Vietnam’s Trade Union Law: Key Changes and Implications

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On November 27, 2024, Vietnam’s National Assembly adopted the long-awaited Trade Union Law 2024, replacing Vietnam’s Trade Union Law 2012. This new legislation, effective from July 1, 2025, introduces significant changes aimed at enhancing employee rights, strengthening trade union operations, and aligning Vietnam’s labor framework with international standards. Below are the key amendments and their implications:

1. Foreign Workers’ Right to Join Trade Unions

One of the most notable changes to Vietnam’s Trade Union Law is that foreign employees with employment contracts of 12 months or more will now have the right to join and participate in trade union activities at grassroots trade unions.

2. Strengthened Protection Against Trade Union Discrimination

The new law explicitly prohibits acts of discrimination against trade union members, including:

Refusal to renew employment contracts based on union participation.
Creating obstacles to work to weaken union involvement.
Providing false information to undermine union officials.
Offering incentives to employees to discourage union participation.
Discriminating in terms of wages, bonuses, or benefits due to union involvement.

3. Increased Trade Union Involvement in Audits

Local authorities conducting audits related to employee rights and benefits must invite trade union representatives to participate. These representatives can request employers to provide relevant information and explanations.

4. Continued Representation in Workplaces Without Trade Unions

The Vietnam Trade Union retains the right to represent and protect employees in workplaces where no corporate trade union exists. This representation can occur either at the request of employees or when the union detects potential violations of employee rights and benefits.

5. Financial Contributions and Exemptions

Employers must continue contributing 2% of the salary fund (used for compulsory social insurance calculations) toward trade union expenses. Employees must continue paying a 1% trade union fee.

New provisions allow for exemptions, reductions, or postponements of contributions in cases of economic difficulties, bankruptcy, or force majeure events.

6. Enhanced Financial Transparency and Supervision

The Vietnam Trade Union must now report its financial activities to the National Assembly and undergo audits by the State Audit Office. Corporate trade unions are required to disclose financial information to employees annually.

Employees’ organizations (which operate independently from the Vietnam Trade Union system) are entitled to receive a portion of the trade union fees collected, based on membership numbers and future regulations.

7. Reorganization of the Vietnam Trade Union Structure

The 2024 law officially incorporates grassroots professional associations—organizations for workers without direct labor contracts—into the Vietnam Trade Union system. The union is now structured into four levels:

Central Level – Vietnam General Confederation of Labor.
Provincial/Sectoral Level – Includes federations of provinces, cities, economic groups, and large corporations.
Intermediate Level – Includes district labor federations and unions for industrial parks and economic zones.
Grassroots Level – Comprises grassroots trade unions and grassroots professional associations.

8. Commitments to International Labor Standards

Vietnam’s new law moves closer to global labor standards, reflecting commitments made under free trade agreements like CPTPP and EVFTA. Vietnam is expected to ratify ILO Convention No. 87 on Freedom of Association and Protection of the Right to Organize, further strengthening labor rights.

9. Stronger Collective Bargaining Mechanisms

The law enhances collective bargaining processes, ensuring that negotiations between employers and employees are more transparent and effective. Businesses must now engage in more structured dialogue with labor representatives to avoid disputes.

Vietnam’s Trade Union Law: Implications for Businesses

The new trade union law presents both challenges and opportunities for businesses in Vietnam. Key considerations include:

Compliance Obligations: Companies must ensure they comply with the new legal framework, which includes adjusting workplace policies, updating labor contracts, and engaging in constructive labor relations.
Increased Negotiation Complexity: With the rise of independent unions and stronger collective bargaining rights, employers will need to invest in more structured labor-management dialogues.
Greater Labor Dispute Risks: The legal reinforcement of workers’ rights may lead to an increase in labor disputes or strikes, making proactive engagement and dispute resolution strategies essential.
Impact on Foreign Enterprises: Foreign businesses operating in Vietnam or hiring local workers must stay informed about these changes to mitigate compliance risks and avoid potential legal challenges.

Employers operating in Vietnam must adapt to these new regulations to ensure compliance and foster positive labor relations. The changes may lead to increased costs due to additional financial contributions and compliance measures. Businesses should also expect a shift in workplace dynamics as worker representation strengthens.

Navigating the Changes of Vietnam’s Trade Union Law with an Employer of Record (EOR) Service

For companies looking to expand into Vietnam or navigate the evolving labor landscape, partnering with an Employer of Record (EOR) service can provide significant advantages. An EOR helps businesses remain compliant with Vietnam’s labor laws, handle employment contracts, payroll processing, and manage employee relations effectively.

With the implementation of the new trade union law, having an experienced EOR partner ensures that businesses can operate smoothly while adhering to local regulations. This minimizes legal risks, streamlines HR processes, and allows companies to focus on their core operations.

Conclusion

Vietnam’s updated trade union law represents a major shift in the country’s labor environment, offering increased protections for workers and new challenges for employers. Businesses must adapt to these changes by ensuring compliance, enhancing labor relations, and proactively managing potential disputes. For companies seeking a seamless entry into Vietnam’s market, leveraging an Employer of Record service is a strategic solution to ensure regulatory compliance and efficient workforce management.

Contact us today to learn how our EOR services can help you navigate these changes. Check our services here or book a free consultation now.

Photo by Steve Douglas on Unsplash

Author

Zofiya Acosta

Zofiya Acosta is a B2B copywriter with a rich background of 6 years as a professional writer. She has honed her craft in the dynamic writing field, beginning as an editor for a lifestyle publication in the Philippines, giving her a unique perspective on engaging diverse audiences.

Reviewer

Chris Alderson MBE

Chris Alderson is a seasoned CEO with over 25 years of experience, holding an honours degree from Durham University. As the founder and CEO of various multinational corporations across sectors such as Manufacturing, Research & Development, Engineering, Consulting, Professional Services, and Human Resources, Chris has established a significant presence in the industry. He has served as an advisor to the British, Irish, and Japanese governments, contributing his expertise to international trade missions, particularly focusing on global expansion and international relations. His distinguished service to the industry was recognised with an MBE (Member of the Order of the British Empire) awarded by Her Majesty Queen Elizabeth II.