5.1 Legislation in brief
The establishment, rights and obligations of trade unions are provided for under the Constitution of Vietnam. The establishment and operation of trade unions is governed by the Labour Code and the Law on Trade Unions. The organisational structure and operation of union units are also governed by the Charter of Trade Unions of Vietnam.
5.2 Role of trade unions and collective agreements
The Labour Federation of Vietnam is the central and national organisation of trade unions in Vietnam. The Federation represents the rights and interests of workers, and participates in the State’s management and formulation of laws and policies.
Under the Labour Federation are various trade union organisations at the industry and provincial levels, which are in turn made up of the ‘Grassroots Trade Union’ units in various enterprises or organisations.
Any 5 or more workers in an enterprise may voluntarily form a Grassroots Trade Union unit. The role of such trade union units includes:
- being consulted in relation to the formulation of internal work rules by the employer;
- proposing, negotiating and signing a collective labour agreement with the employer;
- working with the employer to manage and distribute statutory welfare funds;
- being consulted in relation to decisions by the employer eg in relation to wage scales, bonus payments, unilateral terminations and disciplinary action;
- monitoring and supervising the employer’s observance of employment laws, including initiating legal action against the employer; and
- participating in the settlement of labour disputes.
The making of collective labour agreements is encouraged by the State. A collective labour agreement will become the primary source of an employee’s terms and conditions of employment, overriding the terms of any individual employment contract or internal work rules to the extent of the inconsistency.
5.3 Industrial action and disputes
Amendments to the Labour Code relating to the settlement of labour disputes came into force on 1 July 2007, and were designed to more clearly regulate:
- the processes and competent authority for the settlement of labour disputes; and
- the taking of strike action in connection with such disputes.
Strikes have been fairly prevalent in Vietnam in recent years, and most have occurred in connection with foreign invested enterprises. The new provisions have generally been welcomed by such employers as they are clearly intended to reduce the incentive to strike and formalise the principle that the workforce should only participate in strikes as a last resort.
The amendments distinguish between the following categories of dispute and specify a different resolution process for each:
- ‘Individual labour disputes’: These are normally to be dealt with by the enterprise reconciliation council or labour conciliator, before determination by the relevant court, if they remained unresolved. Strikes are not permitted in connection with individual disputes.
- ‘Collective labour disputes about employees’ rights’ ie, disputes over the application of relevant laws, rules, agreements etc.: These must be referred firstly to the enterprise reconciliation council or labour conciliator, secondly to the Chairman of the district people’s committee and finally, if unresolved, to the People’s Court for determination. Alternatively, the workforce may lawfully strike at this final stage. It is expected that this process will result in many ‘rights disputes’ being resolved without recourse to strikes.
- ‘Collective labour disputes about employees’ interests’ ie, disputes over new labour conditions and benefits: These must be referred firstly to the enterprise reconciliation council or labour conciliator, secondly to the provincial labour arbitration council and then, if they remain unresolved, the workforce can lawfully strike.
In an enterprise with less than 300 employees, at least 50% of the employees must agree to the strike for it to be lawful. In larger enterprises, at least 75% of a prescribed representative group of employees must agree.
According to the changes, striking employees are not entitled to be paid for the period of the strike.
Either the employer or the employees may apply to the People’s Court for a ruling on whether a strike is lawful. Employees who remain on strike after a finding that the strike is unlawful may be subject to disciplinary penalties. Moreover, if an employer suffers loss or damage as a result of unlawful strike action then those responsible may be required to compensate the employer.