The Labor Code 2019 allows employees to establish employees’ organizations at enterprises, outside of trade unions. However, the legal provisions on the establishment, organization and operation of this organization are still not specific. This is new and unprecedented issue in Vietnamese labor laws.

The employee representative organization at the grassroots is an organization established on the basis of:

  • The employee’s voluntariness at an
  • To protect the legitimate rights and interests of employees through collective bargaining or other forms.

Organizations representing workers at the grassroot level include:

  • Grassroots trade union;
  • Organizations of employees at their enterprise

1. Distinction between the employees’ organization and the trade union

According to Labor Code 2019 (“the LC”), employees have the right to establish, join and operate trade unions in accordance with the Trade Union Law. This is the only type of organization representing employees that was considered a representative organization for employees until January 1, 2021. The law also allows employees to have the right to establish, join and participate in activities of employees’ organizations at enterprises. This is a new organization different from the trade union.

The “grassroots trade union” and the “employees’ organization” at the enterprise are different in nature and purpose.

According to the Trade Union Law, “a trade union is a broad socio-political organization of workers and of employees, representing cadres, civil servants, public employees, workers and other employees (hereinafter collectively referred to as employees), together with state agencies, economic organizations and social organizations take care of and protect the legitimate rights and interests of employees; participating in state management, socio-economic management.”

The representative organization of employees at the enterprise is a mere social organization, only performing the representative functions to protect legal rights and interests of employees.

2. Conditions of establishment

An enterprise with 5 or more trade union members, or an employee who voluntarily applies to join the Vietnam Trade Union, is eligible to establish a trade union according to the provisions of the Trade Union Law and the Trade Union Charter.”

Meanwhile, the organization of employees is established according to the provisions of the LC. According to the LC, “at the time of registration, the employee’s organization at the enterprise must have a minimum number of members who are employees working at the enterprise in accordance with the Government’s regulations“. The exact minimum number of members has not been determined yet since there is no Government’s guideline regarding this.

3. Organizational leadership

The representative organization of employees at the enterprise shall include the Board of Management, and members. The Board of Management is elected by members of the employee’s organization at the enterprise. According to the provisions of the LC, the Board of Management is constituted with:

  • Vietnamese employees working at the enterprise (and)
  • Not being examined for penal liability, serving a sentence or not cleared yet of criminal records.

The LC also has not specified the number of members at the Board of Management of the representative organization of employees.

4. Right to collective bargaining

Collective bargaining is one of the most important of the activities and rights of an employee representative organization. However, not all employee representative organizations have the right to collective bargaining.

According to the provisions of the LC, an organization shall have the right to request collective bargaining when it reaches the minimum ratio of members to the total number of employees in the enterprise as prescribed by the Government. In case an enterprise has more than one employee representative organization meeting this regulation, the organization that is entitled to request collective bargaining is the one with the largest number of members in the enterprise. In case an enterprise has many employee representative organizations but none of them satisfy the regulation on representation ratio, the organizations have the right to voluntarily combine with each other to request collective bargaining. However, the total number of members of such organizations must reach the minimum ratio as specified above.

Thus, the regulation on the organization of employees contributes to protecting the legitimate rights and interests of employees. However, there are still many issues because of which enterprises face difficulties in practice such as not specifying the minimum number of members of the Board of Management. In addition, the law allows employees’ organizations to conduct collective bargaining with employers but limits this right by a minimum member rate.

The article is based on laws applicable at the time noted as above and may no longer be appropriate at the time the reader approaches this article as the applicable laws and the specific cases that the reader may wish to apply may have changed. Therefore, the article is for referencing only.


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