How Mediation and Labor Arbitration Councils Work in Settlement of Labor Disputes?

During and after the Covid-19 pandamic, the financial health of enterprises have been negatively impacted leading to management’s decision to reduce cost through termination of labour contract with employee. The illegal termination of labour contract could lead to disputes between employer and employee which sometime would cost the employer more than it gains. It is important for the employer to engage with labour lawyers to consult before taking the decision to consider factors that would involve. After disputes arise, mediator or labour arbitration councils could be used for resolving disputes.

Individual labor disputes shall be settled through mediation by labor mediators before being brought to the Labor arbitration council or the Court, except for the following labor disputes which mediation is not mandatory: disputes over disciplining under dismissal or unilateral termination of employment contracts; disputes over damages and allowances upon termination of employment contracts; disputes between a domestic worker and his/her employer; disputes over social insurance in accordance with social insurance laws, disputes over health insurance in accordance with health insurance laws, disputes over unemployment insurance in accordance with employment laws; disputes over insurance for occupational accidents and occupational disease in accordance with occupational safety and hygiene laws; disputes over damages between an employee and enterprises, organization that dispatches the employee to work overseas under a contract; disputes between the outsourcing employee and the employer using outsourcing employee.

The mediator shall complete the mediation process within 05 working days from the receipt of the request from the requesting parties or the authority. Both disputing parties must be present at the mediation meeting. The disputing parties may authorize another person to attend the mediation meeting.

In case the two parties reach an agreement, the labor mediator shall make a written record of successful mediation which bears the signatures of the disputing parties and the labor mediator. In case the two parties do not reach an agreement, the labor mediator shall recommend a mediation option for the disputing parties to consider. Where the two parties do not agree with the recommended mediation option or where one of the disputing parties is absent for the second time without a valid reason after having been legitimately summoned, the labor mediator shall make a record of unsuccessful mediation which bears the signatures of the present disputing parties and the labor mediator.

The disputing parties shall be entitled to request the settlement from Labor arbitration councils in the following cases: a disputing party fails to perform the agreements specified in the record of successful mediation; mediation is not mandatory; the labor mediator fails to initiate the mediation by the deadline; the mediation is unsuccessful.

After the Labor arbitration council has been requested to settle a dispute, the parties must not simultaneously request the Court to settle the same dispute.  If within 07 working days from the receipt of the request, an arbitral tribunal is not established; or within 30 working days from the establishment of the arbitral tribunal, it fails to issue a decision on the settlement of the labor dispute, parties shall be entitled to request the settlement from the Court. In case a disputing party fails to comply with the decision of the arbitral tribunal, the parties are entitled to bring the case to Court.

If the client needs any other information or requires for further advice, our lawyers at ANT Lawyers in Vietnam will be available for service.

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How to Resolve Disputes in Employment in Vietnam?

A labor dispute is a dispute over rights, obligations and interests arising between parties in employment relationship. Labor disputes include individual labor disputes between employees and employers, and collective labor disputes between labor collectives and employers. When a labor dispute occurs, the competent agency, organization or individual will settle it on the basis of the measures and principles of labor dispute settlement prescribed in Chapter XIV of the Labor Code 2012.

Methods of dispute settlement in international trade

Measures for resolving labor disputes include: negotiation, grassroots conciliation, settlement of individuals and organizations competent to settle labor disputes.

For individual labor dispute resolution, labor conciliator, People’s Court is an individual or organization competent to resolve disputes. Labor conciliator; Chairman of the district People’s Committee; The People’s Court is competent to resolve collective labor disputes over labor rights and conciliators; The Labor Arbitration Council is competent to settle collective labor disputes about benefits.

Negotiation is a method of resolving a dispute in which the parties to a dispute deal directly with each other in order to reach an agreement on the settlement of the dispute. In fact, this is the most widely used solution. During the negotiation process, the parties will discuss issues related to the dispute, and propose solutions to resolve that dispute. The decision is made on the basis of agreement between the parties themselves and is not the result of any external pressure.

Unlike negotiation, conciliation is a method of resolving disputes involving third parties but not third parties make decisions but only support and guide the parties to negotiate. Under the provisions of Clause 1, Article 201 of the Labor Code 2012, individual labor disputes must go through the conciliation procedure of a labor conciliator before requesting a court to settle them, except for labor disputes on disciplinary measures in the form of dismissal or disputes over the unilateral termination of the labor contract; compensation for damages, benefits when terminating a labor contract; between domestic servants and employers; on social insurance in accordance with the law on social insurance, on health insurance in accordance with the law on health insurance; on compensation for damages between laborers and enterprises and non-business units that send laborers to work abroad under contracts. If the two parties reach an agreement, the labor conciliator shall make a record of successful conciliation. On the contrary, the two parties cannot reach an agreement, and the labor conciliator issues a conciliation plan for the two parties to consider and if the two parties accept the conciliation plan, the labor conciliator shall make a record of successful conciliation. In case the two parties do not accept the conciliation plan or a disputing party has been duly summoned for the second time but still absent without plausible reasons, the labor conciliator shall make a record of unsuccessful conciliation.

Dispute resolution by the Chairman of the district People’s Committee is the method to be applied when there is a request for resolving a collective labor dispute on rights. Chairpersons of district-level People’s Committees shall base themselves on labor laws, collective labor agreements, registered labor rules and legal regulations and agreements to consider and settle labor disputes dynamic.

The Labor Arbitration Council is the competent authority to settle collective labor disputes about benefits. At the meeting of the Labor Arbitration Council, there must be representatives of both parties to the dispute. The Labor Arbitration Council has the responsibility to assist the parties in self-negotiation. In case the two parties reach an agreement or accept the mediation plan, the Labor Arbitration Council shall make a record of successful mediation and issue a decision recognizing the agreement of the parties. In case the two parties fail to reach an agreement or one of the disputing parties has been duly summoned for the second time but still absent without plausible reasons, the Labor Arbitration Council shall make a record of unsuccessful mediation and after within 03 days, the labor collective has the right to carry out the procedures to go on strike.

Trial is a mode of resolving individual labor disputes and collective labor disputes over rights, in which the Court will issue a judgment or decision to resolve the case. The settlement of labor disputes in court is generally the final settlement activity after the dispute has been settled at other stages with no results. The settlement of labor disputes at the Court is done by a judicial body with special state power, proceeding according to the strict procedures and procedures prescribed in the Civil Procedure Code 2015. The greatest advantage of this method of dispute resolution is that the court’s decisions on labor disputes are guaranteed to be enforced by state coercive measures.

Employees as well as the labor collective and employers should pay attention to selecting the most appropriate and optimal resolution solution when labor disputes occur.  It is also suggested to consult with labour lawyers of law firm in Vietnam speacializing in employment matters for efficiency.

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