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Vietnam’s Labour Code Reform: Why it matters for gender equality

Stories /24 June 2019

Vietnam makes headway in efforts to close gender gaps as it finalizes a revamp of its Labour Code. Last amended in 2012, the Code is being revised to better deal with modern challenges involving the workplace and ensure that Vietnam complies with international agreements and conventions regarding labour standards, not to mention free trade agreement provisions on the world of work. And at the heart of debates is the need for pro-gender reforms.

As Vietnam sets it sights on the workplace of the future, stakeholders realize the importance of developing the full potential of men and women in the economy. A comprehensive assessment of the Code reveals that much must be done to remove discriminatory provisions perpetuating —directly or indirectly—gender inequality and limiting women’s economic participation.

The Labour Code revision provides an opportunity for Vietnam to create a more competitive economy and deliver decent work and growth. On 29 May 2019, the draft text was tabled in the National Assembly, for possible adoption in 2020 and entry into force on 1 January 2021. How will pro-gender reforms build an enabling environment for a modern and transformative world of work in Vietnam?

Promoting gender equality in the Labour Code

About 79% of Vietnamese women aged 15 or above are working or searching for work, one of the highest rates globally.1 Despite rising levels of skills and productivity, Vietnamese female workers are more likely to be in junior roles or in vulnerable work because of gender barriers that limit their opportunities.  Despite legislative improvements like the 2013 Constitution, they still face gender discrimination in employment opportunities, job growth and unpaid care work, among others.

Vietnam has domestic and international legal commitments towards gender equality at work. Significant achievements have been made to fulfill these obligations, but strategic targets have not been met because of traditional gender norms that disadvantage women over men.

Vietnam’s Ministry of Labour, Invalids and Social Affairs (MOLISA), is working with the Australian Government, through the Investing in Women initiative and with UN Women, to advance gender reforms in the Labour Code. A gender analysis of the Code shows, several provisions reinforce traditional caregiving roles for women, prohibits women from entering and thriving in specific jobs, and hinders their career growth.

Vietnam's Labour Code Reform

What has been done so far?

 Working with MOLISA, Investing in Women provided specialised advice and recommendations on how to remove gender discrimination from the labour code. The recommendations focus on changing five key areas and removing discriminatory measures to advance women at work:

  • Equal pay between men and women for work of equal value

A Labour Force Survey in Vietnam reveals that for a job requiring the same qualifications, the average pay for female workers is 10.7% lower than that of their male colleagues.2 This gap is higher among high-skilled worker groups. The compensation of unskilled female workers is 8.1% lower than that of their male colleagues, but the gap increases to 19.7% for workers having a bachelor’s or higher degree.3       

To ensure that men and women are compensated equally for their work, the draft Labour Code maintains the payment of equal wages for work of equal value, but does not broaden the definition of remuneration to specifically include all payment whether in cash or kind and other emoluments like bonuses, holiday entitlements, or stock options. The draft misses the chance to specify how to assist employers measure if work done by women is of equal value to work done by men, for example, by including criteria on professional responsibilities, quality of labour, equal working conditions, and the level of work supervision, among others.

  • The ban on women working in certain areas of employment

In Vietnam, women are currently denied access to 77 jobs—38 of which are prohibited on the basis of sex, and 39 types of jobs are prohibited for pregnant women and women with children under 12 months.4 These provisions perpetuate the outdated stereotyping of women as physically weaker than men. Prohibited jobs include occupations that are heavy and hazardous such as in construction, mining, and fisheries. But in other countries in Asia, women take on these jobs, and if they are so dangerous no worker, male or female, should be doing them. Without access to all jobs, Vietnamese women lose out on opportunities to upgrade their skills in the face of technological change.

The draft Labour Code removes this list from the statutory provisions, following IW advice; it rather proposes that the lead Ministry may issue a list of dangerous jobs prohibited for both sexes. It also seeks to remove gender-based discrimination by giving female workers the right to choose what job is fit for them, and ensuring workplaces are made safe for both men and women.

  • Provisions against sexual harassment and gender-based violence

Statistics show that majority of victims of sexual harassment at work in Vietnam are women, at approximately 80 per cent.A report also shows that in the textile and garment sector, almost all sexual harassment cases have not been formally reported and victims remain silent for fear of the consequences of speaking out about the incidents.6 Reducing sexual harassment will improve retention and productivity of all women workers. Several provisions of the 2012 Code seek to address the issue, but it is difficult to effectively enforce the law because of vague definitions of sexual harassment and lack of clear procedures preventing it at work.

The draft Labour Code introduces a much-needed general legal definition of ‘sexual harassment at work,’ but omits to specify that hostile work environments are part of sexual harassment. It also calls for specific regulations that could cover prevention and handling of cases of sexual harassment at work, and help and support victims in filing complaints.

  • Provisions for paternity leave and workplace childcare

Currently, only women workers in Vietnam are entitled to paid parental leave to care for sick children under 7 years old.7 This provision perpetuates gender stereotypes about women as primary caregivers. Men also have the same capacity to care for children and the home, and should be allowed to take paid parental leave, too. An Investing in Women’s survey of urban millennials in Vietnam, Indonesia, and the Philippines found that women and men would like fathers to have more time with their children. Over 90% of people in Vietnam and the Philippines would also like more paternity leave than legislation offers.8 Improving the Labour Code would also align it with benefits available under other domestic legislation, like the Social Insurance Law.

The draft Labour Code now entitles male employees to paid paternity leave, in accordance with IW’s recommendations.

  • Unequal retirement ages between men and women

In Vietnam, women currently have to retire five years earlier than men—55 years of age for women and 60 years of age for men.9 This provision limits women’s access to skills development and promotional opportunities over time. The age ceiling on training is 45 years for women and 50 years for men.10 Added to child-bearing and rearing breaks for women, this makes it difficult for Vietnamese women to be competitive for senior posts against men and limits their contributions to social security. In Vietnam, the average life expectancy at birth for women is 81 years, compared to 72 years for men.11 This means that on average Vietnamese women can expect to have 14 years more in retirement than men, but have more limited opportunities to save for retirement due to the shorter period in work. Unequal retirement ages imply that work after 55 will be falling into informal economy work and continuing child care roles as grandmothers minding their grandchildren.

Narrowing the retirement age gap will enable women to have more years to accumulate savings and raise their level of pension contributions overall. Women’s contributions will also help balance the Social Insurance Fund in the long run. A World Bank study shows, if both men and women in Vietnam could retire at 62, there would be 1.89% GDP growth year on year.

The draft Labour Code tabled in May proposes to narrow the gap by extending the retirement age for certain occupations in a gradual implementation roadmap. Two options are being considered. The first option proposes that from 1 January 2021 onwards, the retirement age will be increased for every single year by 3 months for men and 4 months for women until it reaches full 62 years of age for men and 60 years of age for women. The second option recommends that from 1 January 2021 onwards, the retirement age be increased for every single year by 4 months for men and 6 months for women until it reaches full 62 years of age for men and 60 years of age for women.

Promoting gender equality to propel Vietnam’s economic growth

Stakeholders are monitoring the progress of Labour Code amendments, which are set to be discussed a second time in October 2019, and possibly at a third National Assembly session on 2020 for adoption. Introducing reforms that advance gender equality empowers Vietnam to cope with the changing demands of the workplace. As young women enter the Vietnamese Labour market, the country is taking an opportunity to spur innovation by investing in women’s skills and career development.

By enabling men and women to balance their responsibilities at home and at work, businesses in Vietnam save costs and increase gains for the economy in the long run. Revising the Labour Code is an important first step towards building a world of work where male and female workers in Vietnam can equally thrive and succeed. This comes as Vietnam is set to enter into new Free Trade Agreements that include the Comprehensive and Progressive Agreement for Trans-Pacific Partnership (CP-TPP) and the EU-Vietnam Free Trade Agreement (EVFTA). By effectively enforcing gender equality, Vietnam moves a step closer to reaching economic productivity and competitive advancement and becoming a regional leader.

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References:

1 International Labour Organization, ILOSTAT database. Data retrieved in April 2019. “Labor force participation rate, female (% of female population ages 15-64) (modeled ILO estimate).” https://data.worldbank.org/indicator/SL.TLF.ACTI.FE.ZS?locations=V

2, 3 General Statistics Office of Vietnam, 2016. Survey report on labour and jobs. http://www.quanhelaodong.com/archives/2186?lang=vi

4 Article 160 of Vietnam’s 2012 Labour Code. Circular 26/2013/TT-BLDTBXH, dated 18 October 2013.

5 Bringing sexual harassment into the Law: Still Vague. http://duthaoonline.quochoi.vn/DuThao/Lists/TT_TINLAPPHAP/View_Detail.aspx?ItemID=935

6 Better Work Vietnam Annual Report 2017: An Industry and Compliance Review Vietnam. https://betterwork.org/blog/portfolio/better-work-vietnam-annual-report-2017/

7 Article 157, 158 of Vietnam’s 2012 Labour Code. No. 10/2012/QH13 dated 1 May 2013

8 Investing in Women (2018). Social norms, attitudes, and practice: Normalising men’s role at home.

9 Article 187 of Vietnam’s 2012 Labour Code No. 10/2012/QH13 dated 1 May 2013

10 ILO, 2018. “Labouring Under False Assumptions: Exploring the Rifts Between International Standards and Cultural Values in Vietnam’s Labour Code Reform.” https://www.ilo.org/wcmsp5/groups/public/—dgreports/—dcomm/documents/publication/wcms_618449.pdf

11  United Nations Population Division. World Population Prospects: 2017 Revision. “Life expectancy at birth, female (years).” https://data.worldbank.org/indicator/SP.DYN.LE00.FE.IN

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