[co-author: Luke Bambrick, Law Clerk]

As global manufacturers pivot away from China and set their sights on Vietnam, the country’s labor and employment landscape is rapidly changing. This surge in demand from Europe and the U.S. has not only sparked economic growth, but also amplified pressure on Vietnam to modernize labor standards and safeguard workers’ rights. In response to this pressure from the West, Vietnam has entered several major international free trade agreements and recently released a draft of the new Law on Trade Union. Employers in Vietnam must determine whether they are prepared for the challenges and opportunities this new era may potentially bring.

The New Draft Law on Trade Union

Vietnam's trade union system is poised for a major overhaul. The Vietnam General Confederation of Labor (VGCL) has recently unveiled a draft for a new Law on Trade Union, set to replace the existing 2012 trade union legislation. This draft is anticipated to be enacted at the National Assembly’s 8th sitting in October of this year.

Here’s how the draft law will upend the trade union status quo in Vietnam.

• Currently, Vietnam's trade union system is centralized under the Vietnam General Confederation of Labor (VGCL), a subdivision of the Vietnamese Communist Party. By law, all trade unions must operate through the VGCL.
• Recently, however, Vietnam entered two major free trade agreements which directly conflict with this centralized union system: the Comprehensive and Progressive...

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