Resolving labor disputes with foreign elements

1. Concept

According to Article 179 of the 2019 Labor Code, a labor dispute is a dispute over rights, obligations, and interests arising between parties in the process of establishing, implementing, or terminating labor relations; disputes between organizations representing employees; disputes arising from relationships directly related to labor relations. The concept of labor disputes in the 2019 Labor Code has a new point compared to previous Labor Codes, which is the addition of disputes between organizations and disputes directly related to labor relations. However, there are still shortcomings that have not been clarified, the nature of labor disputes has not been pointed out, and the time when disputes arise has not been pointed out.

From that, it can be concluded that a labor dispute with foreign elements is a conflict of rights, obligations and interests arising between parties in a labor relationship in which at least one party is a foreigner or is directly related to the labor relationship with foreign elements, and is requested to be resolved by one of the parties.

2. Methods of resolving labor disputes

Currently, methods of resolving labor disputes include: Negotiation; Mediation; Arbitration and People's Court.

Negotiation is a method of dispute resolution through the parties in dispute meeting directly to resolve the dispute. This is the most common method of dispute resolution, the first choice when the parties have conflicts and disagreements.

The results of negotiation can be in two directions: Successful dispute resolution thanks to the goodwill of the parties, saving time and money, simplifying procedures and order; or the conflicting parties cannot agree and choose other methods of resolution such as conciliators, labor arbitrators or courts. In essence, negotiation is self-resolution of conflicts, which helps to improve the implementation of negotiation results. However, negotiation is not a mandatory procedure but is only recognized by law as a method of resolving labor disputes. For labor disputes with foreign elements, negotiation is a method of expressing goodwill between the parties, helping to maintain relationships, with the purpose of understanding each other's needs in resolving conflicts. However, the differences in nationality and law have greatly affected the goodwill of the parties in labor disputes with foreign elements because negotiations have no rules or procedures, which can easily lead to disagreements if one party advances its interests. In addition, negotiations also do not have a mechanism to ensure enforcement if one of the parties does not voluntarily comply, which is a huge risk for the parties, especially in labor disputes with foreign elements, such as disputes between foreign workers demanding overtime pay benefits with a Vietnamese company, but the company only agrees but does not fulfill its obligations.

Other methods of resolution are more specifically regulated in the 2019 Labor Code. Articles 187 and 191 stipulate that the agencies, organizations and individuals with the authority to resolve labor disputes include: Labor mediators; Labor arbitration council; People's Court (not resolving collective labor disputes over interests).

Conciliation is a quick resolution mechanism, not costly in time or money, but only has the nature of a third party intervening to give advice and solutions, the outcome of the dispute still mainly depends on the parties. Conciliation is a combined method in resolving labor disputes carried out at labor jurisdiction agencies with the participation of many different entities such as the Court, arbitration, is a step, a procedure in the order of resolving labor disputes. Labor disputes can end right at the conciliation step if the parties reach a settlement, if not, the parties have the right to file a lawsuit in Court or agree to send a request to resolve the dispute to the Labor Arbitration Council (HĐTTTLĐ).

The mechanism of the Labor Arbitration Council is through a Labor Arbitration Board consisting of 03 Arbitrators, in which each disputing party selects 01 Arbitrator from the list of arbitrators, these 02 Arbitrators unanimously select 01 other Arbitrator as Head of the Arbitration Board. Compared to the provisions of the 2012 Labor Code, operating with 03 Arbitrators selected by the parties contributes to simplifying the handling apparatus, quickly resolving labor disputes, and at the same time not causing overlapping jurisdiction. This shows that the State is encouraging the parties to choose to resolve labor disputes first through mediation, if mediation fails, they choose the Labor Arbitration Board, and should not bring the dispute to court.

Due to the advantages of the Labor Arbitration Council such as quick procedures, the principle of non-public adjudication helps to keep information confidential, the Arbitrators chosen by the parties represent the will of the parties, not on behalf of the State power, it is very suitable to resolve disputes with foreign elements. A disputing party is a foreign individual or legal entity when choosing to resolve the dispute by the Labor Arbitration Council in Vietnam, can rely on their will to choose 01 Arbitrator to directly participate and adjudicate, ensuring their legitimate rights and interests. The limitation when choosing the Labor Arbitration Council is that the parties cannot simultaneously choose the Court to resolve the dispute, the decision of the Labor Arbitration Council is final, so when a decision is made unfavorable to one party, this party cannot appeal or request a retrial, the enforcement of the judgment also depends on the voluntariness of the parties.

Finally, the method of settlement at court, the State authority is strictly regulated on procedures and order, so this is the most time-consuming method among the four methods of resolving labor disputes. Another disadvantage for the parties is that the principle of public trial of the Court is not suitable for businesses, can reduce reputation or reveal confidential information, two levels of trial make the time to follow the case longer, affecting the production, business and normal operations of the business.

However, in return, settlement through the Court is the method that ensures the most accuracy, fairness, and objectivity according to the law; enforcement is guaranteed with strict sanctions; costs are lower than the Labor Arbitration Contract, suitable for individuals and organizations that do not have financial capacity. For labor disputes with foreign elements, the judgment with a decision requiring international recognition is the biggest obstacle, depending on the bilateral agreement or the general principles of international law. Although the national judge may be objective, when adjudicating, the applicable law is still the law of their country, which can cause conflicts with the law of the other country and create unfairness.

Therefore, it can be concluded that the most suitable method of resolving labor disputes with foreign elements is the Labor Arbitration Council. If in the negotiation and conciliation method, the result of the process depends on the will of the disputing parties, then in the arbitration method, in addition to being flexible according to the requests and conditions of the parties, the arbitrator also has the right to make a final decision (depending on the laws of each country) on the case, requiring the parties to comply with the judgment. The Labor Arbitration Council does not act on behalf of the State authority to adjudicate, but on behalf of the disputing parties through the mechanism of selecting Arbitrators.