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Enterprises have not the responsibility of forming trade unions

The article titled: “Enterprises have not the responsibility of forming trade unions” from Lawyer Dinh Quang Thuan, is published on Sai Gon economic times, dated 05 May 2018.

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According to regulations of labour law, prior to the unilateral termination of a labour contract or dismissal of an employee or laying off many redundant employees with the reason of the change of organizational structure, the employer must consult with or invite the Executive Committee of the Trade Union of the enterprise to participate in the process of  labour disciplinary actions ([*]).

In principle, the onus is on the upper level trade union to ensure that every enterprise has its grassroot trade union. Regarding the enterprises, the law does not prescribe what they have to do in forming the trade union provided that the enterprises still provide favourable conditions so as the trade union will soon be formed and they do not obstruct the formation and operation of the trade unions in the enterprises.

Pushing enterprises into difficulties

So, in enterprises without the trade unions, how does the unilateral termination of labour contracts or dismissal of the employees take place? It still occurs, but without the consultation and agreement with the Executive Committee of Trade Union as prescribed by the law, simply because the trade union is not available there. Over a decade ago, when the labour disputes over labour contract termination and dismissal brought to the court, the Supreme People’s Court instructed the local courts to declare that all decisions on contract labour termination and dismissal without the participation of the trade union breaches the labour laws and shall be annulled. In such cases, enterprises must reemploy the employees and compensate them for the loss of income during the time of the contract termination or dismissal.

The above firm stance of the Supreme People’s Court has spelled trouble for enterprises without trade union as these businesses cannot unilaterally terminate or dismiss the employees  who are gripped by dismal competence or appalling attitudes. Therefore, in order to improve the organisation, some enterprises have no choice to actively contact in order to form their trade unions. This is a prominent point in the practical application of labour law so that enterprise managers, especially managers of foreign invested enterprises, contend that the formation of trade union in reality becomes the responsibility of enterprises, and that regarding the labour termination, labour law of Vietnam defends the employees excessively. The writer have many times witnessed the employees to be dismissed due to clear and serious violations, but they still initiated lawsuit against the enterprises for compensation and they were self-confident that they would win because they know that their enterprises would be deemed as violators when dismissing them without the participation of the trade union.

A way out

In the speech on 15 December 2009 in the Conference of Planning for the year 2010 of law court, the Labour Court under the Supreme People’s Court acknowledged different opinions on the necessity of the participation of the trade union when the employer terminates the labour contract according to Articles 17, 38 and 87 of the Labour Code and offered some suggestions on the consistent application as follows:

  • First, the enterprises that have trade unions but fail to consult the latter before terminating labour contracts or fail to invite the trade union to participate in processing the labour disciplinary actions against the employees will be deemed as seriously violate the procedures for labour contract termination or procedures of processing the labour disciplinary actions.

The forming of trade union in the enterprises is under the responsibility of local union or local upper level trade union where the enterprises are located. Therefore, when the employer terminates the labour contract or processes the disciplinary actions against the employees without performing the consultancy procedure for agreement with the trade union or without the participation of the trade union’s authorised representative due to the trade union is not available in the enterprise, the employer will not be deemed as to violate the procedure for labour contract termination or procedure for processing the labour disciplinary actions.

  • In enterprise which has not established the trade union yet, the employer must not consult with, or need the engagement of the upper level trade union representative in termination of labour contracts or processing disciplinary actions against the employees because it is not regulated in the labour law. It is necessary to have the participation of the upper level trade union when the employer dismisses or unilaterally terminates the labour contract of the Chairman of the Executive Committee of the trade union according to Article 155.4 of the Labour Code.

However, although these suggestions are still considered as an important reference to ensure the unity for judging, the discussion report of the courts in charge under the Supreme People’s Court is not enforceable because it is not a legal document. Hopefully, they will be soon be part of a resolution issued by the Supreme Court’s Council of Judges, or in the inter- sectoral circulars jointly promulgated by the Supreme People’s Court and related bodies so as to gain legal weight.

([*] ) Articles 17, 38 and 87 in the Labour Code