The federation was formed in December 2003 by members of the Union of the Unemployed of Iraq, which is connected to the Worker Communist Party of Iraq as a left-wing alternative to the now defunct Iraqi Federation of Trade Unions (IFTU).

[2] The FWCUI opposes both the U.S.-led occupation of Iraq and the Islamist elements of the Iraqi insurgency, and it is often repressed by both the foreign and Islamist forces.

Many anti-war movements around the world have provided venues for FWCUI speaker tours.

A third labor formation known as the Federation of Oil Unions in Iraq also exists.

The FWCUI's members have led a number of strikes, and are particularly strong around the Basra region.