Implementing Policy Impact Assessment (PIA) in the Revision of the Labor Code

[12 November 2018] —  The Government of Vietnam is in the process of revising the Labour Code 2012. Economica Vietnam have been entrusted to conduct the policy impact assessment in an effort to contribute to the formulation of policies to promote gender equality in the context of revision of Vietnam Labour Code. The policy impact assessment is part of the on-going support by DFAT, via Investing in Woman initiative, to MOLISA to promote gender equality at work in Vietnam. The policy impact assessment (PIA) is implemented as part of the law making process of the revised Labor Code and as required by the Law on Promulgation of Legal Document and Normative Documents.

The Labour Code was promulgated on June 23, 1994 and entered into force from January 01, 1995. It was amended four times in 2002, 2006, 2007 and 2012. Due to the revision of the Constitution in 2013 and related laws and requirements of international trade integration, international treaties to which Vietnam is a member and the socio-economic development of Vietnam in recent years, it is necessary to further improve the Labour Code including: (a) There are many obstacles and shortcomings resulting from the Labour Code application in practice over 3 years of implementation; (b) Institutionalising provisions of the 2013 Constitution and ensuring consistency of the legal system; and (c) Adapting international labour standards into domestic laws in line with socio-economic development level to implement international economic integration process of Viet Nam. Gender issues identified and mainstreamed in the Labour Code 2012 basically expressed the gender equality principle regarding protecting lawful rights and interests of male and female workers in simultaneously performing reproductive and child-rearing functions.

Beside advantages, there are some issues should be improved such as a relatively big retirement age gap between genders. Moreover, the fact that the Labour Code contains numerous more favourable provisions for female rather than male employees results in enterprises’ restricted employing of female employees since implementing policies on female employees raises their cost. Regulations on organising day care facilities and kindergartens for workers’ children and on supporting childcare expenses have not been implemented effectively and appropriately. There are also provisions limiting the right to work of female employees despite their purpose of protecting reproductive health. Some definitions in the Labour Code 2012 such as sexual harassment are not clear enough to guarantee the feasibility in practice.

In implementing the policy impact assessment (PIA), Economica Vietnam has been working in close cooperation with the Ministry Labor and Social Affairs (MOLISA). The PIA process has been implemented side by side with the law drafting process in order to improve the quality of the draft. In addition to the assessment, a series of technical workshops and a major public consultation workshop were held to support the public debate on the policies and the result of the PIA. Economica Vietnam contributed significantly to the organization of these workshops.  The most recent public consultation workshop was held in October 2018, with focus on the following policies issues:

  • Issue 1 – Currently, the post-retirement time that employees can work is significantly long. The experienced and high quality human resource has not been best mobilised to support the socio-economic development process.
  • Issue 2 - Equal rights of male and female workers in performing reproductive and child-rearing functions in accordance with gender characteristics (Article 159 LC 2012), including employees’ discretion  to do or to choose work that affect reproductive and child-caring functions (Article 160) have not been fully established in the Labour Code 2012.
  • Issue 3 - Provisions on the responsibilities of the employer and the State in organising day care facilities and kindergartens and support for childcare costs for employees (Article 153, Clauses 4 and 6, Article 154, Clause 4 of the Labour Code 2012) are not reasonable with low feasibility. Employers’ rights and interests when implementing measures to ensure and promote gender equality in labour have not been fully accounted. Administrative procedures to enjoy the State's preferential policies are complicated, not flexible and not suitable with the actual conditions of the employees and employers.
  • Issue 4 - Regulations on sexual harassment in the Labour Code 2012 are unclear and not sufficient to create provide a legal basis for preventing sexual harassment in the workplace to ensure a safe and sound working environment.

In the coming months, Economica Vietnam will step up the efforts to finalize the policy impact assessment and support MOLISA and different stakeholders in feeding it into the revision of the Labor Code. In addition, efforts will also be made in order to encourage the public consultation on the draft law, and with focus on gender equality issues addressed by the draft law. The work will continue until the Civil Code is submitted to the National Assembly for debate and adoption.

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