The Challenge from Below: Wildcat Strikes and the Pressure for Union Reform in Vietnam

By Quynh Chi Do[1]

Abstract

Despite radical revisions of labour legislation in the last two decades, the official trade union of Vietnam (VGCL) had remained largely unreceptive to change until the recent explosion of wildcat strikes. This paper examines the nature of recent wildcat strikes in Vietnam with a focus on how they are organised, why they have become increasingly prevalent, how the patterns of strikes have changed, and their impacts on the labour regime, in particular on the VGCL. The key finding of this paper is that the wildcat strikes have grown both in terms of quantity and sophistication due to the leading role of team leaders and skilled workers, the informal supportive network of workers in the factories and the community, and particularly, the pro-labour responses of the state and civil society to strikers. Though wildcat strikes have posed the biggest challenge for the VGCL to act more like a member-representative union than a State organisation, its conflicting mandate and subordination to the Communist Party remains a major obstacle to any serious union reform.

Introduction

The 1995 Labour Code marked the historic transition ‘from command to market’ of the industrial relations system of Vietnam. With the passage of the legislation, strikes have grown so steadily that they are taken for granted by the authorities as a feature of the market economy rather than exceptional events. Yet, in the first ten years after 1995, while the number of strikes averaged 100 per year, they had little impact beyond the affected enterprises. The last four years, however, observed a shocking surge in labour conflicts which have been organised in coordination across companies, creating waves of strikes that boldly challenged the existing national institutions.[2]

Despite recent attempts to assert its independence of the government by publicly counter-arguing the former’s policies,[3] the Vietnam General Confederation of Union (VGCL) – the only official trade union organisation in Vietnam – still consistently operates under the Communist Party’s leadership. At the central level, the Central Party Committee usually makes the final approval stamp on major union policies and personnel appointments. At the workplace, the functions of the trade unions have seen minimal changes from the past. The role of enterprise unions, as promoted by the authorities, is to act as ‘the bridge of communication’ or a mediating body between employers and workers rather than the representative of workers’ interests in opposition to employers.[4] Unsurprisingly, none of the strikes in the last 13 years was organised by the official unions. As the enterprise unions are unable to go beyond their intermediary role towards representing workers in negotiating with employers, ‘collective bargaining by riot’[5] has become the only method by which workers defend their rights and interests.

Industrial conflicts are not new to East Asian economies. Malaysia, Singapore, Taiwan, the Philippines and South Korea all faced massive labour protests in their early stage of industrialization when the economies relied on low-cost, labour-intensive production. However, despite a high level of militancy, East Asian workers have not been able to influence the policy decisions directly related to them. As Deyo [6] bitterly found: “no where – not in their workshops, firms, communities, or governments – have workers been able to influence the political and economic decisions that shaped their lives”. The transformation of

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industrial relations in East Asian countries is mostly attributed to changes in industrialization strategies or specific national politics[7, 8] while the voice from workers below played an insignificant role in the policy-level decisions.

Recent studies on industrial relations in Vietnam, particularly those in comparison with China, have shown that Vietnamese labour has effected a much more significant impact on the transformation of the national labour regime. It is possible to explain this divergence from the tradition of other East Asian economies by the spontaneous solidarity and organisational strength of Vietnamese rank-and-file workers and the pro-labour approach of the State and the Party to strikers [3, 9, 10]. This paper will contribute to this emerging literature by arguing that the increasing scale and sophistication of wildcat strikes and the tolerant responses of the State and civil society to these informal industrial actions have had more impact on the official trade union than any legislative or institutional factors. Nonetheless, a fundamental union reform remains obstacled by the union’s conflicting mandate and its subordination to the Party.

The study is based on the initial findings of a three-year project[11] on the transition of labour movements in three post-socialist countries, Russia, China, and Vietnam. In Vietnam, the project has conducted 10 case studies on various aspects of industrial relations such as labour-management relations at the shop floor and enterprise level, the interactions among unions at different levels, impacts of wildcat strikes on labour policies, the relationship between the union, the State, and the Party, among others. The project’s research in Vietnam was supported by around 50 in-depth interviews with key actors including the labour authority, regional governments, employers’ associations, the mass media, the ILO and the union carried out at different points in time from 2006 to 2008. The paper is also informed by the author’s visits to 20 factories systematically conducted since 2004.

The Internal Structure of Wildcat Strikes

Wildcat strikes have become the central issue of Vietnamese industrial relations in the last five years. According to the official statistics of the VGCL, there were over 1,900 strikes reported from 1995 to 2007, and over 1000 strikes from January 2007- July 2008. As can be seen in Figure 1, strikes abruptly exploded in early 2006 and peaked in 2007 with 541 strikes involving over 350,000 workers.[12] As of August 2008, more than 400 strikes have been tallied. Strikes occurred first and foremost in the foreign-invested enterprises in labour-intensive manufacturing industries such as textile-garment, footwear, wood processing, electronics, and seafood processing (Figure 2).

The manufacturing sector is playing the central role in the industrialisation process of Vietnam, contributing an average of 20 percent of GDP and over 40 percent of export volume. Yet, if taking labour turnover and strikes as indicators of industrial conflicts, the manufacturing industries have faced the most serious problem. According to our informants from about 20 companies in different manufacturing industries, including footwear, apparel, or electronics, the average labour turnover ranges from 40 to 60 percent. 78 percent of strikes in the first 8 months of 2008 occurred in manufacturing companies (VGCL strike statistics update). In terms of location, over 80 percent of strikes have occurred in Ho Chi Minh city, Binh Duong, and Dong Nai – the three most industrialized provinces in the South of Vietnam (Figure 3). Yet, there are signs that strikes are spreading to the central (Da Nang) and northern provinces (Hai Phong, Hai Duong, Ha Noi).

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Figure 1: Trend of Strikes in Vietnam, 1995-2007

0100200300400500600

Year

Strik

es

Figure 2: Percentage of strikes in Vietnam by Enterprise Ownership, 1995-20074.7%

26.1%

69.2%

SOEFDIPrivate Vietnamese

Figure 3: Percentage of strikes by Location, 1995-2007

21.7%

26%

34.9%17.4%

Ho Chi Minh city Binh Duong Dong Nai Others

However, though work stoppages are the most dramatic and disturbing form of industrial conflict for the general public and the State, they are not the only expression of labour-management dispute. Other varieties of conflict with the employer may also take the form of

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absenteeism, personnel turnover, grievance handling, or sabotage (Kerr 1964 p171). Sometimes, workers express their dispute with the employer by one form of conflict rather than others but in many cases, the disputes are conveyed through a combination of different types of industrial conflicts. In other words, strikes are just part of a continuum of behavior of workers in dispute with their employers. As Kornhauser et al. suggested:

A true understanding of industrial strife … demands consideration of related, less-spectacular manifestations as well… The general object of study is not the labour dispute, the strike or the lockout but the total range of behavior and attitudes that express opposition and divergent orientations between industrial owners and managers on the one hand and working people and their organisations on the other (1954 pp. 12-13).

Therefore, rather than focusing on wildcat strikes only, it is necessary to place them in relation with the behavior that leads to and that which results from them. Given the high concentration of strikes in manufacturing industries, this section will focus on employment relations at manufacturing factories and workers’ communities in an attempt to explain the internal organisation of ‘unorganised’ labour conflicts in Vietnam.

Employment Relations in Manufacturing Factories

Almost all manufacturers, domestic and MNCs alike, apply a Fordist mode of production, using low-skilled labour in assembly production. They normally recruit young graduates or even drop-outs from high school migrating from the rural areas. These unskilled workers would receive training for one to three months, mostly on-the-job training provided by more experienced workers. Then, workers would be assigned to different assembly lines with simple and monotonous work.

Workers are paid either by piece rate or on a time basis. As the employers set the basic wage rate for both piecework and time base at an extremely low level (equal to or slightly higher than the minimum wage), workers usually have to take on plenty of overtime work and cut off their annual leave to ensure a living income. As seen in table 2, overtime payment and allowances account for one third of the total income of a worker.

Table 2: Wage composition of a manufacturing worker in HanoiBasic salary 67.4%Allowances (travel, attendance) 6.3%Overtime payment 22%Performance Bonus 4.3%

They also face with significant work intensification. For instance, workers who fail to keep up with the working pace in garment assembly lines are criticized on the factory loudspeaker, which leaves a lasting mental effect on workers and creates tension among line members:

No one likes to hear their name on the loudspeakers. It became a scary thing for us. I still woke up in the middle of the night, sweating when in dreams I heard my name from the loudspeakers. We also had a lot of tensions among ourselves because if a worker makes a mistake in the previous part, she will slow down the workers in the later parts. Quarrels and fights happened all the time. A

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worker in the later part would slash at the worker in the previous section if the latter makes a mistake. They even threw cloth at the other’s face (Interview by the author with a garment worker in Hanoi, 28 May 2008)

Migrant workers find themselves under pressure to swiftly adjust to the industrial disciplines, particularly in foreign companies. A worker in a footwear company in Ho Chi Minh City complained that they had to remember 99 work rules and violation of these rules results in either loss of bonus or dismissal.

Management’s common approach to labour relations is authoritarian. A union is often avoided or, if set up, the management would ensure that only their most loyal employees become union leaders. And there are deadly loopholes in the union election rules and procedures that enable the management to manipulate the union election outcome. First, in preparation for the appointment of a provisional union board, the higher-level unions (district or EPZ unions) have to rely on the HR department to make a list of candidates. A union official explained:

We have no idea about the people in the company, who can be union leaders; therefore, we have to ask the HR manager to do it. Any way, it is only the provisional union, not the official one.(Interview by the author with an officer of Binh Duong EPZ union, 3 March 2006).

It is understandable, therefore, that only the candidates favoured by the management are nominated for union posts. The first union election, in which workers are supposed to be able to choose their union leaders, is organised six months after the establishment of the provisional union. It is a common practice that the union would consult the management on the candidature and it often happens that the list is revised if the former opposes certain nominations. Then, the management (often the director or HR manager) is invited to attend the union election and his/her appearance alone is sufficiently intimidating for workers who want to nominate their favoured candidates beyond the approved list. Even worse, there is no monitoring mechanism maintained by the higher-level union to ensure that the union elections are organised in accordance with the rules set by the Union Constitution. Sometimes, the higher-level union officials are invited to attend union elections but if they can not make it, which is the more common case due to shortage of union personnel and resources, a report on the election result is all they require. In the absence of a monitoring mechanism, many enterprises even ignore the whole election procedures and a union is born out of an informal agreement within the management. The functions of enterprise unions include providing welfare benefits (allowances for sickness, marriage, and maternity), if any, to workers and sealing the approval stamp on the management’s decisions of discipline, dismissal, or overtime schedule. It is not an exception for managers to become union leaders. The employers’ manipulation of union elections and the union’s subordination to the management deprive trust of workers from their so-called representatives. When asked why they did not refer their grievances to the enterprise union before walking out, a worker burst into laughter:

Are you kidding? He [union chair] is a manager. If I open my mouth, the next day I am gone. And you know who would sign my dismissal decision? The union vice chair who is also the HR manager.(Interview by the author with a worker, March 2006)

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In privatised SOEs, the pressure to compete in cost with other private and foreign-owned firms has made these companies shift from the traditional paternalistic HR policy typical of SOEs in the command economy to the authoritarian model. The enterprise unions in these companies, which often remain an integral part of the management, fail to establish their connections with the new generation of workers nor represent them in negotiation with the employers. A worker described her union leader as follows:

I never met her [the union chairwoman]. She was only in her office and never came to our factory. I knew her name just because I saw her signature on the union announcements posted on the notice board.(Interview by the author with a garment worker, May 2008)

Surrogate trade unions: The role of team leaders

When the official unions fail to represent members’ interests, workers would pick up informal leaders among themselves. As experience in other countries shows, in Fordist factories, supervisory (team leaders) and/or experienced workers would naturally emerge as workers’ leaders (Hyman 1975; Donovan Commission Report 1965; and Chan 2008). In manufacturing factories, workers are grouped into teams of eight to twenty headed by team leaders. Team leaders have enormous influence on workers. They make decisions on task assignment within each team, deal with minor technical problems, control production quality of the team and each worker, make performance evaluation of workers, handle workers’ grievances before transferring them on to the higher level management. For workers, the team leader is even more influential than managers:

A team leader, for us, is more powerful than a manager because if a team leader does not like a worker, she can assign her to a more difficult job or downgrade the performance evaluation of that worker from A to B. (Interview by the author with a worker at a Sumitomo Bakelite Vietnam, May 2008)

A company’s policy toward team leaders directly affects their relationship with team members. When team leaders are treated as workers and their wages and benefits are not differentiated from workers, they tend to stand on the workers’ side. In the East Asian MNCs we visited, team leaders are promoted from workers. They receive similar wages to workers’, except for the position allowances. These team leaders tend to be closer to workers and actively act as the representatives of workers in relation to the management and the union. An enterprise union leader told us:

When the company is going to revise wages, we have to go to each team, explaining to team leaders…Once the team leader understands, we can be sure that she will explain to the workers. If we can persuade the team leader to agree with the new rate, workers in the team will follow.(Interview by the author, May 2008)

A common policy among domestic companies toward team leaders (which has been adopted by many foreign-invested companies as well) is completely different. Team leaders are treated as managers with better job security and allowances. While workers are paid on piecework, team leaders receive a fixed monthly salary. Apart from the fixed salary, team leaders also receive a productivity bonus that makes up 30-40 percent of their income. The

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productivity bonus is calculated on the basis of the team’s overall productivity. This policy places team leaders’ interests in opposition to workers’: the harder workers work, the higher bonus team leaders enjoy. In the former case, the team leader becomes a part of the team, working in solidarity with workers; whereas in the latter, s/he separates from other team members, supervising them from above. Expectedly, as our research points out, team leaders in the first cases often become informal workers’ leaders while those in the second ones spy on workers to report to the management.

Team leaders who are workers’ informal representatives often maintain a network with each other to exchange information and enable them to coordinate collective actions. A union leader observed:

I think two or three team leaders are organisers [of strikes]. They maintain constant contact with one another and with key workers in all workshops. When they need to discuss something, words can be passed on quickly during lunch, breaks, or after work. (Interview by the author with the union leader of Carimax Saigon, March 2006)

Evidence proves that this type of underground coordination has been extremely effective. Following is what a female worker told us about how they were able to produce 1,200 written complaint letters on a wage increase in just one night:

That was when the company announced the new wage increase. The raise was too small. If a worker gets D (the lowest level of performance evaluation), she will receive only five thousand dong more. Working for one year and get just five thousand dong. Everyone was angry. We saw messages written on the toilet walls that we should write complaints to demand for higher wages; if they [the management] do not agree, it says that we should go on strike. So we started talking to our team leaders. The team leaders discussed among themselves then they told us that we should write and file complaints in one night only to make sure that the production is not affected. That night, my team leader gave us a sample complaint and we all wrote our own complaints. But she did not write complaint because she did not want to be affected. Then, she brought all complaints to the HR department. (Interview by the author with a female worker at Sumitomo Bakelite Vietnam, June 2008)

Though the team leaders tried to avoid the management’s suspicion against them by not joining workers in writing complaints, their vital role in organising and coordinating the collective action is undeniable. It is extremely difficult for workers without team leaders’ support to wage collective actions because they not only lack effective leaders but also find themselves vulnerable to being disclosed by their team leaders. However, the probability of industrial actions will be higher when workers of these companies are encouraged by the victory of strikes in neighbouring companies. In this situation, only leaflets calling for a collective action or rumours from friends working in other factories that have benefited from strikes would easily ignite a wildcat strike. As our research found out, the people behind the contagious flame of wildcat strikes are often more skilled and experienced workers who are well-informed about strikes in other companies and enjoy a better position in the labour market. A female worker who fearlessly claimed that she produced the strike leaflets and called the authorities to come for settlement said:

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Worker: My sister is working at the Linh Trung industrial zone and she said that they all went on strike there and got better wages. The management here is harsh but I know how to deal with them. I copied leaflets and left them in the toilets. Workers supported and we all walked out. When the strike broke out, I called the labour department because we trust that they would help us sort these things out. Researcher: Were you not scared of being dismissed? Worker: Other workers are scared, I am not. I have been working for 6 years so I can find a job anywhere else. The company needs workers like me. (Interview by the author with a worker at TRF, Ho Chi Minh city, March 2006)

Community of Migrant Workers

Before 2005, dormitories for workers were extremely limited. According to the VGCL Center of Labour and Workers, the dormitories of industrial parks in the whole country could accommodate merely 2 percent of migrant workers. After 2005, when workers started to walk out more frequently, the lack of accommodation for migrant workers became a serious concern for the union and the authorities. In the annual meeting between the Prime Minister and VGCL in early 2007, the Prime Minister required the investment and planning authority to provide investment incentives for enterprises to build dormitories for their workers. In Hanoi, the city authority has just finished the first dormitory for workers in the Thang Long Industrial park. However, living in the dormitories is not a prime choice for workers in the industrial zones. First, though the rent is slightly cheaper than outside, workers are strictly controlled in terms of time they can get in or out of the dormitories and they have to report to the guards if they take friends to their rooms. Most workers, therefore, opt for accommodation outside.

Migrant workers often concentrate in certain villages close to their factories. These villages are called workers’ villages (làng công nhân). Normally two to three workers would live in a room of 10-15m2 that costs 20-30 dollars/month. Each landlord maintains 10-20 such rooms built on their yard, offering two bathrooms for all tenants. Cooking is done inside each room. A worker may choose to share a room with workers in the same company or those who come from the same province.

Living in such concentration, workers know exactly how much other companies in the same industrial zone are paying. The workers’ village has facilitated the growth of an informal network among migrant workers which would easily create a knock-on effect in case of a strike. This explains why workers in the industrial zone were able to initiate waves of strikes in the last few years. The white-collar workers and managers either live downtown or rent houses in more affluent suburbs. Understandably, union leaders who are white-collar or managerial staff do not share the same community with workers and detach themselves from this crucial network of cross-company information and coordination.

Workers of companies located outside of industrial zones, however, do not live in such concentration. Industrial zones are located in unpopulated areas in suburbs far away from the city centers. They are surrounded by agricultural villages where peasants have land to build a large number of rooms for rent. Companies outside the industrial zones are located in different suburbs of the city where the shortage of rooms for rent does not allow workers to live in a large community like the workers’ village. Therefore, though strikes may happen

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here or there among these companies, it can hardly initiate a knock-on effect that turns into a wave of strikes like those in the industrial zones.

Wildcat Strikes, Strike Waves, and Labour Turnover

Strikes are workers’ strategic reactions to the actions of other social actors[13]. In Vietnam, wildcat strikes resemble a response of workers to the rights-based institutional forms of regulation of industrial relations established in the early stages of reform, which have proved slow to adapt to the new circumstances in which disputes are interest-based (Clarke et al. 2007). Prior to 2005, weak labour inspection and the high demand for attraction of foreign investment of local authorities resulted in pervasive violations of labour rights including avoidance of signing labour contracts, evasion of social insurance contributions, paying workers under the legal minimum wage, excessive overtime work, among others. Strikes before 2005 mostly occurred over these right-based causes. However, there has been a transition in workers’ strikes from protection of legal rights to improvement of their working conditions (ILO Discussion Paper, 2005). As a labour official of the union federation of Ho Chi Minh city expressed it: “previously, workers went on strike for their legitimate rights but now the situation has changed. They organised strikes to demand better meals, higher wages, less overtime work, and better working conditions”.[14] This trend of transition in the essence of strikers’ demands is shown vividly by the statistics: in 2004, the interest-based demands were causes to 20 percent of all strikes; in 2007, this figure was quadrupled to 79 percent. Obviously, wildcat strikes are not only the spontaneous expression of workers’ discontent about the employers’ violations, they have become the most effective and the only working mechanism for them to bargain for higher pay and better working conditions.

A typical scenario of a wildcat strike would start with the dissemination of strike calls. A few days before the strike, the call for strike can be found on toilet walls, in leaflets scattered around the company, or simply a spread of word. Workers would suddenly stop working and gather outside the enterprise facility. Strike leaders do not show up. Informed by the employer concerned, the district labour authority official, often accompanied by the district union, rushes to the enterprise. They talk to workers on strike to gather workers’ grievances and demands. The police often appear at the strike scene but take no suppressive action. The labour and union officials (or the strike taskforce) would negotiate with the management on the demands. Once the management accepts a part or all of the ‘legitimate’ demands of workers presented by local labour official (on behalf of workers on strike), workers would go back to work - often being paid for their time off during the strike - and the strike situation would end. [15]

The traditional technique of negotiation of the strike taskforce was to find out the legal violations of the management and use them as a weapon to force the management to accept the interest demands of workers. This negotiation method received a lot of complaints from both the employers and international organisations as it eliminates the motivation for workers to negotiate with the management. Particularly, when strikes spread to Japanese companies which comply strictly with the legislation, the traditional technique became futile. Now, the labour officials would require the employers to immediately recorrect their violations, if any, and leave the district union which represents workers to negotiate with the management on interest demands without any visible intervention.[16] Consequently, the new method of strike settlement has prolonged the length of strikes. From an average of several hours to one day, a strike in 2008 lasted for three to five days. The longest strike that occurred in Hue Phong company in Ho Chi Minh city took 25 days to be settled .

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While a strike challenges the management and can be settled within an enterprise, a strike wave is the symptom of malfunctioning institutions of industrial relations. The existing industrial relations institutions in Vietnam create no working mechanism for workers to negotiate with the management at the enterprise; particularly when the unions can hardly perform their representation function.

The first wave of strikes exploded in December 2005 and lasted for a month with 150 strikes, involving 140,000 workers. Workers on strike demanded the adjustment of the minimum wage that had not been revised since 1999. The low minimum wage had acted as a legitimate excuse for employers not to raise wages. The strike wave shocked the State and the outcome was a governmental decree that raised the MW by 40 percent.[3] The victory of the first strike wave asserted the possibility of workers to influence national labour policy. After the first wave of strikes, three more waves happened, often before or after Tet when companies ran into serious shortage of labour while facing a peak of production orders. The second wave happened in the first quarter of 2007, particularly in March, with 83 strikes, involving 54,000 workers. The third one exploded in the first two weeks of October 2007 with 88 strikes, involving over 100,000 workers.[17] And the last one evolved in the first quarter of 2008 and continued until July 2008 with 649 strikes.

In Vietnam, strikes and strike waves often go in parallel with waves of quitting and high labour turnover. As Edwards and Scullion (1982) suggested, quitting is a form of industrial conflict if we put it into the context of unsolved workers’ grievances. Workers’ discontent was not born during a strike but originated and accumulated from the coercive day-to-day labour process[18]. Despite successful wildcat strikes that immediately addressed the economic demands of workers, they produced no associational power for workers to handle other work-related grievances that can not be expressed via specific strike demands. Harsh discipline, the management’s disrespect of workers, hostile working environment, intense productivity pressure, and dim prospects for training and promotion, all contribute to workers’ frustration in their jobs and their determination to seek for a change. Therefore, though wildcat strikes forced employers to raise wages, they could not remove the discontent of workers embedded in the labour process. In Vietnam, labour turnover in manufacturing industry runs as high as 40 to 60 percent, which is exacerbated by huge waves of quitting after strikes.

Quitting is an individual decision but when hundreds of thousands of workers opted for the ‘exit’ after ‘voice’ option (Hirschman 1970), it has become a collective action. As the labour market gets tighter, employers find themselves in a fierce competition with other companies to recruit enough workers for production. Our research finds that the trend of labour shortage in industrialized regions in Vietnam tends to become acute. Among the 20 companies that informed this research, two-thirds still lack from 200 to 3,000 workers and there is little possibility that they will be able fill this labour gap in the short run. Regional labour shortage is attributed partially to the emergence of industrial parks in the smaller provinces attracting the local labour and particularly to the fact that migrant workers are turning away from the industrial sector to join the booming service sector. The service sector of Vietnam is dominated by small-sized enterprises and household businesses which offer better pay than the industrial sector but often neglect social insurance obligations. Almost all workers in the manufacturing factories I interviewed expressed their intention to quit their current jobs in the near future. Some wish to further their study and training to find a skilled or office job,

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others want to work for service businesses in the cities. A worker who recently quit a garment company to work for a restaurant explained her decision:

In the restaurant, I have to work for long hours; I do not have social insurance either but I prefer this job to the one in the factory because payment is better and the working atmosphere is friendly. My colleagues at the restaurant are very nice and we do not have to work under pressure like at the factory. (Interview by the author with a worker of Garco 10, Hanoi, 25 May 2008)

Though this trend needs further research and evidence to be confirmed, it signals the start of a structural shift of the economy from mass production to technology-intensive production in the footstep of other regional countries like Singapore, Malaysia, and South Korea.

The Challenge from Below and Union Reform in Vietnam

The impacts of wildcat strikes did not reach the VGCL directly as strikes exploded but it was amplified and transferred through two major channels: the labour press and the regional authorities. When the Government and the Party were shocked by the strike waves, they place an influence on the union organisation to take action in response. This section will start with discussing how the wildcat strikes have been mediated by the press and the regional authorities before they became a challenge to the State and the union.

The PressThough it has long been argued by scholars that the media content in Vietnam is dictated by the State, the boundaries of what is permissible have been expanded significantly in the last decade[9]. The press has actively taken part in the investigation of corruption cases and reflected the darker side of the society – things that they were not allowed to touch upon before Doimoi. In the labour field, the press has been active in reporting the plight of workers, especially those employed in the foreign-invested sector, from corporal punishment of Vietnamese workers by foreign managers in the 1990s to wildcat strikes in the last five years. The most prominent labour newspapers that effectively set the tone for the media in covering labour issues are ‘Labour’ and ‘The Labourer’ – both controlled by the trade union. As Tran (2007a and b) showed, the two labour newspapers have created public forums and effectively pushed the state and labour unions to respond to demands of workers on strike. During the first wave of strikes in early 2006, the two newspapers delivered the most updated coverage of strikes which were backed up by interviews with VGCL leaders who supported workers and urged the Government to raise the minimum wage.

The intensive pro-labour coverage of strikes by the labour press has created enormous public attention towards workers’ plight and their demands. The huge attention to the problems of workers became an invisible pressure on the State to take prompt action in response. A series of new measures has been made by the Government and the Party to meet workers’demands as reflected by the labour press. For instance, the Government raised the minimum wage twice after the first strike waves: the first time in early 2006 and the second time in January 2008. When the press ran stories about migrant workers living in overcharged, poor-quality accommodation, the Government required provincial authorities to support employers in developing dormitories for workers. When the press pointed to weak enforcement as the major cause of pervasive violations by employers of labour rights, the Government approved the long-standing proposal of MOLISA to increase the number of labour inspectors. In Ho

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Chi Minh city, for example, the number of labour inspectors has been raised from 7 to 100 since 2006.

The labour press, however, has received criticism because their one-sided coverage of workers as victims and employers as exploitators has somehow encouraged workers to go on strike. As an employers’ organisation official put it:

Not all employers violate the law. Workers go on strike because they want to negotiate for higher wages. But the press made readers think that employers are always the villains. This is bad for the investment climate” (Interview by the author with Mr Huy, VCCI, 5 December 2005).

Recently, the two labour newspapers became suddenly quiet on the strike issues. Particularly during the last strike wave in the first half of 2008, instead of daily coverage of strikes, the two newspapers focused on social campaigns and the preparation for the national union congress. Together with the stricter control of the media after the arrest of two reporters on the PMU18 scandal[19], the State requested the labor press “to cover objectively and honestly the implementation of the Party advocacy on international economic integration and FDI attraction and to avoid one-sided information that may create negative reactions in industrial relations and among the public” (Resolution 22 by the Party Central Committee, issued on 5th June 2008).

The Regional Authorities

Attraction of foreign investment to increase provincial revenue is one of, if not the most, prioritized task of the provincial authorities. As a prominent Vietnamese economist put it: “Provincial revenue is the most important indicator of success and power of all provinces. It is their primary target”[20]. As a result, wildcat strikes and waves of quitting pose a great concern for the local governments because they harm the investment climate and adversely affect investors. At the same time, the provincial governments are under pressure from the national government to maintain social order in their localities. The common approach of the local governments to wildcat strikes has been to give concessions to workers at first to end strikes as soon as possible then use its administrative apparatus to prevent further strikes while reporting to the national government for support.

After the first strike wave broke out on 28 January 2005, the HCMC People’s Committee decided to set up a steering committee on strike settlement headed by the then-deputy chairman of the city authority, Nguyen Thien Nhan, because strikes had gone out of control and threatened “to seriously affect the investment climate if employers [of strike-hit enterprises] lose their orders and have to close down their companies” [21]. The committee comprised representatives of all departments, including the trade union and other mass organisations like the Youth League, Women’s Union, among others. On 4 January 2006, one day after the steering committee was set up, Nguyen Thien Nhan held a meeting with 40 employers at Linh Trung industrial zone and committed to “ending sabotage and trying all means to stop strikes by Sunday the 8 January, and working out measures to share the compensation for companies’ loss due to strikes”[22]

In order to end the strikes swiftly, one of the major solutions by the HCMC authority was to satisfy workers’ demand – which was to increase the minimum wage. First, the HCMC union was asked to report to the VGCL and urge the national union to request the Government to

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raise the minimum wage. Then, the city people’s committee sent a proposal to the Prime Minister asking for adjustment of the minimum wage.

FDI is not only the indicator of power and success of a province, it also strengthens the province’s bargaining power in its relations with the central government and has a powerful and robust impact on the de facto decentralization from the central economic policy.[23, 24] The most strike-hit provinces including HCMC, Dong Nai, and Binh Duong are the biggest attractors of FDI in the country. The authorities of these provinces undoubtedly have enormous impact on decision-making at the national level. The proposal on the increase of the minimum wage in 2006 by the HCMC authority was the final most important push to the central government to nod at a 40 percent increase of the minimum wage after a long hesitation.

On the other hand, as Malesky (2008) proved, the concentration of foreign investment goes in line with the bargaining power of provincial leaders to pursue initiatives outside of the central law. For instance, the authorities of strike-prone provinces initiated their own measures beyond the law to address strikes in their provinces. Ho Chi Minh City organised migrant workers in self-managed teams to improve the union’s approach to workers so as to prevent strikes. The Federation of Labour of Dong Nai initiated a round of consultation on wages with foreign investors’ associations which resulted in a reduction of strikes in 2008 in these companies. Da Nang prevents strikes by setting up ‘core workers’ groups’ which are consisted of team leaders and experienced workers who contact directly with the district unions whenever there are signs of a dispute.

The central government maintains a tolerant attitude towards these local policy experiments partly because of their reliance on the revenue generated by these FDI attractors and partly due to their sympathy to the reform attempts of provincial authorities[24]. When these local experiments gained initial success, they were embraced by the central governmens as models for replication. For instance, the success of ad hoc strike taskforces in Ho Chi Minh city, Binh Duong, and Dong Nai in settling wildcat strikes was legalized by the 2007 Labour Code revision. The organisation of migrant workers into self-managed teams in HCMC was praised by VGCL Chairman Dang Ngoc Tung, who recently urged Binh Duong and Dong Nai to adopt the same model.[25]

Apart from the labour press, the governments of strike-hit provinces have become the second channel to transfer strike impacts to the national institutions, including the State and the VGCL. Moreover, not only did the authorities of industrialized provinces push the State to make changes to its policy so as to settle strikes, they have also influenced the direction for the changes undertaken by the national institutions in the face of labour protests.

Worker Activism, the State, and the Union The relationship between the union and the Government, or in a narrow sense, the labour authority (MOLISA) is complicated. On the one hand, the VGCL is responsible for supporting the Government and its Ministries in implementing socio-economic policies. The governmental Decree 133 issued in 1991 and the 2005 Decision number 07 of the Prime Minister provided that the trade union and the labour authority coordinate in the making and implementation of labour-related legislation and policies, compliance monitoring, and grievance handling. The trade union can also apply for financial support from the national and provincial governments to conduct their programs. Also, due to the lack of an enforcement machinery, the union relies on the labour enforcement agency to have its own

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legislation and policies implemented. Recently, for instance, MOLISA and VGCL jointly issued a circular which allows district-level unions to unilaterally set up provisional unions at any enterprises that have operated for more than six months. The enforcement of the circular will be conducted by the labour inspectorate of MOLISA.

On the other hand, the national union plays the role of a quasi-independent industrial relations partner, particularly in promoting wages and working conditions by pressuring MOLISA to raise minimum wages and strengthen labour law enforcement. More often now, the union is found disagreeing with MOLISA at important fora such as the National Assembly. For instance, during the revision of Chapter 14 of the Labour Code, tensions between MOLISA and VGCL ran high due to disagreements on some important points. MOLISA included in the Draft a principle of “no work – no pay” to be imposed on strikers and removed the right to strike in case of right disputes. However, the VGCL argued that paying workers on strike is a good way to heal labour-management relations and to convince them to return to work. Also, since 90 percent of wildcat strikes (statistics provided by the VGCL) were caused by employers’ violations of labour rights, the removal of the right to strike in right-based disputes would deprive workers of their last weapon to fight for their own rights. To lobby for its own proposals, VGCL organized a number of consultative meetings at all levels of the union structure, inviting key members of the National Assembly to union conferences where union members strongly opposed MOLISA’s draft revision. The union’s newspapers ran a series of analytical articles and stories against the labour authority’s proposals. The chairwoman of VGCL vocally defended the union’s proposals at the Cabinet, the National Assembly, and Central Party Committee’s meetings. Eventually, MOLISA conceded by allowing workers in right-based disputes to temporarily stop working (rather than recognizing these actions as “legitimate strikes”) and limited the scope of the “no work – no pay” provision to workers who actively participate in strikes not those who are affected by strikes. But as the law provides no criteria for the distinction between active strikers and affected workers, it is almost impossible to apply the “no work, no pay” provision in practice.

It should be noted that at the provincial level, the union maintains a close relationship with the authorities (the people’s committee). The union has the responsibility to coordinate with other provincial departments to realize the decisions and plans of the provincial people’s committees. An important amount of funding for the provincial union also comes from the provincial budget. While the central VGCL sits in only selective governmental meetings, the provincial union is considered an integral part of the local administration. The concerns of the provincial authority over wildcat strikes, therefore, are directly translated into tasks for the union. On the other hand, the implementation of the union’s initiatives is secured by the power of the people’s committee.

The influence of the local authority on the union is an important force driving decentralization within the VGCL system. The central VGCL shows significant respect for the connection between the provincial union and the people’s committee by giving the subordinate unions considerable freedom to perform local tasks. Decentralization and local autonomy, therefore, have enabled provincial unions to carry out a number of experiments in settling and preventing wildcat strikes. The pioneers in this regard include unions of HCMC, Binh Duong, Dong Nai, Da Nang, Hai Phong and Hai Duong. The HCMC Federation of Labour, for example, initiated experiments in setting up union funds to support enterprise union leaders, and organising migrant workers into self-managed teams so as to approach workers in their communities. The Dong Nai provincial union recently initiated the first

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round of wage negotiation with associations of Japanese and Korean investors in the province, which effectively prevented strikes in these companies in the first half of 2008. According to Nguyen Van Binh, a union official at the legal department of VGCL, “the provincial federations of labour enjoy enormous autonomy to develop and implement their own solutions to the problems they are facing. They have to be active in this regard because they are under constant pressure from the local authority”.

While the Government is more concerned about economic growth, the Party prioritizes political stability. The recent waves of strikes are perceived as a potential threat to the credibility of the Party because the union is subordinate to the Party and the Party is supposed ideologically to be the vanguard of the working class and strikes show that the Party has not done its job of leading and protecting workers. This is clearly stated in the 2007 Vietnam Communist Party Resolution on the Working class:

Since the launch of the economic reform … a large part of the working class has not benefited from the fruits of economic growth as they should deserve … this is partly attributed to the insufficient attention of the Party towards upholding the position of the working class in the new era” (page 2).

The Communist Party has widely regarded itself as originated from the working class. Thus, it will be ideologically and politically dangerous if the Party fails to relate itself to the working class and show its sympathy for workers’ difficulties expressed through strikes. Apart from the above rhetorical attempt to assert the central role of the working class, as a way to sooth the frustration of workers, the most important action by the Party, through the VGCL, is expanding the Party’s membership and influence over the non-public sector – the most strike-affected area. The Party sets a target of “recruiting the majority of workers in the non-public sector as Party members by the year 2020” and “establishing Party cells in all enterprises” [26]. Later, Directive 22 emphasized the role of the union in “containing and limiting the illegitimate strikes” while replicating successful models of Party cells and social organisations in enterprises. It means that the Party is driving the union toward a mandate of peace containment and Party member recruitment among workers. At the provincial level, in a recent decision by the Party Central Committee, the provincial party committee (tinh uy) rather than the national VGCL will make appointment of key union officials. This decision will double the subordination of the provincial unions to the local party committees and diminish their connection with the national VGCL.

In short, while the union’s growing independence from the government promises the tendency for the VGCL to act more like a bona fide union in promoting workers’ interests, its subordination to the Party both at the central and regional level threatens to distract and even obstruct the union’s efforts to reform itself.

Will there be a Union Reform?

The direct impact of wildcat strikes which were mediated and spread by the media, tend to drive the unions, especially the intermediary-level unions (district and provincial) toward acting as a real representative organisation of workers’ rights and interests in negotiation with employers at the workplace and higher levels. When strikes first broke out, the unions played a fire-fighting role together with the local labour authorities (Clarke and Pringle 2008). This measure quickly proved to be less effective when workers were even encouraged by the authority’s intervention and walked out more often and on a larger scale.

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The union, as a result, started to seek preventive measures to help develop sound industrial relations at the workplace. First, the union emphasized increasingly provision of training for union officers. The VGCL funds long-term training for professional unionists, 79% of whom work at provincial unions, but there is no regular budget allocation from the VGCL for the training of primary union leaders. However, unions in some of the most industrialized provinces have used their own budget to organize short training courses (2 days to 1 week) for primary union leaders. These courses cover labour and union legislation, negotiating skills and collective bargaining, labour contracts, and dispute settlement procedure.

Legal counselling services have been made more available to workers. Counselling centers and offices have been set up at each provincial and sectoral union. There is a legal advice group at the district union and at the workplace, at least one member of the union executive board must be assigned to provide legal advice to workers in the enterprise. So far, 16 centers, 32 officies and 332 counselling groups have been set up. 72 professional union counsellors were trained and certified by the provincial departments of justice. Thousands of workers receive legal advice from the union counselling system every year.

At the workplace, VGCL considers collective bargaining to be the most important measure to protect workers’ interests. In Directive 1 issued in October 2006 by VGCL regarding the criteria for union evaluation, the most important condition for a primary union to receive the ‘Strong Union Award’ – the most prestigious annual award by the VGCL for the best workplace unions – is to negotiate and sign a collective agreement with better-than-minimum benefits for workers. To assist the primary unions in collective bargaining, the VGCL also requires the higher-level unions to provide support before and during the bargaining process and explore the possibility to negotiate above-workplace agreements with groups of employers.

The VGCL also improved the role of higher-level unions in protecting workers’ interests during strikes and labour disputes. In Directive 1455 issued on 26 August 2008, the VGCL required the provincial unions to assign staff to strike-prone areas to follow the situation and settle labour disputes timely before they turn into strikes. For example, Ho Chi Minh city, Dong Nai and Binh Duong have encouraged migrant workers to join self-managed teams which are based in the workers’ community. Through these teams, the higher-level unions provide information on labour legislation for workers and identify signals of potential wildcat strikes among the migrant workers. The EPZ and district unions collaborated with the provincial labour inspectorates to investigate enterprises suspected of violating the law. For instance, the union-labour inspection collaboration in Ho Chi Minh City resulted in sanctions against tfor evasion of social insurance[27].

Emerging from the debates among the union circles prior to the 10 th National Union Congress was the idea that the third function of the union, which is to protect members’ rights and interests, should be officially recognized as the most important task of the organisation. This proposal has been reflected in the draft political report of the union at the Congress, as follows:

The union should focus on renewing the methods and contents of union activities at all levels with the utmost emphasis on the workplace level…Decisively shift union activities toward protecting the legitimate and legal rights

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and interests of union members, civil servants, and workers; build sound, stable and progressive industrial relations[28]

With all these efforts, however, the trade union has not been able to tackle its core problem – the weakness of workplace unions in representing members. The vast majority of collective agreements are a replication of the labour law with minor extra welfare provisions. The number of strikes in the first 8 months of 2008 has surpassed that of 2007; still, none was organised by the workplace union. Though the reformists in the union proposed a shift toward prioritizing the union function of protecting members’ interests over the State functions of mobilization and education of workers, the union has not worked out any feasible measures to realize this advocacy. As long as the unions are dependent on the management, their goal of representing members and organising strikes can hardly be realized. As Clarke and Pringle (2008) argued, the subordination of the trade union to management is a structural phenomenon. As the union election rules and procedures still allow the management to manipulate election outcomes, the rank-and-file workers would not be able to elect their real leaders. When they are unable to negotiate with the employers through the formal unions, rank-and-file workers will naturally turn to the informal leaders to initiate unconstitutional collective actions.

Apart from the challenge from below, the directions for union reform in Vietnam are influenced by the political interests from the top – the Communist Party. The VGCL’s subordination to the Party and obligation to join with the government in conducting its administration functions have significantly constrained the organisation’s effort to become a representative union. On the one hand, the Government and the Party provide the most important financial and political back-up for the VGCL. At the local level, the trade unions rely on the regional governments to facilitate the implementation of their programs as well as their coordination with other departments. On the other hand, both the Party and the Government require the union to maintain industrial peace and social order by reducing wildcat strikes. In other words, the union is supposed to contain worker’s activism rather than extending it. As Truong Tan Sang, the standing member of the Central Party Secretariat said:

For a long time we only paid attention to economic growth but did not pay much attention to develop political cells at enterprises which is a strength of the Party…This [settling strikes] is not only the Union’s responsibility. The whole political system has to get involved in order to urgently find out measures for a breakthrough so we ourselves will lead strikes or we do not strike but resolve disputes through negotiations, thus other people can not take advantage of the disputes and strikes”[29].

By pointing to leaders of strikes as people who took advantage of disputes and strikes, the Party has placed the spontaneous representatives of workers at the workplace out of legitimacy. The measures of the Party, consequently, would not include recruiting these strike organisers into the union contingent or reforming the workplace unions into real representatives of workers. Instead, political training and Party membership extension will become the two major solutions advocated by the Party. Since 2007, as a result, the VGCL increased the scale of political training among workers. The HCMC Federation of Labour, for instance, provided political training to 3,500 workers in 2007. The union also encouraged workers in private and foreign-owned companies to join the Party so as to increase Party membership in the non-public sector.

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While the political backing of the Party may provide the union with more resources and power to carry out its reform, it will constrain the union’s steps toward a radical change in fear that worker activism is encouraged rather than limited. Given the dependence of enterprise unions on the management, the influence of the Party will further detach the trade union from their members. Furthermore, the guaranteed political position that the VGCL enjoys at the national level will mitigate the pressure for reform that wildcat strikes from below are posing.

Conclusion

Wildcat strikes in Vietnam have evolved from piecemeal protests against employers’ violations of labour rights into well-organised waves of strikes that enabled workers to bargain with the employers for higher wages and better working conditions. The growth in scale and sophistication of strikes is attributed to the network of migrant workers living in workers’ villages, the organising role of team leaders and experienced workers, and the pro-labour responses of the press and the regional authorities. When the labour market becomes tighter and there has been no alternative bargaining mechanism available for workers, wildcat strikes continue to be the only way for workers to negotiate with the management.

Strikes, unfortunately, can not solve all workers’ problems. When the management is authoritarian and the workplace unions can hardly represent their interests, workers opt for quitting after strikes as a way to show their discontent with the management. Apart from wildcat strikes, high labour turnover, labour shortage, and the instability of the labour force have become acute problems facing the State and the economy.

The pressure of the rank-and-file activism which has been mediated by the labour press and the regional authorities has posed an unprecedented challenge to the union to reform itself into a representative union. At the same time, the VGCL was pushed by the Party to maintain industrial peace and minimize worker activism. The union is facing a dilemma: on the one hand, it is urged to stand on the side of its members to represent their interests in negotiation with the employers at the workplace; on the other hand, it detaches itself from members by serving the Party’s purposes. The VGCL can not become a real union while it remains a State organisation. The tensions between these two factors will only intensify and present increasing challenges for trade unions in the face of continuing wild cat strikes in Vietnam.

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Notes

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