Dutch companies entering Vietnam are often startled by the mandatory 2% trade-union levy — payable even with no grassroots union in place. Vietnamese firms going the other way are equally surprised by Dutch works councils that can veto HR decisions. The two industrial-relations systems differ at their roots.
Union organisation: one unified system vs pluralism
Vietnam runs a unified union model under the Trade Union Law 2024 (effective 1 July 2025, replacing the 2012 law): the Vietnam General Confederation of Labour is the sole organisation. Workers are not compelled to join, but employers must pay a trade-union levy of 2% of the salary fund used as the social-insurance contribution base — even before any grassroots union exists. This is the single biggest surprise for foreign investors.
The Netherlands follows voluntary pluralism: federations such as FNV and CNV compete, and workers join freely. There is no 2% levy. Instead, companies with 50 or more employees must install a works council (ondernemingsraad) under the Works Councils Act (WOR) — a representative body with consultation and even co-decision rights over many HR policies.
Collective bargaining and agreements
In Vietnam, the Labour Code 2019 (Chapter V, Articles 68–73) governs collective bargaining between employers and workers’ representative organisations, producing collective labour agreements at enterprise or sectoral level. Terms more favourable to employees than statute prevail.
In the Netherlands, the collective labour agreement (cao) is governed by the Collective Agreements Act 1927. Its distinctive feature is AVV (extension by declaration): the Minister can declare a sectoral agreement binding on every company in the sector, including non-signatories. An FDI company entering the Netherlands must check from day one whether its sector has an extended cao — minimum working conditions may sit well above statutory floors.
Strikes: conditions and limits
Vietnam regulates strikes tightly in Chapter XIV of the Labour Code 2019 (Articles 198–216). A strike is lawful only when organised by the workers’ representative organisation, after failed bargaining and mediation, and following the prescribed sequence (ballot, notice). Wildcat stoppages enjoy no legal protection and participants face disciplinary action.
The Netherlands treats striking as a fundamental right under European Court of Human Rights case law, with minimal statutory procedure — no ballot or notice ritual comparable to Vietnam’s. Courts intervene only where a strike breaches proportionality. In practice, the poldermodel bargaining culture keeps Dutch strikes relatively rare.
Practical takeaways for FDI employers
- Entering Vietnam: budget the 2% union levy into labour costs from the start; proactively facilitate a grassroots union rather than avoiding one — it is a bargaining partner, not an adversary.
- Entering the Netherlands: check sectoral cao/AVV coverage before the first hire; at 50+ employees, prepare to constitute a works council and involve it early in HR decision-making.
- Both ways: collective agreements in either country can set standards above statute — “compliant with the law” is not automatically enough.
Frequently asked questions
Must a company with no grassroots union still pay the 2% levy?
Yes. Under the Trade Union Law 2024, employers pay a union levy of 2% of the salary fund used as the social-insurance base, even before a grassroots union is established.
What does an extended (AVV) sectoral agreement mean for an FDI company in the Netherlands?
Once extended, every working condition in the agreement binds all companies in the sector — including non-signatories. The FDI company must meet that standard, not just statutory minimums.
Are wildcat strikes lawful in Vietnam?
No. A strike is lawful only if organised by the workers’ representative organisation and following the sequence of bargaining, failed mediation, ballot and notice (Chapter XIV, Labour Code 2019). Spontaneous stoppages are unprotected.
At what headcount must a Dutch company set up a works council?
At 50 or more employees, an ondernemingsraad is mandatory under the Works Councils Act, with consultation and co-decision rights on many HR matters.
Contact FLAT Law Firm
FLAT Law Firm advises on industrial relations for Dutch businesses in Vietnam and vice versa: grassroots union setup, collective-agreement negotiation, and lawful handling of disputes and strikes. Contact us to build a harmonious, sustainable labour-relations framework.
This article has been quality-reviewed by the FLAW AI Legal Council