2007 Annual Survey of violations of trade union rights - Vietnam

Population: 83,600,000
Capital: Hanoi
ILO Core Conventions Ratified: 29 – 100 – 111 – 138 – 182

The single national trade union centre, the Vietnam General Confederation of Labour (VGCL), remains firmly controlled by the Communist Party of Vietnam. In November, the National Assembly passed amendments to the labour law that come into force in July 2007 and will more strictly regulate strikes. During 2006, over 200 strikes were tolerated even though all were technically illegal.

Trade union rights in law

Freedom of association – political control of unions: Workers are not free to organise or join unions of their choosing. Any union formed must be approved by and affiliate with the VGCL, and operate under its umbrella.

According to the Labour Law, a union must be formed within six months of the establishment of any new enterprise with ten employees or more. The employer is made responsible for "facilitating the early establishment" of the union. Once the union is legally formed, the law further requires the employer to recognise the union, and to "cooperate closely with the trade union ... and create favourable conditions for it to carry out its activities." However, officials of the Ministry of Labour, Invalids and Social Affairs (MOLISA) publicly admitted on numerous occasions during the year that many enterprises, particularly those owned by foreign investors, have no union presence.

According to the Trade Union Law, individual unions are only able to affiliate with, join, or participate in international labour bodies "in conformity with their activity objectives." Those "objectives" are determined by the national VGCL, giving it effective power to prevent international contacts or affiliations of which it does not approve.

Amendments to the Labour Law that will take effect on 1 July 2007 open up the possibility for legal worker actions to be taken outside the parameters of the VGCL. The law will state that in non-unionised enterprises, "a strike must be organised and led by representatives nominated by workers". The names of those workers representatives must be sent to the VGCL.

Acts of anti-union discrimination are prohibited by the Labour Code. An employer must receive permission from the union or higher level VGCL body before terminating any member of the union's executive committee.

Further restrictions on the right to strike: The July 2007 amendments to the Labour Law will significantly change legal procedures for strikes in Vietnam. Disputes will be divided into disputes over rights (compliance with the law) and disputes over interests (demands beyond what the law provides), setting out different procedures for both. The law sets out an extensive process of mediation and arbitration that must be followed before a strike can legally take place.

Strikes are illegal if their origin does not arise from a collective labour dispute, or if they concern issues that are outside of labour relations.

Sectoral/industrial strikes are effectively banned by a new provision of the law which states that any strike that involves more than one enterprise is illegal.

Thresholds for workers to approve a decision to strike are excessive. The new sections of law state that at least 50 per cent of the workers in an enterprise with less than 300 workers must vote for the strike. For enterprises with 300 workers or more, the requirement increases to 75 per cent.

New provisions in the law open a potential loophole for employers and government to influence workers' decisions through creative use of a "work stoppage allowance", to be paid to workers who do not take part in the strike but are prevented from working because of it. Striking workers are not entitled to pay and benefits.

Employers have the right to challenge the legality of a strike by appealing to the Labour Court If a strike is ruled illegal, the new provisions of the law hold that the workers' organisation and individuals responsible for the strike are liable for compensation to the employer for "losses and damages." Employer challenges to the legality of a strike can be filed as long as three months after a strike is finished, raising concerns about retaliatory challenges to successful strikes.

Strikes are prohibited in public services, in state-owned enterprises and those considered by the government to be important to the national economy and defence. The definition is broad, covering a total of 54 sectors, including railway, maritime and air transportation, banks, post and telecommunications, electricity production and the oil and gas industries. The Prime Minister has the right to suspend a strike considered detrimental to the national economy or public security.

In strikes which are deemed legal, provisions in the newly adopted amendments to the Labour Law provide protection to workers by specifically forbidding "terminating individual labour contract, imposing labour discipline or transferring the workers to other jobs or other locations" because of those workers' involvement in a strike. The law also prohibits employers from taking "revenge" against workers who supported or lead strikes or engaging in a "unilateral suspension of business of operations in order to resist a strike."

Collective bargaining: VGCL affiliated unions have the right to bargain collectively on behalf of all workers in an enterprise, but have frequently failed to effectively exercise this right. Few enterprises have collective bargaining agreements. The VGCL's ability to effectively bargain with management is handicapped by the fact that at many enterprises, VGCL representatives are also the firm's human resources officials.

Export processing zones (EPZs): Vietnam's EPZs are covered by the same laws as the rest of the country.

Exclusion of micro-enterprises from trade union coverage: The law excludes businesses with less than 10 employees from the labour code's requirements on unionisation.

Trade union rights in practice

Workers see official union as irrelevant: The VGCL is proving slow to adapt to the market economy and the changing climate that it brings. It describes itself as the bridge between employer and worker, rather than the defender of workers' rights. Credibility of the VGCL among workers in both the north and south of the country is quite low, and many workers believe that the leadership is unable to represent their concerns successfully. A survey conducted by the Ministry of Labour in 2003 found 33 per cent of workers thought the VGCL played "no role" whatsoever in their workplaces. Another 36 per cent thought all the union did was disseminate information. VGCL leaders in private sector enterprises tend to be heavily drawn from the ranks of management.

Hand in glove with the Communist Party: At the 9th VGCL Congress in October 2003 the top Communist Party leaders present urged the trade unions to continue to disseminate the government's policies to workers and encourage their creativity and production output. In April 2006, at the 10th National Congress of the Communist Party of Vietnam, VGCL Chairwoman Chu Thi Hau stated in her major address that "The Party should continue to renew its leadership style towards the VGCL."

Strike action tolerated: Despite the restrictions on strike action, many strikes do take place without all the procedures respected, and are tolerated by the authorities. A total of 201 strikes took place between December 2005 and March 2006.Most concerned pay disputes.

Virtually all observers stated that the strikes began without prior consultation with the VGCL or its local unions, and most continued without the union's leadership.

The strike actions had an effect, as the government approved an approximately 40 per cent hike in the minimum wage for workers at foreign-owned enterprises, effective on 1 February 2006.

Foreign investors interfere, seek Government restraint of strikes: The European Chamber of Commerce (ECC) wrote in January to the Vietnamese Prime Minister to advocate the government take action to restrain the strikes. Implicitly threatening that foreign investment could be adversely affected, the ECC told the Prime Minister that one of Vietnam's attractions as an investment destination was "the fact that the workforce is not prone to industrial action". He also protested that the businesses affected were not consulted before the government unilaterally raised the minimum wage, as did the American Chamber of Commerce, senior officials in the Ministry of Foreign Affairs in Taiwan and the Japan Business Federation Chairman.

Export processing zones: With a few notable exceptions, employers in the zones tend to ignore workers' rights. Only about ten per cent of workers have long-term employment contracts. The remainder are on "definite term" contracts of between one to three years, or seasonal contracts of one year's duration which are not legally permitted for a job which is "regular". Both types of contracts help employers avoid the legal requirement to set up a union in enterprises with ten employees or more. The management boards of the EPZs have labour offices, which have become increasingly involved in dispute resolution as wild-cat strikes become more prevalent.