIs (Management Boards of EPZs and
IPs) have not been good at getting a good understanding of practical situations to detect
and timely address problems under their authority; Fifthly: Localities competing for
foreign invested capital have proved to be easy for investors in terms of dealing with labor
and employment violations; Sixthly: the guidance and communication of labour law to
employees and employers have not met the requirements and have not been paid enough
attention; Finally: The current regulations on minimum wage are still not really
reasonable, minimum wage only meets 2/3 of the minimum needs of employees.
3.7.3 Causes from trade union
Table 3-3: Findings from quantitative analysis of trade union factors influencing strikes
cd_nld3
Trade union do not guide employees to sign labor contracts/
collective bargaining agreements
cd_nld4
Trade union does not take care of material and spiritual life for
CĐ
employees
cd_nsdld3
Trade union is not allowed to take part in running business
activities

cd_nsdld1
The relationship between Trade union officers and employees
is not good
cd_nsdld2
Trade union is not allowed to take part in negotiating and
building collective bargaining agreement.
smcongdoan3 Trade union at the business does not have the real power and
responsibilities.
ttcongdoan1 Trade union does not communicate and train labour law and
regulations to employees.
smcongdoan4 Trade union does not represent their role and voice in
protecting the rights of employees.
ttcongdoan3 Trade union does not play the role of intermediaries in
mediation and settlement of internal conflicts.
ttcongdoan4 Trade union at the business does not effectively communicate
feeling and expectations of its members to employers and
state authorities at different levels.
ttcongdoan2 Trade union does not hold periodic dialogues among it,
employees and employers.
3.7.4 Causes from employers
Firstly: Employees do not highly appreciate manners and competences of employers.
Table 3-4: Findings from quantitative analysis of employer factors influencing strikes
Employer
nluclanhdao1 Professionalism of business leaders.

18


nluclanhdao2
nluclanhdao3

Human Resources management skills of business
leaders.
Negotiation and problem-solving ability of
business leaders.

Secondly, many FDIs violated regulations in terms signing labor contracts or collective
bargaining agreements to avoid paying social insurance, health insurance, unemployment
insurance for employees. The results of the survey showed that 26% of employees said that
they went on strikes because labor contracts were not signed and 27% said that insurance
was not paid; Thirdly: many FDIs paid salaries, bonuses incorrectly, they cut down
employees’ allowances and used bonus and welfare intransparently; Fourthly: strikes
happened in FDIs with low productivity, low added value; low-technology; Fifthly: FDIs
have strict regulations on compliance with production regulations; Finally: Employers and
employees do not understand each other's customs, language and behavioral culture.
3.7.5 Causes from employees
Firstly : employees were enticed and actuated greatly to go on strike.
Table 3-5: Findings from quantitive analysis of employees’ factors influencing strikes
employees loikeo3 Being enticed and paid to join stoppages.
loikeo4 Being threatened and forced to join stoppages.
Secondly: Most employees in our country have low education level, only graduated
from junior high school; Thirdly: employees are young immigrants; Fourthly: salary is
too low and not enough for them to cover their necessities; Fifthly: employees in our
country have some limitations in the sense of discipline and industrial working style. Most
of them are immigrants from rural areas so they feel constrained and difficult to adapt to
the factory environment and that the income is inadequate;
Conclusion of chapter 3
The results of the structural model analysis (SEM) on the factors influencing
employees’ intentions to go on strike show that the research model is consistent with
sociological survey data and has practical significance. The model explains 36% of the

variation of the intentions to go on strike from trade-union-related factors; enticement and
factors related to competence and leadership culture of employers. The data of the model
shows that roles and functions of trade unions and enticement are two factors that have
great impact on the intention to go on strikes of employees. The results of the binary
logistic regression show that the characteristics regarding education, immigration and
accommodation have great impact on past strikes.
The results of statistical survey on causes of strikes: For causes of strikes, it can be
seen that experts emphasize salary, income and job satisfaction factors, then living
conditions. Meanwhile, from the employees side, they showed that the factors related to
the environment and working conditions contribute the most to causes of strikes not
income as mentioned in the national statistics of CIRD in 2015. Maybe over the past time,
regulations of labor law have clearly stipulated the minimum income as well as terms and
conditions that ensure the rights of employees, so the income and welfare factors are no
longer pressing to become causes of strikes while working conditions and internal
regulations still cause difficulties which are sometimes strict to employees.
19