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The elephant in the room

When Vietnam's first Code of Conduct on Sexual Harassment in the Workplace was introduced a few years ago, an online newspaper did a mini survey, asking its readers if they had experienced sexual harassment in their workplace. The result was shocking: 52% of 8,558 respondents said yes.   

In a 2010 GSO study of sexual harassment, one-third of the women surveyed reported that violence interrupted their work: 16 percent reported that they could not concentrate on their work, 6.6 percent reported that they were unable to work due to sickness, and 7 percent reported that they had lost self-confidence. Women in lower-paying jobs are more likely to experience violence. 

Another survey by ActionAid in 2014 revealed that “all women and girls, regardless of their occupations, experience sexual harassment between two and five times in their lifetimes”.

It may be obvious to many that employees suffering from harassment and violence experience stress, depression, and even suicidal thoughts. Yet, most have not paid attention to the economic costs incurred by both employees, employers and business owners.

The hidden economic costs

All forms of violence against women cost the Vietnamese economy an estimated US$2.1 billion or 1.78 percent of GDP in 2012. Specific evidence on the productivity costs of sexual harassment and GBV in the workplace in Vietnam is not available, but for comparison, CARE International found that sexual harassment in the Cambodian garment industry costs the industry approximately US$89 million per annum or about 0.5 percent of GDP. 

Companies that tolerate sexual harassment and verbal or physical abuse face lower profits due to higher employee turnover and reduced productivity. Research by A Better Work shows that in Vietnam, workers who are verbally abused require almost one additional hour per day to reach the same production target than those with similar education, training and experience who are not verbally abused. 

Furthermore, women who experience harassment, abuseor violence in the workplace (or at home from a domestic partner) leave their jobs in high levels. This imposes turnover costs on employers in terms of recruiting and training new workers. 

Those women who do not quit are likely to be absent from work more frequently, although this is not an option for many women who rely on wages for their livelihood. For example, when being asked how she would feel if her male supervisor touched her without permission during work, a toy factory worker in an industrial park in the outskirts of Hanoireplied without hesitation, "Of course, I'd feel very disturbed and unsafe during work.”

Third, and most significantly, harassed and abused workers who do try to come to work are far less productive. Many become poor performers and may face dismissal linked to this under-performance. 

In CARE’s study in Cambodia, 13.5 percent of workers stated their productivity was significantly affected by sexual harassment, with that group estimating that they were able to work on average 47 percent less effectively. These costs are generated by sexual harassment both inside and outside the workplace, including travel to work.  

Consequently, reduced sexual harassment in the workplace will improve retention and productivity of the whole work force. This applies as well to women who have not directly experienced violence and sexual harassment but have witnessed it or are afraid of it. 

When harassment and violence are reduced, it will also save costs to businesses from resulting medical and legal expenses and turnover. The reputational consequences of a sexual harassment scandal can significantly affect a company’s public image and sales.  

The revised Labour Code: Opportunities for reducing sexual harassment and violence in the work place

The good news is that not all employers are ignorant of the problem that sexual harassment may cause to their business. For example, Ms. Vu Thanh Thuy, CEO of Mido Trade Company Limited in Ninh Binh province, mentioned that her company had ensured that no gender-based discrimination and no sexual harassment would occur in the company, and that there would be no gender pay gap. 

Promoting gender equality in the workplace, including effectively preventing sexual harassment, in her words, are the company's "passport" to the global value chain. "Thanks to such practices, we have successfully retained old clients while expanding our business to new clients," said Ms. Thuy. 

It is self-evident that companies that promote friendly and safe workplaces free from harassment and violence create higher levels of satisfaction for employees of all genders alike. Healthier working environments lead directly to cost savings through reduced employee turnover and absenteeism. Reputational gains, like being “an employer of choice”, bring more customers and open doors to contracts, indirectly making larger returns possible. 

Vietnam’s 2012 Labour Code stipulates that sexual harassment is prohibited in the workplace. 

There are also accompanying regulations which, among other things, give employees who are victims of sexual harassment the right to unilaterally terminate their labour contract. 

Yet, almost seven years have passed and the legislation related to sexual harassment in the workplace is quite general in nature, which makes it difficult to apply in practice. It lacks details on complaint mechanisms and penalties. 

As the Vietnam Chamber of Commerce and Industry (VCCI) has highlighted, the current legal framework “lacks definitions and specific indicators to determine what type of behavior constitutes sexual harassment. In practice, it is therefore difficult to prevent and address sexual harassment and cope with violations.” 

That is why Vietnamese legislators, businesspeople and employees alike should seize the opportunity from the ongoing revision of the Labour Code, together with a global movement towards a new convention of the International Labour Organization, to end violence and harassment in the world of work, and to reduce sexual harassment and violence in the workplace, thus improving Vietnam’s competitiveness in the global market. And at the end of the day, it’s not just about the economic dimension; it’s also about social responsibility and the fundamental human right that everyone should live free from violence.

Le Kim Dung, Country Director, CARE International in Vietnam