In the context of a rapidly growing economy, building a stable and harmonious working environment and protecting the rights of employees is a matter of concern for every enterprise. One of the important solutions to achieve this goal is to establish a primary trade union. However, in practice in many businesses, both employees and employers do not clearly understand the benefits and roles of trade unions, leading to the failure to establish a primary trade union. This article shares some of the benefits of establishing a primary trade union in a business. 

1. Obligation to pay union fees of enterprises even if they do not establish a primary union 

According to Decree No. 191/2013/ND-CP and the Law on Trade Union 2012, even if a business does not establish a primary trade union, the employer must still pay a trade union fee equal to 2% of the salary funds based to pay social insurance for laborers (SI) to the higher-level trade union. This fee is paid to the direct higher-level trade union to serve the activities of protecting the legitimate rights and interests of employees nationwide. Thus, even if there is no primary trade union organization, the business must still fulfill its financial obligations related to the trade union. 

In case of failure to pay union fees, the employer will be fined from 18% to 20% of the total amount of union fees payable at the time of the administrative violation record, but not exceeding VND 75,000,000 for the employer who fails to pay union fees for all employees subject to payment. 

Regarding remedial measures, no later than 30 days from the date of the penalty decision, the employer must pay to the trade union organization the amount of union fees that are late,  partially paid or unpaid and the interest on the amount of union fees that are not paid or not paid at the highest interest rate on demand deposits announced by state-owned commercial banks at the time of the penalty for the violation of the regulations. 

2. Maximize the efficiency of union dues use when establishing a primary union 

When a company establishes a primary trade union, in addition to the 2% of the salary fund contributed by the company to pay social insurance, employees participating in the trade union will pay an additional union fee equal to 1% of the salary used as the basis for social insurance. However, when a primary trade union is established, the primary trade union is allowed to use 70% of the total union fee revenue (70% of the 1% contribution paid by employees) and 75% of the total union fee revenue (75% of the 2% contribution paid by employers). 

This money can be used to: 

• Improve employee welfare, organize activities to enhance spiritual life and corporate culture. 

• Support workers in difficult cases, work accidents or sickness benefits. 

• Training and improving skills for workers, helping them develop in a stable working environment. 

• Participate and enjoy support policies from the Vietnam General Confederation of Labor for primary unions. 

Retaining these fees and union funds helps primary unions be more proactive in organizing programs and activities that directly benefit employees in the enterprise. 

3. Convenience in consulting when handling labor discipline and building labor usage plans 

Another important benefit of establishing a primary trade union is that when the enterprise needs to deal with issues related to employees, it becomes easier to consult with the collective labor representative. According to the provisions of the 2019 Labor Code, when developing a labor use plan (when restructuring or rearranging labor) or handling labor discipline, the enterprise is required to consult with the organization representing the employees. This organization is the primary trade union or another organization established by employees at the enterprise. Without the opinion of the organization representing the employees, handling employee discipline or restructuring labor will risk being considered illegal and the employer will face the risk of having to pay compensation if the employee sues.  

However, in case the enterprise does not have a primary trade union and does not have any other organization established by employees, who will represent the employees? 

Some argue that in this situation, the enterprise must seek the opinion of the higher-level trade union to ensure compliance with the law. However, since the 2019 Labor Code took effect, the higher-level trade union has no longer participated in giving opinions on labor issues at the enterprise. Therefore, even if the enterprise invites the higher-level trade union, there is no legal basis for the higher-level trade union to participate in giving opinions.  

In practice, the author is not clear about the court’s viewpoint when resolving labor disputes related to this situation, so this will be a risky situation for businesses when there is no detailed legal guidance document. 

Thus, establishing a primary trade union not only helps businesses optimize union funding sources and ensure the rights of employees, but also creates favorable conditions for employers’ labor management activities. 

NGUYEN Minh Tien David, Partner