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

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 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).

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

Figure2: Percentage of strikes in Vietnam by Enterprise Ownership, 1995-2007

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

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 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 Hanoi

Basic 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 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)

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 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.