The FLU was established in November 1984 by 15,000 members, 13 trade unions and 4 labour organisations.

Lee was elected as the member of the Legislative Council in 1995, along with Cheng Yiu-tong of the FTU, representing the Labour constituency.

In 1996, Lee was member of the Preparatory Committee for the SAR and the Provisional Legislative Council (PLC), the interim legislature controlled by the Beijing government.

After the handover, the FLU retained one seat in the Labour constituency of the Legislative Council.

In April 2023, the FLU failed to gain police approval for a Labour Day march.