POST-SOCIALIST TRADE UNIONS, LOW PAY AND DECENT WORK
VIETNAM RESEARCH TEAM
CASE STUDY
DA NANG MUNICIPAL UNION
Hanoi, February 2007
Introduction
Da Nang is the 'capital city' of the Central of Vietnam and also the most industrialized city in
the region. The city enjoys a long and beautiful coast line which enables the strong
development of tourism but large exposure to typhoons and flood.
With the SOE reform, there are now few state corporations left in Da Nang. Instead, the city
enjoys a concentration of Chinese, Taiwanese, Korean and Japanese companies and a large
number of medium-sized private domestic companies.
Wildcat strikes and labour disputes are not a problem for Da Nang as serious as that for Ho
Chi Minh city, Binh Duong or Dong Nai but as observed by VGCL officials here, the
problem is growing. Recently in the late 2006, tropical storms devastated the region,
including Da Nang, leaving a number of enterprises with serious damages and interruption of
production. Consequences of natural disasters also result in negative impacts on the benefits
and working conditions of workers.
The case study focuses on the municipal union of Da Nang (which is administratively equal
to a provincial union) which both directly supervises district and IPZ unions and company
unions. In-depth interviews with two union officials, one is the vice chairwoman of the
municipal union, the other is a staff and member of the strike taskforce, bring light to
complexity of the union machinery which spread from provincial down to enterprise level as
well as various channels and types of support provided by the former from their own
assessment. These observations, when compared with the case study on Binh Duong IPZ
union, will bring out the picture of higher level unions - the source of support for workers
and company unions.
One major finding of this case study is that the fixed division of responsibility between
provincial and district level of union plus a high degree of decentralization are working as a
two-blade knife. On one hand, it allows an active union to make the most of its strength. On
the other hand, it significantly isolates one union from others horizontally and vertically,
which will limit the influence and power of the union system.
A few brief interviews with central VGCL officials, an employer and a union leader in Da
Nang (through email and telephone) were carried out for cross-checking.
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Overview of Da Nang Municipal Union
Da Nang Municipal Union reports directly to the central VGCL and Da Nang People's
Committee. Like the VGCL at the national level, it is regarded as a quasi-department at
provincial level. Leaders of the municipal union sit in monthly meetings of Da Nang People's
Committee and other labour related provincial bodies such as the labour protection council,
medical examination commission and the inter-disciplinary inspection mission.
There are over 700 registered companies in the city with 75,780 workers, among whom over
seventy six percent (58,116 workers) are union members. The unionization rate among state
owned enterprises is 100 percent and that in non-public sector is 40 percent. Among the 700
enterprises, the unions of fifty large companies report directly to the municipal union while
the rest are supervised by district-level unions who, in turn, report to the municipal union.
There are 20 district and industrial zone unions in the city. However, according to the vice
chairwoman of Da Nang union, due to decentralization, this type of reporting is more a
formality than for practical purpose as the district unions have the freedom to handle all
relevant issues within their localities.
In 2006, five major wildcat strikes were reported even though this number in reality was
much larger since smaller strikes were not counted. During the last six months of 2006, Da
Nang suffered from two typhoons which devasted the coastal areas and damaged a large
inland area. Due to the typhoons, production in many enterprises was interrupted, facilities
and buildings were ruined. Consequently, a number of enterprises can hardly afford the Tet
benefits (one month's salary as Tet bonus, Tet baskets for migrant workers etc.) for workers
as usual, which coupled with other factors, is resulting in signs of another wave of strikes like
the one in 2006 (this will be discussed further later).
Relationship with lower-level unions
Every month, the municipal union organizes a meeting with district and IPZ unions to review
the union work and inform new policies and activities. These meetings are held in different
places in the city so that we can get to know better the real situation at grassroot level, Da
Nang union vice chairwoman said. Though the meetings are for district and IPZ unions,
union leaders of enterprises in the districts where the meetings are held are also invited to
come and share their concerns and experiences.
On a daily basis, the municipal union keeps contact with enterprises, workers and lower level
unions mostly by telephone and email (email is used more often by HR staff or employers).
Most queries are about labour and trade union legislation, collective bargaining and
collective agreement procedures and others refer to labour dispute settlement. There are two
channels of communication with workers and grassroot unions. Officially, workers contact
the counselling office at the municipal union building. In this office, a full-time staff with
legal background is assigned to receive questions and provide legal counselling. This service
is provided free of charge. This counselling office is supposed to take requests for support in
strike settlement, among other issues. But most of the time, the callers would contact
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members of the adhoc strike settlement taskforce instead of going through the counselling
office.
The strike taskforce was formed unofficially four years ago with members from the
department of labour and municipal union1. After the 2006 Tet strikes, the People's
Committee issued a decision to set up the municipal strike taskforce which settles strikes and
advises the People's Committee in labour relations issues. However, the strike taskforce
would only intervene into major strikes which involve a large number of workers or those
that are too complicated for district or IPZ unions to solve. Settlement of other smaller labour
disputes fall into the authority of local unions.
The municipal union also sends its staff to enterprises that it is directly in charge of to
organise 'thematic clubs' or roundtable meetings for workers regarding labour protection,
labour legislation, business culture, the Green-Clean-Beautiful campaign (an environmental
protection initiative). These meetings are held after work or at the weekends in workers'
dormitory or at the factory depending on whether the employers are cooperative or not.
With funding from the central VGCL or international projects, the municipal union also
holds training courses for union leaders on labour legislation, negotiation skills, union
marketing skills etc. However, these courses are not organized frequently due to limited and
irregular sources of budget.
Every year, the VGCL grants 'Strong and stable union' Awards to grassroot unions and the
municipal union is responsible for appraising and selecting nominees to submit to the VGCL.
There are four criteria for evaluation: (1) all workers in the company have got labour
contracts; (2) the company has signed collective agreement with its union; (3) the company
has set up labour protection committee; and (4) no labour dispute or strike during the year.
According to a municipal union staff, the evaluation is confined to quantitative and surfacial
criteria rather than more in-depth issues such as the quality of collective agreements or the
contribution of union to the improvement of working conditions because criteria are fixed by
the central VGCL for the whole national program. Also, in many cases it is difficult to
separate the contribution of union from management initiatives because they are often mixed
- if the management does not agree, the union can not do anything by themselves, the union
staff explained.
Upon perception of the limitations of grassroot unions, for the last two years, Da Nang
municipal union set up working groups to support unions in three types of companies by
ownership - state owned, foreign-owned and domestic. Heading these working groups are
high-level officials of the municipal union. The working groups collaborate with district/IPZ
unions to advise grassroot unions on development of work norms, wage tables, and
establishment of labour protection committees as well as labour dispute settlement and
collective bargaining. This seems to be another way of dividing responsibility within the
municipal union to overcome the bureaucracy and provide enterprise unions with quick
support when needed.
1
The Police usually join the strike taskforce but they would only stand around to keep order and prevent
violence.
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However, according to a union leader of a private company in Da Nang, grassroot unions
would turn to from district or IPZ union as it is difficult and time-consuming to reach the
municipal union. Even if they call the municipal union, the latter would suggest they go
through the district union first. For the fifty large, high-profile companies under the direct
supervision of the municipal union, with large budget, they can afford to ensure stable labour
relations. The most difficult cases are small and medium-sized enterprises in the non-public
sector, mostly subordinate to district and IPZ unions. Yet, when asked whether they would
support grassroot unions not under their immediate supervision, the vice chairwoman said:
The whole structure is decentralized and each union level has its own designated tasks.
Companies should refer to their immediate higher level union first. If the union fails, they
can transfer the request to us. Anyway, we do not have enough staff to cover all enterprises
in the city.
Recruitment
Despite the VGCL one-million-member campaign and commitments of the labour
administration and VCCI at national level to support this effort, Da Nang union faces with a
number of difficulties in extending its membership. Our staff find it difficult to secure the
permission of the employers to meet with workers. On the other hand, because most workers
come from the countryside, they do not understand about the union; it is hard to talk them
into joining the union, the union vice chairwoman complained.
Another constraint is the limited budget for recruitment. In pursuant to the union charter,
workers contribute one percent of their salaries for membership dues and companies pay two
percent to support union. Seventy percent of these contributions is kept to cover union
activities in the establishment and thirty percent forwarded upward to higher level unions.
Yet, that foreign-owned companies are exempted from the two percent contribution has
seriously affected the budget of Da Nang union.
Due attention is paid to collecting information about newly established enterprises in the city
to identify targets for recruitment. However, from the researcher's observation, the municipal
union leader and staff do not have a clear and practical idea of how to tackle the difficulties
mentioned and make the union more attractive for the new generation of workers. Despite the
eye-catching slogan of "Practical - Short - Clear - Easy to understand and remember" in
recruitment, the 'union marketing' content is confined to VGCL history, functions and
political position, trade union law and charter. When asked about the benefits the union can
bring to its members, the municipal union staff listed labour law education, monitoring of
employers' compliance with the law, contributing to the development of wage tables and
work norms. The approach is more supply-driven (basing on what the union can provide)
rather than demand-driven (what workers need).
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Relationship with the central VGCL
The VGCL has a program to financially support union work in the foreign-invested sector in
certain regions. For each full-time union leader in this sector, the VGCL grants three million
dong for income support and transportation. The budget in Da Nang is allocated by the
municipal union. In 2006, approximately 1,000 unionists were supported. However, this type
of support does not guarantee that we can do our best, a union leader of an FDI company
commented, because everything in the factories, including time and opportunities to meet
with workers and organize union events, depends on the employer's cooperation.
When a new legislation is in development, the VGCL also sends its staff to the city to help
organize consultative seminars for local union leaders. The last revision of Labour Code
Chapter 14 on labour dispute settlement procedure, for instance, aroused a strong debate in
Da Nang.
Training courses are often held by VGCL for staff of the municipal union. Recent topics for
training include negotiation skills, collective bargaining skills, labour legislation, union
marketing skills.
Again, a high level of decentralization and autonomy can be observed in the relationship
between Da Nang union and the central VGCL. In practice, the municipal union is more
attached to the local people's committee than the VGCL in Hanoi.
Relationship with local employers
Like in Binh Duong, the foreign investors' associations have a strong voice in determining
the wages and working conditions of workers. Nonetheless, as admitted by the municipal
union vice chairwoman, the union does not have any channel of communication with them
regarding labour relations issues, formal and informal alike, because they are not recognized
as employers' representative organisations. Normally, the union would meet with the VCCI
office in Da Nang even though it is clear that only a few companies are member of this
organisation.
However, the municipal union has made attempts to communicate with employers. For
example, at the New Year, the union holds a meeting with all local employers. A major
purpose of these meetings is to call for support to poor workers or victims of natural
disasters.
Every quarter, together with the DOLISA and other relevant agencies (the police, department
of health, department of planning and investment), the union pays inspection visits to
companies at random. However, due to time and resource limits, each company is visited
once ever two or three years.
In the last month (before Tet), there were warning signs of another wave of strikes in the
South. For example, in Linh Trung IPZ in Ho Chi Minh city, workers of several companies
went on strike to demand for higher wages while others striked to celebrate the one year
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anniversary of last Tet wave of strikes. To prevent this possible contagion, the municipal
union in Da Nang, in the last one or two months, sends their staff to various companies,
warning them about possible causes of strikes. For instance, migrant workers should be
released for Tet a few days earlier cause they have to travel back to their hometown (in the
North); for those affected by the typhoons and unable to pay Tet bonus, the union suggested
them to give Tet baskets to workers. If employers can not afford Tet baskets, the union gives
workers Tet presents themselves. This morning alone, the union gave 100 Tet presents to
workers in the coastal areas. Giving Tet presents is the culture of Vietnam. If not, workers
may go on strike, the vice chairwoman explained.
The biggest concern for the union, however, is the lack of cooperation of FDI and private
employers who often bar the former from meeting with workers. However, according to a
private employer, it is the municipal union that rarely comes to the grassroot level to talk to
workers, not because of the employers: if they [the union] come, we would welcome because
they can help us in talking to workers and stablizing the labour relations. But they would
rarely come except for strikes.
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Summary of Major Findings
1. The links between the central VGCL and the municipal union and between the municipal
union and lower-level unions are becoming looser as their contacts and communication have
grown to be more formal than practical. In other words, decentralization within the VGCL
structure has become a kind of detachment from one level to another, which will seriously
weaken the power of the organisation and deprive grassroot unions and workers of a
legitimate source of support.
2. In the case of Da Nang, the municipal unions have made more than one attempt to support
workers and grassroot unions, for instance the establishment of sectoral work groups, various
types of activities and meetings for workers, the formalisation of strike taskforce, etc.
However, due to their detachment from real situation at grassroot level and ignorance of the
real weaknesses of unions, these attempts have not proved to be effective at all. Their effort
to prevent strikes, for example, would only remove the surfacial, not the underlying causes of
the problem.
3. Putting the case study of Binh Duong IPZ union and Da Nang municipal union together,
we can see that though the IPZ union is limited in many aspects, it is closer to the grassroot
unions and much more pragmatic in its approach. The quality and effectiveness of the IPZ
union, therefore, would be significantly improved if they receive more practical technical,
financial and political support from the higher level unions. For example, setting up an
informal forum to meet with local business associations, providing technical support in
collective bargaining, proposing to improve accommodation for workers, etc - the issues that
can only be addressed at provincial and national level.
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