The question “at how many employees must we have a union” carries a false premise many foreign companies bring into Vietnam. A grassroots union is not like internal labour regulations — no headcount threshold triggers a duty to found one, because it is the employees’ own organisation, born of their own wish.
No mandatory threshold — the initiative belongs to employees
Article 170 of the 2019 Labour Code gives employees the right to establish, join and operate in workplace representative organisations; the 2024 Trade Union Law reinforces voluntariness in union organisation and activity. Under the Vietnam Trade Union Charter, a workplace with five or more union members may establish a grassroots union — that figure of five is a minimum scale for the organisation to exist, not a threshold beyond which the company is compelled to found one.
Two propositions are therefore simultaneously true: a 500-employee company may lawfully have no grassroots union if its employees have not voluntarily founded one; and a small group inside a 20-person company may initiate founding the moment they wish. In both cases the company bears the same duty: respect the right, facilitate it and never interfere — obstruction belongs to the prohibited group in Article 8 of the 2019 Labour Code.
The founding procedure in practical sequence
The process starts from the employees’ side: those who wish to organise come together, usually with the campaigning and guidance of the directly superior union (the local labour federation or a sectoral or industrial-park union). A campaign committee forms to communicate, gather members and prepare the founding congress. At the congress, employees adopt the founding and elect the grassroots union executive committee under the Vietnam Trade Union Charter.
After the congress, the recognition file goes to the directly superior union, which issues the decision recognising the grassroots union and its executive committee. From recognition, the union operates in full standing: opening accounts, managing its allocated funds, representing employees in dialogue, collective bargaining and statutory procedures such as the union-official agreement in Article 177 of the 2019 Labour Code. The company cooperates by recognising the new organisation in practice, providing statutory operating conditions and updating its labour-relations counterpart file.
Funding before and after a grassroots union exists
Financially, founding creates no new duty for the company: the 2 percent union fund contribution on the social-insurance payroll has been a standing obligation under point b, clause 1, Article 29 of the 2024 Trade Union Law, applying even before any grassroots union exists (remitted then to the directly superior union under Decree 105/2026/ND-CP). What changes after founding is the cash flow: the share allocated to the grassroots level under union financial rules is spent on worker care activities right at the company.
Alongside comes the 1 percent membership dues that members voluntarily pay on joining, usually withheld by the company from the member list. For the company, a grassroots union also brings an under-discussed governance benefit: a lawful representative counterpart for dialogue, bargaining and a collective agreement — mechanisms that move conflict into the meeting room instead of the factory gate.
Frequently Asked Questions
How many employees trigger a mandatory union?
None. Founding a grassroots union is the employees’ voluntary right under Article 170 of the 2019 Labour Code and the 2024 Trade Union Law. Under the Vietnam Trade Union Charter, a workplace with five or more members may establish one — a minimum scale for the organisation to exist, not a threshold the company is forced across.
What is the procedure?
Interested employees form a campaign committee with guidance from the directly superior union; a founding congress is held and an executive committee elected; the file goes up for the superior union’s decision recognising the grassroots union and its committee. The company facilitates — it neither initiates nor approves.
What if none is founded?
No fine, because not founding is not a violation. What is prohibited for the company is obstructing employees from founding or joining a union (Article 8 of the 2019 Labour Code) and refusing the 2 percent union fund contribution — a duty independent of whether a union exists.
How does funding work?
The company pays the 2 percent union fund contribution on the social-insurance payroll under Article 29 of the 2024 Trade Union Law both before and after a grassroots union exists: before founding, to the directly superior union (Decree 105/2026/ND-CP); after founding, the grassroots union is allocated its share under union financial rules. Members additionally pay 1 percent dues on their social-insurance salary.
This article has been quality-reviewed by the FLAW AI Legal Council