The Role of Trade Unions in Companies and Enterprises Invested with Foreign Funds

by Hoang Thi Khanh
The Federation of Trade Unions of Ho Chi Minh City


I. Introductory Remarks

After the law on foreign investment in Vietnam was issued, many foreign companies invested money to produce goods and to do business in Vietnam. Since then, trade unions have been organized in the units invested with foreign funds.

Before discussing the trade union activities in the companies invested with foreign funds, I would generally like to present some information about the worker’s movement and the movement of trade unions in Vietnam and in Ho Chi Minh City.

II. The History of the Worker’s Movement In Vietnam

The movement of Vietnamese workers began at the end of World War I, but it was a spontaneous movement of struggle without organization until July 28, 1929, when the Cong Hoi Do (Red Workers Society) was formed, which was the predecessor of the present General Federation of Trade Unions of Vietnam.

In the first years of its existence, Cong Hoi had to operate secretly because it was not allowed to exist or operate by the French colonialist regime. However, Cong Hoi led the movement of struggle of the workers to request higher wages, improved working conditions and fewer working hours. Together with the people of the whole country, the Vietnamese working class was also responsible for struggling to secure the independence of their homeland from the French colonialists. In those days, the trade unions and the Vietnamese working class had to struggle against the enterprise owners, against the holders of power, who were not Vietnamese people. Therefore, in order to gain victory, the Vietnamese trade unions not only had to suffer material and spiritual losses but had to sacrifice their lives as well.

In the history of the Vietnamese trade unions, there is recorded the drastic struggles of the Phu Rieng rubber workers on Feb. 3, 1930, and the Nam Dinh textile plant workers on March 23, 1930. The struggles of the workers in this period contributed to the general struggle of the people to secure the independence of the motherland.

After the victory of the Vietnamese army at Dien Bien Phu in 1954, a half of the country, the North of Vietnam, having been liberated by the people, secured its independence. The trade union activity in the North changed in the new period. It had to cooperate with the

government to reconstruct the country after the war and to continue supporting the people of the South in their struggle for independence.

In the South of Vietnam during this period, trade union activity was very difficult. The pro-American government established a system of lackey trade unions, like the Tong Lien Doan Lao Cong Vietnam (The Vietnamese General Federation of Workers). From 1954 to 1975, the movement of workers and trade union activity in the southern provinces were intense.

After the victory of Spring 1975, the trade unions of Vietnam were unified in 1976. Together with the government of the working class, the trade unions motivated workers, officials and employees to compete in reconstructing the country that had been destroyed for years by the war.

At the sixth General Assembly of the Vietnamese Trade Unions held in October 1988, the name of the Tong Cong Doan (General Trade Union) was changed to Tong Lien Doan Lao Dong Vietnam (The Vietnamese General Federation of Trade Unions), and it started renovating the activities of the trade union system. Now workers who are working in any economic constituent can become members of the Vietnamese Federation of Trade Unions (formerly only the people who were working in the government units and in the public-private joint venture units were allowed to join the trade unions). The total number of members of the Vietnamese Federation of Trade Unions today is 4.5 million workers who belong to 21 trade union branches and four province or city trade unions.

Because Ho Chi Minh City is one of the largest cities of Vietnam, the movement of workers and officials and the trade union activities in Ho Chi Minh City play an important role in the general movement of trade unions in the whole country. Being a commercial city with many international relationships, the movement of Saigon workers is integrated into other struggling movements of the international working class. In particular, these international relationships were an important contribution to the struggle for securing power in the city throughout the last century.

Under French colonialist rule, the movement of workers and employees was always intense, and many excellent members of the Red Workers Society were imprisoned and sacrificed.

After the resistance against French colonialism, there followed the struggle against American neocolonialism. In this period, the movement of Saigon workers grew in terms of quantity and quality. The trade union cadres gained experience through their activities and infiltrated more and more deeply into the enterprises and factories. They even joined the lackey trade unions of the Saigon regime to motivate workers, officials and employees.

The trade unions organized many struggles to request higher wages, to ameliorate working conditions, to improve the people’s welfare and to advocate democracy and national independence. The trade unions of the city joined their activities with those of the students, Buddhists, priests, intellectuals and small traders. At last, they came down together in the streets to struggle against the dismissal of workers, against heavy taxes and for subsidies for unemployed people. The coordination of the legitimate forms of struggle and the secret activities with other groups in society and with other workers, officials and city people contributed to the victory for the nation in the Spring of 1975.

From 1975 to the present, the workers and the trade unions of the city have had a new position, a new role in the reconstruction of the country and the city. The trade unions take care of the material and the spiritual rights of cadres, workers, officials and working people; they control and supervise the government at all levels in the implementation of policies and regulations that affect workers, officials and employees. Moreover, for and on behalf of the workers and officials, the trade unions, together with the government, take part in determining the regulations suitable for the rights of workers, officials and employees in the city.

Today the number of members of the Federation of Trade Unions in Ho Chi Minh City is 600,000, who are concentrated in nine branches and departments, 18 urban and suburban districts and 200 trade union cells.

III. The Vietnamese Labor Movement and Foreign-Invested Companies

I would like now to present some information about the system of laws and regulations concerning trade union activities in the companies invested with foreign funds.

The Law on Trade Unions defines clearly:

"The Vietnamese employees working in the business and production units invested with foreign funds, the administration units, government agencies and social organizations have the right of establishing and adhering to the trade unions of Vietnam (Article 1, Part 2)."

Therefore, Vietnamese trade unions have the right of establishing their presence in any branch of transnational corporations (TNCs) which employ Vietnamese laborers, and Vietnamese workers have the right to join these trade unions.

Decree No. 233/HDBT dated June 22, 1990, by the Council of Ministers of the Socialist Republic of Vietnam proclaimed the labor statute pertaining to the enterprises invested with foreign funds. The decree defines the relationship between the company representative and the employees and the trade union in the company. The company representative signs the laboi contracts with the workers and signs the labor agreements with the trade union or the workers’ representative if the trade union does not yet exist.

With these laws and regulations, I believe that trade union activity and the cooperation between the workers and the representative of the company invested with foreign funds shall be easier based on respect for the law.

The number of enterprises and companies invested with foreign funds in Ho Chi Minh City is small; and until now, their range has not been great. In a number of enterprises, the company representative has paid a great deal of attention to the trade unions and has respected the labor contracts they signed with the workers. In some enterprises and factories, however, the trade unions in the joint venture units have met difficulties because of a lack of knowledge of the system of laws and regulations defined by the government of Vietnam. In some joint venture units, some regrettable things have happened because the representative of the company, as a foreigner, did not understand Vietnamese customs and practices, and the trade union had to intervene in the case with the unit leadership.

If there are only Vietnamese workers in a company invested with foreign funds, trade union activity is relatively easy and favorable. The main duty of the trade union is to represent the workers in the field. It cooperates and supervises the company representative in the implementation of labor contracts and labor agreements; and if necessary, it struggles for protecting the workers and employees.

If there are both Vietnamese and foreign workers in a company invested with foreign funds, trade union activity becomes more complicated. In addition to the role of representative of the workers and employees of Vietnam as mentioned above, the trade union in the enterprise or company has to heed the needs of the foreign workers employed in the unit.

If required, the trade unions of Vietnam in the joint venture companies are ready to act as representatives for the foreign workers employed in the joint venture companies and to protect their rights. The labor markets are being broadened over the frontiers of a country, and the TNCs have extended their range of investment to many countries all over the world. For their livelihood, workers have to seek employment far from their country; they want a representative body to protect their fights. As a representative for the workers coming here for work, the Vietnamese trade unions, in general, and the Federation of Trade Unions in Ho Chi Minh City, in particular, are always ready to cooperate with the trade unions of the countries from which the foreign workers have come. This cooperation, if any, shall certainly meet the desires and demands of our members who have to go far away for work as well.

I would like to conclude by pointing out a number of questions which need the intervention of the trade unions in the joint venture companies.

1. The first problem involves the employees and the company manager. The long existing problem of trade unions has been to intervene and seek a settlement of the contradiction between the worker and the company representative. One party wants to sell its labor at the highest price, and the other party wants to buy it at the lowest price.

Today the labor forces in many countries and areas are superfluous because of the internationalized labor market. Workers are also employed less and less in factories because of scientific and technical progress that replaces people with less labor-intensive modes of production. Under these conditions, the worker suffers as it becomes harder and harder to sell their labor and skills. In this environment, the trade union has to support the worker and to act as their representative, particularly in cases where the company representative is a foreigner. In my mind, the capitalists of TNCs use these circumstances to ensure their economic success in their overseas operations.

2. Another problem the trade union has to address and in which it has to intervene to achieve a settlement in companies invested with foreign funds is the contradiction between the local workers and foreign workers in the same joint venture company.

Each national group has its own customs and practices, behavior, ways of living and working. Thus, when the different groups work together in a company, the birth of contradictions can be a normal thing if there is not any settlement.

The two groups of workers also enjoy different incomes. Generally the expatriated workers are paid with higher wages as compensation for the loss they have to suffer because of living far from their family and homeland. The local workers, however, usually see the problem from a different viewpoint and sometimes with a feeling of discrimination. They do not feel, or feel less, the sentimental loss of living far from home and the motherland; rather, they see only the difference of incomes, the occupation of positions of authority, the favors of the company manager. Nobody can replace the trade union in the role of establishing mutual comprehension between the two groups of workers employed in the same company.

In spite of different rights, different nationalities, different adherence to different trade unions, all workers have one common class feeling and should join together in their struggle for their rights that have been violated. The foreign workers who come to work in the joint venture companies in Ho Chi Minh City shall be helped by the Vietnamese trade unions if they are introduced by unions in their country. Likewise, the Vietnamese trade union members desire to be helped by the trade unions of foreign countries when they have to work abroad. All working people consider it necessary to cooperate concretely for the rights of themselves and for the class of workers in TNCs.

3. The last problem I would like to present is the role of trade unions in accepting employees from foreign countries. Because of having to protect the labor rights of their members, many trade unions have had a cautious attitude toward the acceptance of employees from foreign countries. In the countries wanting labor, in the developed countries where the local workers do not like to do certain jobs in a number of professional sectors or in some underdeveloped countries where the local workers cannot yet do a number of jobs in some fields, the introduction of foreign workers is a necessity. In these cases, both parties can share mutual benefits: the receiving country wants the labor for its demands of production and business, and the sending country where the labor is superfluous wants to find jobs for its workers.

Where the import of labor is allowed and the labor force is superfluous in many areas, the capitalists want to profiteer from these circumstances by restraining wages and by providing their employees with an unfavorable working environment. The trade unions of the country receiving laborers and the country exporting laborers, for the sake of the working people, should cooperate together, requesting the capitalists to guarantee the following: to pay wages that correctly reflect the value of labor; to ensure that their employees work and live under favorable conditions; to prohibit discrimination between local and foreign workers, especially workers coming from underdeveloped to developed countries to work.

Another issue involving capitalists in TNCs is their transfer of workers from places where laborers are superfluous and cheap to places where wages are high but the jobs offered to foreign workers are not considered desirable by local workers. The object of this labor migration exercise is, of course, to increase the capitalist’s profits. These are issues that anybody who is interested in the welfare of workers, that anybody who undertakes trade union activity, cannot accept at all.

As leader of the trade unions in Ho Chi Minh City, I think that you and me, we, have to think of the rights of our trade union members since long ago the TNCs began to extend their business and production facilities, not only in some countries, but all over the world. Our trade union members do not work only in one place or one country but sometimes everywhere. Therefore, our trade unions have to find suitable forms of cooperation in order to protect the rights of workers and employees.

(This article, which was translated into English by Do Huu Nghiem, was presented at the Trade Union Study Meeting on TNCs, October and November1991, Ho Chi Minh City, Vietnam, and Bangkok, Thailand.)