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Are businesses in Vietnam penalized for not establishing a labor union?
Are businesses in Vietnam penalized for not establishing a labor union?
According to the provisions of the Trade Union Law, enterprises are not obligated to independently establish a trade union. However, they are responsible for facilitating the establishment, membership, and operation of a trade union if their employees express such a need.
Employees have the right to establish, join, and participate in the activities of a trade union in order to protect their lawful rights and interests. The formation of a grassroots trade union within a company is the right of the employees, and the enterprise is prohibited from obstructing this right.
Although companies are not required to set up a trade union on their own, they must refrain from obstructing and are obliged to facilitate the formation and participation of employees in a trade union if requested. This means the company must permit the legal operation of the trade union within the enterprise if one is established.
Should a company obstruct or create difficulties for the establishment or operation of a trade union, it may face penalties in accordance with the administrative violation laws.
In conclusion, while it is not a mandatory obligation for employers to establish a trade union, they must respect the employees’ right to form and join one, and they are not allowed to hinder this process.
Is a company with fewer than 10 employees required to establish a trade union?
A company with fewer than 10 employees is not required to establish a trade union. The formation of a grassroots trade union is the right of employees, not a mandatory obligation for the business. This means that if the employees within the company wish to form a trade union to protect their rights, they are entitled to do so, and the company must facilitate this process.
However, for smaller companies with fewer than 10 employees, it is often more challenging to establish and maintain the operation of a trade union due to the limited number of members. In such cases, employees may opt to join a higher-level union (such as an industry or regional trade union) to ensure their rights are protected.
Is there a penalty for not establishing a grassroots trade union?
As analyzed above, the establishment of a trade union is not a mandatory obligation for employers. However, employers are responsible for facilitating the establishment, joining, or participation of employees in the activities of a grassroots trade union within the enterprise.
In cases where the enterprise obstructs or creates difficulties for employees in carrying out lawful activities to establish, join, or participate in the activities of an employee representative organization at the workplace, the employer may be penalized in accordance with Article 35 of Decree 12/2022/ND-CP. Specifically, individual employers may be fined between VND 3 million and VND 5 million, while organizational employers may face double that amount, ranging from VND 6 million to VND 10 million.
Why do business owners not want to establish a trade union?
There are several reasons why business owners may be reluctant to establish a trade union within their enterprise:
- Concerns that union activities may reduce employer benefits
Trade unions represent the rights and interests of employees and may exert pressure on employers to negotiate on matters such as wage increases, improved working conditions, and additional benefits. The presence of a trade union could result in employers facing higher costs due to the need to raise wages, improve working conditions, or provide additional benefits as demanded by the union. This could potentially reduce the profitability of the employer.
Furthermore, the existence of a union increases the risk of strikes or other collective actions if employee demands are not met, which could disrupt the business’s operations.
- Increased internal procedures for the business
Establishing and maintaining a trade union within the enterprise requires various administrative processes and time, which can be burdensome for business owners, particularly for small and medium-sized enterprises.
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