Dismissing employees in Vietnam: which legal issues do employers need to know?

It is undeniable that dismissal is the strictest labor discipline that employers can impose on their employees. Once an employee becomes dismissed, it means that the labor contract signed with his/her employer before will be terminated. Due to such a severe legal consequence, the prevailing laws in Vietnam, have laid down several regulations on the grounds, principles, and procedures for a discipline of dismissal to be imposed on employees. It is necessary for both employers and employees to comprehensively grasp those regulations, and fully and properly execute them in practice. That would help them avoid relevant legal risks and protect each party’s legitimate rights and interests. Through this Article, ALB & PARTNERS would like to provide the below outstanding legal notes on the labor discipline of dismissal.

I. Grounds for applying the labor discipline of dismissal

A dismissal shall only be exercised on the following ground: (i) one of the violations as prescribed under Article 125 of the Labor Code 2019 has been constituted and (ii) such a violation is also prescribed under internal labor regulations.

In more particular, Article 125 of the Labor Code 2019 prescribes the below circumstances under which a dismissal may be considered applying:

1. The employee commits an act of theft, misappropriation, gambling, intentional assault, or drug usage at the workplace.

2. The employee discloses technological know-how/trade secrets of the employer, infringes the intellectual property rights of the employer, commits acts that are seriously detrimental or posing a seriously detrimental threat to the assets or interests of the employer, or commits sexual harassment in the workplace against the internal labor regulations.

3. The employee repeatedly commits a violation and such a violation was disciplined by a deferment of salary increment or a demotion that has not been absolved yet.

A repeated violation will constitute when that violation has already been disciplined but still repeated before it is absolved, as far as provided by Article 126 of the Labor Code 2019.

4. The employee arbitrarily leaves the job for a sum period of 05 days within 30 consecutive days, or for a sum period of 20 days within 365 consecutive days from the first day he/she arbitrarily leaves the job without any reasonable excuses.

However, there will exist some justifications that the employee can rely on when he/she is deemed committing the above-mentioned acts, i.e., the occurrence of natural disasters, fires; the employee or his/her family member suffering from illness as evidently certified by a competent health facility; and other reasons as prescribed in internal labor regulations.

There were no other circumstances or reasons than those stated in the provisions above that will become the legitimate grounds for the employer to exercise a discipline of dismissal.

II. Principles of applying the labor discipline of dismissal

Article 122 of the Labor Code 2019 requires the employer to adhere to the following principles upon the application of dismissal to the employee:

1. The employer will bear the burden of proof in indicating the default of the employee.  
2. The dismissal shall involve the presence of the internal representative organization of employees. The presence of the employee is also mandatory as he/she is entitled to provide his/her own justification or have another party provide a justification for his/her case, i.e., an attorney. If the employee is under 15 years old, the presence of his/her legal representative shall be required.
3. The application of the discipline of dismissal shall be recorded in writing.
4. An act of violating internal labor regulations shall be sanctioned by one labor discipline only.
5. Under a circumstance that the employee commits different acts of violating internal labor regulations at the same time, then only one strictest discipline to be imposed on the most serious violation shall be exercised.
6. The employer is not allowed to exercise any labor discipline during the period of which the employee is experiencing one of the following cases:

• Taking leave due to illness or convalescence, or on other types of leave approved by the employer.
• Being held for temporary custody or detention.
• Waiting for verification and conclusion of the competent authority on whether he/she has committed an act of violation as prescribed under Article 125.1 and Article 125.2 of the Labor Code 2019.
• Being pregnant, on maternal leave, or raising a child under 12 months of age.

Additionally, Article 123.1 of the Labor Code 2019 sets forth a statute of limitation for imposing a labor discipline on an act violating internal labor regulations, which is the period of 06 months commencing from the day where such an act of violation takes place; in case the act of violation is related to the finance/assets, or discloses technological know-hows/trade secret of the employer, the statute of limitations can be extended up to 12 months.

III. Procedures for imposing the labor discipline of dismissal

A procedure for imposing the labor discipline of dismissal has been provided b

Under Article 122 of the Labor Code 2019 and Article 60 Decree 145/2020/ND-CP, the procedure for imposing a labor discipline shall be conducted with the following steps.

Step 1: Confirming the violation

• If the violation of the employee is caught while it is committed, then the employer shall immediately prepare a violation record and inform the internal employee representative organization of which the employee is a member, and the employee’s legal representative if the employee is under 15.
• If the violation of the employee is caught after it is committed,  the employer shall then be required to gather the evidence for proving the default of the employee.

Step 2: Holding a disciplinary hearing

It is the employer’s responsibility to hold a disciplinary hearing, in particular:

1. Prior to the hearing:  The employer shall send at least 05 days prior notice about the content, time, venue of the disciplinary hearing, the full name of the employer facing the labor discipline, and the violation at issue to the internal employee representative organization, the employee, and the employee’s legal representative if the employee is under 15.
2. Conducting the hearing:
   • The hearing shall be conducted in the presence of mandatory participants or one of them confirms their non-participation or absence from the hearing.
   • Minutes of the disciplinary hearing shall be taken and ratified before the end of the hearing with the signatures of the participants. In case a participant refuses to sign the minutes, the minutes taker shall specify his/her full name and reasons for refusal in the minutes.

Step 3: Adopting the disciplinary decision

Within the statute of limitation of a disciplinary procedure as prescribed by law, the person having the competence to impose the labor discipline will issue a disciplinary decision.

Pursuant to Article 69.2.1 of Decree 145/2020//ND-CP, the competent person herein will be the one that is competent to conclude the labor contract with the employee or otherwise as prescribed under internal labor regulations.

Step 4: Announcing the disciplinary decision in public

The disciplinary decision shall then be delivered to the employee, the legal representative of the employee that is under 15, and the legal internal employee representative organization.

As far as analyzed above, exerting the labor discipline of dismissal is such a complicated procedure that may potentially raise relevant disputes between employers and employees. That is why employers should comprehensively understand and properly comply with the above-mentioned legal provisions in order to ensure a legitimate process of employee dismissal.

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