A collective bargaining agreement signed two years ago at an FDI plant promises a minimum Tet bonus and a seniority-based pay-rise ladder. This year, citing order difficulties, the company unilaterally announces it will not apply either clause, while the grassroots union points out that the agreement is still in force and was filed with the labour authority. A collective agreement dispute differs sharply from an individual one: it does not revolve around one harmed employee but around the binding force of a collectively negotiated text, and mishandling it can turn disagreement over a single clause into a collective work stoppage.
The legal framework: collective agreements under Chapter VII of the Labour Code
Collective bargaining agreements are regulated in Chapter VII of the Labour Code No. 45/2019/QH14: an agreement reached through collective bargaining between the labour collective and the employer on working conditions and the parties’ rights and obligations. An enterprise agreement takes effect once properly concluded and sent to the provincial labour authority, its content must not contravene the law, and it may not set employee entitlements below statutory floors. One frequent misunderstanding: an agreement is not a document every enterprise must have. The employer’s duty is to enter collective bargaining when the employee representative organization lawfully requests it; whether bargaining produces an agreement depends on the negotiation itself.
Once in force, the agreement binds both the enterprise and every employee within its scope, including staff hired after its effective date. Where an agreement clause is more favourable than an individual contract, the employee enjoys the better term; an employer wishing to amend a live agreement must return to the bargaining table rather than change it unilaterally. Disputes over performance of an agreement are collective labour disputes: rights disputes where one side alleges breach of the agreement or the law, and interest disputes where the parties seek new conditions beyond the existing text, each following a different route from negotiation, through a labour mediator under Article 188, to the Labour Arbitration Council where both sides consent under Article 189.
Applying the framework: when the company does not perform a signed clause
The most common scenario is an employer invoking business hardship to suspend a costly clause without renegotiating. Legally, hardship alone does not release the employer from an agreement still in force; the correct path is to propose an amendment through collective bargaining, present transparent order and cash-flow figures, and offer alternatives such as a time-limited deferral instead of permanent removal. If the company simply refuses to perform, the employee representative organization can launch a collective rights dispute, request mediation, and, where the dispute category permits, ask a court to compel performance.
From the other side, FDI employers should see the accumulating risk: many plants sign template-copied agreements promising benefit levels tied to no financial formula, so when the market turns every clause becomes a flashpoint. Effective prevention has three parts: draft cost-bearing clauses as formulas linked to objective indicators; include a mid-term review mechanism for abnormal business changes; and archive the full bargaining record, collective polling minutes and the filing receipt, so the agreement’s validity cannot be challenged back when a dispute erupts. The Law on Trade Unions No. 50/2024/QH15, effective from 1 July 2025, further strengthens the union’s bargaining role, so the bargaining table should be treated as a standing governance channel, not an emergency event.
Collective agreement governance checklist for FDI companies
- Keep a register of every live agreement: signing date, expiry, the authority that received the filing, cost-bearing clauses and their performance dates during the year.
- Before each payment cycle under the agreement, bonuses, pay rises, benefits, test financial capacity at least a quarter ahead so amendment bargaining can open in time.
- Never announce a unilateral suspension of an agreement clause; every change must pass through collective bargaining and be recorded as a written amendment.
- Preserve the full bargaining file: the bargaining request, meeting minutes, collective polling results and proof of filing with the labour authority.
- Train middle managers on the line between a collective agreement and internal labour rules, because confusing the two documents sources many wrong decisions.
Frequently Asked Questions
Where are collective bargaining agreement disputes resolved?
They follow the collective labour dispute route of the Labour Code: negotiation between the parties, mediation by a labour mediator under Article 188, then the Labour Arbitration Council if both sides consent under Article 189, or the people’s courts for collective rights disputes within statutory jurisdiction. Classifying the dispute as one over rights or over interests determines the next step, so this should be settled early with counsel.
Is a collective bargaining agreement mandatory?
No enterprise is forced to have one, but when the employee representative organization requests collective bargaining under Chapter VII of the 2019 Labour Code, the employer must negotiate in good faith and may not refuse. If bargaining succeeds, the agreement is signed, polled with the labour collective and sent to the provincial labour authority in the prescribed order. FDI plants with an active grassroots union will usually have an agreement sooner or later, so building bargaining capability early is prudent.
What happens if the company does not perform a signed agreement?
The employee representative organization can launch a collective rights dispute, demand performance of the promised clause and compensation for losses caused to employees, while the company faces administrative penalties in the labour field. The heavier consequence is relational: trust in every other company commitment collapses, a factor behind many collective stoppages. Purely legally, while the agreement remains in force its obligations remain intact; business hardship is only a basis to propose amendment bargaining.
Can individual employees sue over a collective agreement?
The right to launch a collective dispute belongs to the establishment-level employee representative organization acting for the collective, not to individuals separately. However, if a specific entitlement in an employee’s own contract is harmed because the company ignores the agreement, that employee may still pursue an individual labour dispute through a mediator and the courts. The two channels can run in parallel but should be coordinated to avoid overlapping outcomes.
This article has been quality-reviewed by the FLAW AI Legal Council
