Digital Transformation and Labour Relations in Vietnam: An SEM Analysis for Evidence-Based Legal Reform

Abstract

Background: Digital transformation is an inevitable trend within the corporate sector, exerting a substantial impact on both employees and employers. In Vietnam, the digital revolution significantly influences labour relations, presenting a dual landscape of enhanced productivity alongside heightened inequality, workforce fragmentation, and emerging legal complexities.

Objective: This paper examines the effects of digital transformation on labour relations in Vietnam, specifically identifying principal challenges and proposing directions for legal reform. Furthermore, the study offers policy implications to safeguard workers' rights in the current digital context.

Methodology: The research employs quantitative methods, specifically Structural Equation Modelling (SEM), to analyse data from 657 valid responses from employees across 657 small and medium enterprises. It examines the relationship between digital transformation and five dimensions of labour relations: subjects of labour relations, work objects, means and methods of work, content and conditions of work, and legal regulations and management mechanisms.

Results: The findings indicate that digital transformation has a robust, statistically significant impact across all five dimensions. Notably, the majority of workers recognise the need to adapt to digital shifts and have taken proactive measures. The most significant influence observed is the profound alteration in the roles of employers, employees, and digital platforms.

Conclusion: This study confirms that digital transformation is fundamentally altering the frameworks of employment, work organisation, and labour governance. Consequently, the article advocates a multi-tiered policy framework, beginning with the legal recognition of digital workers, followed by skill development, regulation of digital labour, and modernisation of social protection.

Unique Contribution: The unique contribution of this study lies in its empirical quantification of the legal and social impacts of digital transformation on labour relations, moving beyond a sole focus on infrastructure or firm competitiveness. It provides evidence-based insights to support concrete labour law reform, rather than relying on purely theoretical discussions of the digital divide.

Key Recommendation: Based on the empirical evidence, the study proposes a set of policy recommendations emphasising the need to redefine labour relation subjects, enhance digital skills, regulate algorithmic management and remote work, and develop technology-neutral legal frameworks.