This question surfaces in nearly every first advisory session of a foreign company in Vietnam, usually carrying anxiety about being fined because “the company has no union yet”. The good news: the mere absence of a union is not a finable act. The part needing care is that three neighbouring conducts — obstructing formation, skipping the union fund, and discriminating against union organisers — are genuinely sanctioned.
The voluntariness principle: nobody is compelled to found a union
Article 170 of the 2019 Labour Code affirms that employees have the right to establish, join and operate in workplace representative organisations; the 2024 Trade Union Law builds the union system on employee voluntariness. The direct legal consequence: no rule compels a company to found a grassroots union at any headcount threshold, and naturally there is no fine for the state of “not having a union”. The founding right belongs to the employees — the company neither founds it for them nor decides in their place.
From voluntariness flows the company’s correct posture: neutrality with facilitation. Neither campaign for nor against; when employees wish to organise, provide meeting time and space and coordinate with the directly superior union on procedures. That neutrality should be documented in a clear internal note, because “obstruction” disputes are judged on the actual conduct of managers at every level, not merely on the parent company’s stated policy.
Three conducts that are actually fined around the union question
First: obstructing or discriminating against employees for establishing, joining or operating in a representative organisation — demoting, cutting shifts or refusing contract renewal for someone who just campaigned to found a union. This conduct group is prohibited by Article 8 of the 2019 Labour Code and fined under Decree 283/2026/ND-CP, apart from the invalidity of the retaliatory HR decision itself. Second: refusing or evading the 2 percent union fund contribution — a duty existing independently of whether a union exists, with arrears collection and fines under the 2024 Trade Union Law framework.
The third conduct is subtler: interfering with an established union’s operations — steering executive committee elections, using company money to “buy” union activity, or pressuring the grassroots union to rubber-stamp documents favourable to the company. The law protects union independence; lawful support (premises, statutory working time for part-time union officials) must be kept clearly apart from interference in the union’s internal decisions.
What to show inspectors and how to remediate
When labour inspectors or the superior union arrive, the company need not prove “why there is no union” — that is not an offence. What it must produce: complete 2 percent contribution vouchers period by period; a file showing it never obstructed a formation wish if employees ever raised one; and objective, independent reasons for HR decisions taken in sensitive periods. If a contribution shortfall surfaces, the standard remediation is voluntary payment of the entire arrears before a violation record is drawn up — self-remediation matters when the authority sets the sanction level.
An increasingly common scenario: employees proactively seek to found a grassroots union in the middle of a restructuring or dispute. In that sensitive window, every company action risks being read as anti-union. The safe conduct is to welcome the initiative in writing, cooperate fully with the superior union, and freeze any adverse HR decisions against the formation movement’s leaders until separate legal assessment is obtained.
Frequently Asked Questions
Is not founding a union finable?
No. Founding a grassroots union is the employees’ voluntary right under Article 170 of the 2019 Labour Code and the 2024 Trade Union Law; the law sets no founding threshold and no fine for not having a union. The company simply keeps a neutral, facilitating posture for when employees wish to organise.
What about evading the fund?
That is the finable act: the 2 percent union fund contribution under point b, clause 1, Article 29 of the 2024 Trade Union Law binds every enterprise even without a grassroots union. Non-payment or evasion brings full arrears collection, late-payment amounts and administrative fines under Decree 283/2026/ND-CP.
How do we remediate?
Voluntarily pay all outstanding contributions with late-payment amounts; review and stop any conduct that could read as obstruction of formation or discrimination against organisers; and issue an internal note affirming neutrality and facilitation of formation activity whenever employees wish it.
What do inspectors check?
Labour inspectors and the superior union check: union fund contributions, non-obstruction of founding and joining representative organisations, and protection of union officials’ rights. They do not inspect “why there is no union”, because that is not a violation.
This article has been quality-reviewed by the FLAW AI Legal Council