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Vietnam’s New Labor Code Legally Defines Sexual Harassment For the First Time

For the first time, a clear definition of sexual harassment has been introduced in Vietnam’s labor code, which was implemented earlier this year.

The guidelines, updated for the first time since 2012, govern an industry that has grown substantially over those years, ranking now as the world’s third-largest garment industry and employing more than 2.5 million workers, more than 80 percent of whom are women.

Since the last update, Vietnam’s garment industry has more than doubled, from $17.2 billion exports in 2012 to $35.06 billion in 2020. This is approximately 10.3 percent of Vietnam’s $343 billion GDP last year.

Noting the importance of the new code, and its “numerous changes and improvements,” Nguyen Hong Ha, program manager, Better Work Vietnam, told Sourcing Journal that the implementation is key to making much-needed progress in the system.

“If you talk about addressing sexual harassment, it is not new,” she said. “But for the first time, the labor code has strengthened the protection against gender discrimination and sexual harassment at work. Sexual harassment has been legally defined for the first time and employers are under obligation to provide internal regulations and solutions to prevent sexual harassment at the workplace.

“In the past, there was no concrete definition and it was difficult to define what kind of behavior was viewed as harassment,” she continued. “Employers are now required to ensure equal pay without discrimination of sex and provide maternity leave. That is very important in the garment sector, with a majority of women workers, many of them between 18 and 35 years of age.”

Active in nine countries, Better Work is a unique partnership between the International Labour Organisation and the International Finance Corporation bringing together all levels of the garment industry.

“Women have different channels to raise their concerns or report the issues but often they feel intimidated or ashamed to bring up the cases, and in the past  sexual harassment was not well defined so it was very difficult to develop a case. It is an important law with many benefits for both employers and workers. But these benefits will only become a reality when all are aware of their rights…so that is the change that happens between the law, and the enforcement and practice of the law,” she said.

The new labor code has given workers an additional power—to decide wages through dialogue and negotiation. While the role of the state is still clear—to set the minimum wages—employers are now no longer required to just register their salary scales with the authorities but rather can consult with worker representatives and negotiate.

“In the past, salary was very much linked to seniority but now it will give room to workers and trade unions to negotiate with the employers for wage increases linked to productivity. It is more like a win-win situation,” said Ha, noting the caveat that the workers need to be aware of their rights to negotiate salaries.

The new structure also creates an improved legal framework and brings Vietnam’s legislation closer to international standards.

Other factors still must be taken into consideration, said Greg Fleming, who has been working in Vietnam for the past 10 years as a production sourcing professional. “What was important was to be able to pay labor a living wage. I also have a critique on overtime. I don’t think ILO should come in and say you can’t work overtime.”

He added that while most multinationals are good about handling labor issues, Vietnamese factories had other complexities. “The government is not cracking down on them hard enough on paying ILO wages, on social and health insurance,” he said.

Many NGOs, however, are pleased.

Annabel Meurs, Vietnam country manager for Fair Wear Foundation, told Sourcing Journal that the labor code update addressed the “majority of our recommendations.”

“Among the revisions, the most notable one is allowing workers to establish independent unions at the factory level and providing protection for trade unionists,” she said. These are positive developments towards more representative and strong trade unions, which are key building blocks for more effective collective bargaining and social dialogue in Vietnam. This will contribute greatly to the development of the Vietnamese economy and society.”

She cautioned the need for specific steps and mechanisms to make sure that workers can exercise these rights in practice.

“It also means that brands have an important role to play in supporting Vietnam in this transition by implementing responsible purchasing practices and working together with their suppliers to protect workers’ rights,” she said.

Other important changes in the labor code allow workers to choose a worker representative union, which does not necessarily need to be affiliated with the Vietnam General Confederation of Labor (VGCL), previously the only trade union organization.

What’s more, the changes protect workers against interference, with a clear obligation to avoid acts of anti-union discrimination and hindering the functioning and activities of workers in representative organizations before and after registration. Plus, the retirement age for both men and women will go up, from 60 years and 3 months for men, and 55 years and 4 months for women to 62 years for men by 2028 and 60 years for women by 2035. This will be with an incremental increase of a few months each year, three months for men, and four months for women.