Vietnam: Move to Independent Labor Unions Stalls

Bloomberg Law for HR Professionals is a complete, one-stop resource, continuously updated, providing HR professionals with fast answers to a wide range of domestic and international human resources...

By Lien Hoang

The U.S. exit from the Trans-Pacific Partnership has resulted in an indeterminate delay in labor reform in Vietnam, including the government's pledge to allow independent alternatives to the nation’s single party-controlled labor union. The problem for the Communist Party, experts say, is that independent labor unions could represent competing centers of political power.

“Unions are not just employee organizations, but also political organizations,” Baker McKenzie associate Trung Khuat said in an interview at his Ho Chi Minh City office.

The remaining 11 TPP members continue negotiations, and Khuat expects the Vietnamese government will eventually allow independent unions, but the process will take longer than it might have had the U.S. remained in TPP.

Sad History, Gloomy Forecast

In his book Between a River and a Mountain: The AFL-CIO and the Vietnam War , Edmund Wehrle chronicles American labor’s support for Vietnamese comrades. With funds from the AFL-CIO and the U.S. government, the South Vietnamese tried to shore up workers’ rights and gain political legitimacy for unions. But when the U.S. withdrew and the Saigon regime collapsed in 1975, the worker’s movement dissolved.

“The TPP has the promise of reversing that sad history,” said Wehrle, a history professor at Eastern Illinois University. “Unfortunately, given the AFL-CIO’s position and the political climate in America today, the TPP may be destined for the dustbin of history.”

The original plan under the TPP was for Vietnam to overhaul its 2012 Labor Code by 2018, which would have resulted in more overtime work, easier means to fire employees, and fewer benefits for women, in addition to freedom of association.

With the U.S. exit from TPP, however, Vietnam lost the reductions to textile tariffs in its largest export market and thus its chief incentive to enter the Pacific trade zone. As a consequence, the labor code revision has been shelved.

“TPP is the only reason why Vietnam was willing to break this [union] monopoly, with strong insistence from the U.S.,” Nguyen Khac Giang, a researcher at the Vietnam Institute for Economic and Policy Research in Hanoi, told Bloomberg BNA by email. “Without its push, I don’t think the government and the party will even consider it anymore. Therefore, my expectation for more unions in Vietnam is quite gloomy. I would say nothing [will] be changed before the next Party Congress in 2021.”

Other Incentives

But Khuat thinks change could come as soon as 2019. As vice chair of the human resource committee of the European Chamber of Commerce in Vietnam, Khuat will meet with the Ministry of Labor, Invalids and Social Affairs this month. On the agenda will be the European Union-Vietnam Free Trade Agreement, which would also commit Vietnam to allowing new workers unions.

So while multiple labor unions seem inevitable, the labor ministry might be buying time for deeper legal revisions than first planned, lawyer Stephen Le Hoang Chuong said.

“There is also the possibility that Vietnam wants to show reluctance in regulating the independent trade unions, so that Vietnam will have leverage in the negotiation with the remaining TPP members,” Le, managing partner at the Ho Chi Minh City-based law firm Le & Tran, told Bloomberg BNA.

Human Rights Watch’s Phil Robertson doesn’t buy it. The deputy Asia director said Vietnam only “grudgingly” accepted union competition under “heavy pressure” from the Obama administration.

“Now that the TPP is kaput, it's quite clear that Vietnam will shamefully decline to disturb the government-controlled Vietnam General Confederation of Labor's lock on unions,” Robertson told Bloomberg BNA, referring to the country’s sole umbrella union.

So while the consensus seems to be that Vietnam’s working class may eventually have the freedom to organize outside state influence, the government clearly is in no hurry to cede its control.

To contact the reporter on this story: Lien Hoang in Ho Chi Minh City at

To contact the editor responsible for this story: Rick Vollmar at

For More Information

For more information on Vietnamese HR law and regulation, see the Vietnam primer.

Copyright © 2017 The Bureau of National Affairs, Inc. All Rights Reserved.

Request Bloomberg Law for HR Professionals