Vietnam's labor union reform debate bubbling to the surface

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Critics say unions lack autonomy and the ball is now in the court of Nguyen Thien Nhan, a familiar face in the West and the new president of the Vietnam Fatherland Front


Factory workers change shifts at the Thang Long Industrial Park outside of Hanoi, Vietnam. The only legal trade union for Vietnamese workers, the Vietnam General Confederation of Labor, and its local chapters and corporate affiliates have been lambasted for failing to take on the challenge of representing workers who have been wrestling to obtain better wages and get better treatment, fueling wildcat strikes across the country over the past several years. PHOTO: BLOOMBERG

Nhung immediately shook her head when asked about the efficiency of the labor union at her workplace, a Taiwanese-owned factory that employs around 10,000 workers in Dong Nai Province, some 35 kilometers northeast of Ho Chi Minh City.

"It seems to me that the labor union was set up only for the sake of abiding by the law," Nhung told Vietweek, declining to reveal her full name due to the "sensitivity" of the issue. "It should be playing a much more proactive role in advocating for better meals and wage policies for us."

The only legal trade union for Vietnamese workers, the Vietnam General Confederation of Labor, and its local chapters and corporate affiliates have been lambasted for failing to take on the challenge of representing workers who have been wrestling to obtain better wages and get better treatment, fueling wildcat strikes across the country over the past several years.

There have been growing calls for an across-the-board overhaul of the confederation with Communist Party Chief Nguyen Phu Trong urging its leaders to pay more attention to the legitimate concerns of the workers at the organization's national congress last July.

The most recent statistics show that a majority of wildcat strikes in Vietnam over the first five months of this year took place at foreign companies with workers demanding better meals, higher wages, less overtime work, and better working conditions.

An overwhelming majority of strikes in Vietnam have been wildcat, meaning not organized by workplace unions.

These strikes are getting increasingly "complicated", according to a statement from the Vietnam General Confederation of Labor.

"Wildcat strikes often represent the only mechanism through which workers can express their concerns and frustrations, and the recent occurrences in [South] Korean and Taiwanese garment factories where owners use authoritarian methods and at times physical violence toward employees suggest that the situation may be particularly dire in foreign-owned companies," Nina Torm, an independent consultant who has performed extensive research on Vietnam's labor issues, told Vietweek.

On the bright side, the number of wildcat strikes has shown sign of abating. There were more than 400 strikes last year, a 44 percent decrease from 978 strikes in 2011, largely thanks to continued wage hikes, particularly in industries that require workers with more experience.

In Vietnam, the minimum wage is used to set salaries and official bonuses for employees. The minimum wage is now VND1.65-2.35 million (US$78-111.13) a month, depending on the location.

The Vietnam General Confederation of Labor has maintained that the minimum wage has not met basic living standards for decades.

Despite warnings from the corporate sector against more wage hikes, the confederation has proposed yet another minimum wage hike next year. The proposed 33 percent raise would still only be able to cover 75-84 percent of workers' basic living needs, according to the confederation.

Labor unions: puppets or labors of love?

While analysts praise the confederation for the move, they say the biggest single reform should be to continue to make the organization a truly effective representative of the workers.

"[The labor confederation] is not independent from the Party and state, and therefore it is not entirely under the direct control of union members," Jonathan Pincus, an economist formerly based in HCMC, said.

Experts also slam regulations that enable company management to select labor union officials.

"It is not unusual for managers to become [labor] union leaders," Do Quynh Chi, a labor expert, wrote in a 2008 research paper on  labor union reforms.

"The employers' manipulation of union elections and the union's subordination to the management deprive trust of workers from their so-called representatives," she wrote.

The Front man

Analysts say the labor confederation reform issue is now in the court of the Vietnam Fatherland Front, an umbrella organization whose authority and purview is vast and includes oversight of all nationally-recognized religions, trade and other social unions and associations.

Last month the Politburo, the Party's decision-making body, installed Nguyen Thien Nhan as the Front's new president. Since the end of the Vietnam War in 1975, Nhan, an East Germany- and US-trained technocrat, is only the second Politburo member to take on this job.

His appointment has come as a surprise to the diplomatic community in Vietnam.

"Of key interest was why Nhan, despite being one of the most cosmopolitan and westernized politburo members, is being sent to look after a very domestic-oriented organization," a foreign diplomat said on condition of anonymity.

It is interesting to recall that when the first strike wave hit HCMC in 2005, the municipal administration set up a steering committee on strike settlement and appointed Nhan, then the city's vice mayor, as its head.

City hall said at the time that strikes had spiraled out of control and threatened "to have a serious bearing on the investment climate if employers [of strike-hit enterprises] ... have to close down their companies."

One of the solutions city authorities hammered out at that time was to increase the minimum wage.

Carl Thayer, a Vietnam expert at the University of New South Wales in Australia, said: "The biggest single reform [for the Front] should be to make the [labor confederation] a truly effective representative of those who work in the textile and garment industry, especially foreign joint ventures."

He said that in the context that the industry is the most vulnerable to strikes.

Nhan took on the presidency of the Vietnam Fatherland Front on September 18, "at a time when civil society in Vietnam is becoming more robust," Zachary Abuza, a Washington-based Southeast Asia analyst, said. 

"This is a recognition that the Party wants to increase oversight and guidance so that they continue to conform to Party and state policies," he said.

The Party is looking to expand its membership in the non-public sector the most strike-prone area. According to a Party plan, the target is "recruiting the majority of workers in the non-public sector as Party members by the year 2020" and "establishing Party cells in all enterprises." It also emphasizes the role of the union in "containing and limiting the illegitimate strikes," Chi, the Vietnamese expert, wrote in her paper.

Given the status quo, the labor union "cannot become a real union while it remains a state organization," Chi wrote.

The dilemma of representing members' interests on one hand and serving the state on another would "only intensify and present increasing challenges for trade unions in the face of continuing wildcat strikes," she wrote.

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