II. Restrictions on Labor Rights in Vietnam

A trade union is a large political and social organization of the working class voluntarily established under the leadership of the Vietnamese Communist Party. It represents Vietnamese workers, is part of the political system of Vietnam, and brings the benefits of socialism to workers.  —Article 1, Vietnam’s Law on Trade Unions

The development policy of the Vietnamese government is based in part on using Vietnam’s hard-working and low-paid work-force as a selling point to attract foreign investors. In Vietnam, minimum monthly wages range from 650,000 dong (US$36) for workers in Vietnamese companies to between 800,000-1 million dong (US$50-62) for workers in foreign-owned companies.[17] As the website of the Vietnam Trade Office in the United States asserts, foreign investors are drawn to Vietnamese “traditions emphasizing learning and respect for authority as well as low wages.”[18] Deputy Prime Minister Nguyen Thien Nhan confirmed the importance of low-cost labor to the economic development of Vietnam: “Over the last 20 years,” he told the state news service in 2008, “Vietnam had successfully attracted foreign investment because of its low cost labor force.”[19]

As a member of the ILO, the Vietnamese government is required to respect and promote the fundamental rights enshrined in the ILO Declaration on Fundamental Principles and Rights at Work.[20] These include the principle of “freedom of association and the effective recognition of the right to collective bargaining.” However, Vietnam has not ratified either of the two ILO conventions concerning this fundamental principle: Convention No. 87, regarding the right to freedom of association and protection of the right to organize; and Convention No. 98, regarding the right to organize and collectively bargain. Even so, as an ILO member, Vietnam is obligated to promote freedom of association, regardless of whether it has ratified the relevant conventions.[21]

Restrictions on freedom of association

With input from the ILO, Vietnam passed a comprehensive Labor Code in 1994. The law sets minimum wages, establishes safety and sanitary conditions, and recognizes the right of workers to strike under certain conditions.[22] However it prohibits workers from freely forming their own trade unions or from joining trade unions of their own choosing.

The Communist Party controls the only official trade union in Vietnam, the Vietnam General Confederation of Labor (VGCL). Headed by a Communist Party Central Committee member, the Confederation is an umbrella organization that oversees and supervises subsidiary labor unions established in different regions and industries across Vietnam.

Any enterprise with more than 10 workers is required to form a trade union approved by, affiliated with, and acting under the authority of the Confederation.[23] The 1990 Trade Union Law defines a union as an organization of the working class “voluntarily established under the leadership of the Vietnam Communist Party.” It requires all unions to inform relevant government organizations at the time of their formation, in order to “establish official relations.”[24] In fact, many joint ventures and foreign-owned companies that have experienced wildcat strikes have not had formal unions,[25] with only about 40 percent of Vietnam’s 16 million wage earners belonging to the Confederation and its ancillary unions.[26] 

The Confederation’s website offers the following description of its mandate:

The Vietnamese trade union is an umbrella social-political organization voluntarily formed by working class, intellectualists and workers in order to mobilize, consolidate forces and build a working class strong in all aspects, to represent and protect lawful and legitimate rights and interests of workers, striving for building an independent and unified Vietnam towards socialism.[27]

All activities and objectives of unions in Vietnam must be authorized by the Confederation, providing it effective veto power over unions’ international relations and affiliations.[28] At times the Confederation has advocated for labor reforms, calling for better health, safety, and minimum wage standards and amendments to labor laws.[29] Revisions in the Labor Code approved in 2001, for example, authorize workers in certain enterprises, such as taxi drivers and cooks, to form unofficial “labor associations.” However, these associations lack the authority to bargain with employers or conduct strikes.[30] In 2006, recognizing that many workers are not members of the Confederation, the Labor Code was again amended to allow “relevant entities” to negotiate in labor disputes.[31]

The lack of independence of Confederation representatives from the Communist Party and the enterprises that employ them, as well as the lack of protection for those seeking to organize, undermines any mandate the Confederation has to defend workers rights. Unsure how to address escalating labor unrest, the government has not only tolerated large unsanctioned strikes, but also frank assessments of the Confederation’s shortcomings by its own leadership. In 2008, Confederation Vice President Mai Duc Chin stated in an article in the Vietnamese state press:

There hasn’t been any policy to protect [Confederation] union staff and most employers don’t cooperate with unions... Local union staff at non-state enterprises were not adequately qualified for carrying out their responsibilities. Most of them didn’t devote much time to union activities and some lacked the courage and motivation to fight for labor rights.[32]

Former Confederation President Cu Thi Hau stated that despite restrictions in the Labor Code, during 2005-2006 more than 1,000 strikes deemed illegal took place. “It is thus clear that the Labor Code is not realistic, it must be speedily corrected,” she stated.[33]

Even when Confederation representatives have highlighted violations of labor laws, authorities rarely follow through with action.[34] Part of the problem is that when courts adjudicate labor complaints, including disputes involving thousands of striking workers, they do so on a case-by-case basis.[35]

Restrictions on strikes

Vietnamese laws provide no definition of what constitutes a strike, but they do define what constitutes an illegal strike! —Activist Le Thi Cong Nhan in 2006, currently serving a three-year prison sentence[36]

Vietnam’s Labor Code allows party-controlled unions to strike but imposes strict and cumbersome conditions that must first be met, which effectively nullify this right. In order to receive authorization to strike, workers must first submit their complaints for mediation by local conciliation councils comprised of equal numbers of representatives of workers and employers.[37] If conciliation fails, either party can submit the complaint to a district labor arbitration council established by the provincial People’s Committee, or to the district-level People’s Committee. If the dispute remains unresolved, it can proceed to the provincial labor arbitration council.

All of these steps must be taken before a legal strike can take place.[38] Unions—or groups of workers if no union is present—can contest the ruling of a provincial arbitration council by filing an appeal with the labor court under the Provincial People’s Court, if necessary taking the dispute to the Court of Appeals and the Supreme Court for a final decision.[39] If dissatisfied with the results, in theory the workers can then legally go on strike.

Since the Communist Party controls not only the Confederation but the conciliation and arbitration councils, the People’s Committees, and the People’s Courts, strikes are rarely—if ever—given legal authorization.

Amendments to the Labor Code that came into effect in July 2007 further stiffen restrictions on “illegal” strikes, imposing administrative sanctions and criminal charges against people who “incite, embroil, or force” workers to strike.[40]  The amended code defines two types of labor disputes: those over compliance with the law and contracts (“disputes over rights”) and disputes over benefits and demands beyond what the law provides (“disputes over interests”). The amended code establishes different procedures for conciliation of the two types of disputes. Strikes are only authorized for disputes over interests. For disputes over rights, if conciliation fails either party can take the case to court, thereby outlawing rights-related strikes.[41]

The new amendments also set a high bar for worker approval of strikes, requiring that 75 percent of workers at enterprises with more than 300 employees must vote in favor of a strike (or 50 percent for enterprises with less than 300 employees).[42] Some provisions in the amended law protect workers in “legal” strikes from reprisals such as termination of workers’ contracts or unilaterally suspending a business operation in order to thwart a strike.[43]

Management talking with workers during a strike at a foreign company in southern Binh Duong  Province in January 2006. Foreign companies have flocked to Vietnam, drawn in part by its low daily wages. Waves of strikes in recent years have caused alarm among the business community and the government. © 2006 AFP/Getty Images

Strikes are prohibited in 54 sectors considered to provide essential public services or be important to national security or the national economy, including the transportation, banking, and postal sectors; oil, gas, and forestry enterprises; and power stations.[44] The prime minister can terminate any strike considered to be a threat to public safety or to the national economy.[45] Furthermore, government regulations impose fines of up to three months’ pay on workers who participate in strikes declared unlawful by a People’s Court, to compensate employers for losses incurred as a result.[46] 

Despite such restrictions, strikes and other public expression of discontent over wages and working conditions continue to soar in Vietnam, with at least 650 unsanctioned strikes taking place in 2008. This is 20 percent more than during 2007, according to official statistics.[47]All of these strikes have all taken place outside of Vietnam’s legal framework, as outlined above. While wildcat strikes are often tolerated by local officials, the vast majority are in fact in violation of Vietnamese law.[48]

Wages and working conditions

Instead of concentrating on excelling in the legal and banking systems and providing an effective infrastructure to attract foreign investments, the Vietnamese government has blindly grasped cheap labor as the only token in their strategic planning to lure foreign investors.—Activist Huynh Viet Lang in February 2006, prior to his arrest and imprisonment in August 2006[49]

Inflation in Vietnam, which reached 27 percent in the latter half of 2008,  and the spiraling costs of food, fuel, and other consumer goods and a devaluing currency, threaten to push low-paid workers and their families further into poverty.[50]

After wildcat strikes began to escalate in 2006, the government increased the minimum monthly wage for workers at foreign-invested companies in most of Vietnam to 710,000 dong (US$44) a month. Wages for those working in foreign-invested companies in Hanoi, Ho Chi Minh City, and other industrial centers were raised to 870,000 dong (US$54)—a 40 percent increase, and the first such increase since 1999. Minimum wages at state-owned enterprises were raised to 450,000 dong (US$28) a month.[51]  

The wage increases did not stem labor discontent, as unprecedented numbers of workers—mostly at foreign-owned enterprises operated by South Korean, Japanese, Taiwanese, and Singaporean companies—continued to strike for better pay and working conditions.[52]

In November 2007, the government announced another wage increase.[53] In legislation that came into effect in January 2008, minimum salaries for government workers and members of the armed forces were raised to 540,000 dong (US$33). Salaries for workers in domestic and foreign-invested companies were raised based on their factory’s location and whether investors were foreign or Vietnamese. Minimum monthly wages were increased to 540,000 dong (US$33) for Vietnamese enterprises throughout most of the country and slightly higher for companies in major cities and suburbs. Wages for workers in foreign-owned enterprises ranged from 800,000 dong (US$50) to 1 million dong (US$62) in foreign-owned factories in industrial centers such as Hanoi and Ho Chi Minh City.[54]  Yet another wage increase, to 650,000 dong (US$36), went into effect May 1, 2009.[55]

Critics, including the US State Department, noted that the new wages fail to provide a decent standard of living to workers, especially given racing inflation.[56] 

In an increasing number of cases, workers are not striking for higher wages, but simply to be paid for work completed. During 2008, thousands of workers in Ho Chi Minh City and surrounding areas lost their jobs when their companies announced bankruptcy or laid off workers to keep costs down. At several factories, the foreign supervisors fled the country without paying workers two or three months worth of salaries owed to them.[57]

A worker at a South Korean footwear company in southern Dong Nai Province where nearly 14,000 workers went on strike in July 2008 to demand higher salaries.  ©2008 AFP

Workers are also striking to express their grievances over poor working conditions, and in some cases, their mistreatment by foreign managers, including physical and verbal abuse and sexual harassment.[58]

Local branches of the Confederation have reportedly tried to intervene in some of these cases, calling on the Vietnamese government to seize the foreign companies’ assets in order to pay the workers’ wages. In addition, the Confederation has advocated for a more streamlined process at the district level for workers to sue the companies. Lacking confidence that these measures will produce adequate or timely compensation, at some of the factories workers have conducted sit-down strikes to prevent the runaway owners from removing assets such as sewing machines.[59] For example, in November 2008 when talks failed between government officials and workers at the Quang Sung Vina Garment Company, striking workers said that if the government could not find a reasonable solution for them they would sell the factory’s machines and furniture to collect their salaries from the proceeds.[60]