Unfair Provision Should Be Removed
By Nguyen Dien (*)
A seminar was recenlty held by the Vietnam Chamber of Commerce and Industry (VCCI) in Danang to seek opinions on the Trade Union Bill which was scheduled for approval by the National Assembly in May. During discussions, attendees mostly insisted that the draft provision for trade union’s budget worth 2% of the total payroll be repealed.
|If tade union's budget is to be paid by entities, it will have a bad impact on investment attraction, particularly from foreign investors, as it will increase costs. Photo: Le Minh Khue|
On December 8, 2004, Deputy Minister of Finance Huynh Thi Nhan and Vice Chairman of the Vietnam Labor Confederation signed Joint Circular No. 119/2004/TTLT/BTC-TLDLDVN on implementation guidance for trade union’s budget. The document cited three legal points on the issue, namely Decree No. 133/HDBT dated April 20, 1991 on implemenation guidance of the Trade Union Law, Decree No. 60/2003/ND-CP guiding the implementation of the State Budget Law, and Article 4 of Decision 53/1999/QD-TTg on several incentives for foreign direct investment.
According to Article 4, Decision 53/1999/QD-TTg, however, “foreign-invested enterprises are not liable to contribute to trade union’s budget as prescribed in this circular.” Furthermore, Decree No. 60/2003/ND-CP doesn’t mention anything about collecting fees and cites only three types of collections, being tax, fee and charge, nor any regulation on collecting trade union’s budget.
The only legal basis for the dues stipulated in the bill is therefore Decree No. 133/HDBT, dated April 20, 1991 on implementation guidance of the Trade Union Law. This decree hinges on Point b, Item 2, Article 16 of the 1990 Trade Union Law which stipulates that the budget for trade union includes “allocations from the State budget and money taken from funds of entities.”
Unfortunately, no regulation has specifically defined what these funds are. However, many have argued that the funds are in fact welfare funds, and the employers thus have to save a portion of these funds for the trade union’s budget. Based on the above regulations, in the joint circular the authorities have required entities to “contribute to grassroots trade union’s budget equivalent to 2% of the total salary, wages and allowances” and extract a part for higher levels of trade union. This sipulation is groundless and should be carefully reconsidered.
Firstly, the trade union is a voluntary organization established by workers to protect their legitimate and justifiable benefits. Hence, in a sense, this organization stands opposed to employers (in case of conflicts). So, it is totally illogical to ask employers to pay a fairly large amount for trade union’s activities. Truong Thi Mai, chairwoman of the National Assembly’s Committee for Social Affairs deemed it irrational when she said, “It makes sense to fund union’s activities with union’s funds. Using different sources [employers’ money] would make no sense.”
Secondly, in Item 3, Article 26 concerning trade union’s finance, the bill stipulates that one source of trade union’s collections is “support from the State budget.” However, this statement is incorrect because according to Article 10 of the 2002 State Budget Law, “The State budget ensures operation expenses of the Communist Party of Vietnam and other socio-political organizations (including the Vietnam Labor Confederation).”
In this sense, the State budget has to provide sufficient expenses for trade union, not only “support.” The bill is misleading in that the State only provides “support” and the trade union needs to collect money from employers.
Moreover, if trade union’s budget is to be paid by those stipulated in Circular 119, it will be paid twice: the first is from the Government according to the State Budget Law, and the second (2% of the total payroll) is from employers.
If trade union’s budget is paid by entities, this will prompt employers to oppose the foundation of trade union in the entities. If adopted, this provision may be harmful to investment attraction, particularly from foreign investors, as it will increase costs.
First of all, this regulation is unfair to other public organizations. While these associations can only raise funds from the State budget and their members (member fees), trade union will collect money from employers. What’s more, this does not include revenues from trade union’s system of hotels located in good positions nationwide.
Vietnam has integrated into the world economy. While businesses in other nations are not liable to pay for this funding, Vietnamese businesses are required to do so. Furthermore, they currently have already paid too many official and unofficial fees.
(*) Vice director of VCCI Danang