DISMISSAL IN LABOR CODE 2025
Topic 35:
DISMISSAL IN LABOR CODE
Dr. Đình Thị Chiến
SUMMARY OF THE CASE AND COURT DECISION
[Judgment No. 02/2023/LĐ-ST dated May 31, 2022, of the People’s Court of Cầu Giấy District, Hanoi City.]
Summary of the Case:
Mr. Nguyễn Hùng was employed by Company B under an indefinite-term employment contract No. 11/2017/BBM, holding the position of Director of the Administrative and Human Resources Division. On June 30, 2020, Mr. Hùng submitted a resignation letter, expressing his desire to terminate his employment with Company B effective July 4, 2020. In response, Ms. Phương, the General Director of Company B, sent a message stating: “I respect your decision.” Subsequently, Company B requested Mr. Hùng to come in to hand over his duties, but he did not report to the company.
On July 21, 2020, Company B issued Decision No. B1XX dismissing Mr. Hùng, citing the reasons: “irresponsibility in managing, supervising, and approving procurement documents, causing significant material losses to the company; and lack of cooperation during the investigation to clarify fraudulent acts of property misappropriation within the Procurement Department under his management.”
Disagreeing with Decision B1XX, Mr. Hùng filed a lawsuit against Company B, requesting the Court to declare the dismissal decision unlawful and seeking additional remedies.
The Court found that, in considering disciplinary action, Company B had repeatedly invited Mr. Hùng to attend meetings, but he only responded once via message, stating he was busy and unable to attend. Consequently, Company B proceeded with the meeting in his absence, with all required participants present as per regulations. Thus, the process of reviewing Mr. Hùng’s disciplinary case did not violate procedural requirements. After submitting his resignation, Mr. Hùng unilaterally ceased working without the company’s consent.
Moreover, under his management of the Administrative and Human Resources Division, multiple employees committed violations leading to their dismissals, indicating deficiencies in Mr. Hùng’s leadership that contributed to these outcomes. Additionally, as Director of the Administrative and Human Resources Division, Mr. Hùng had signed employment contracts beyond his authority. Therefore, the Court concluded that Company B’s decision to dismiss Mr. Hùng was in accordance with legal provisions.
Court Decision:
[…] The Court rejected Mr. Hùng’s claim requesting the annulment of Dismissal Decision B1XX.
COMMENTARY
- Introduction
Dismissal is the most severe form of labor discipline, resulting in the employee losing their job and income. Consequently, compared to other disciplinary measures, labor law imposes stringent requirements on the grounds for its application. While employers may establish their own grounds for other forms of discipline within their internal regulations, dismissal can only be applied in limited circumstances explicitly prescribed by law. Furthermore, employers must strictly adhere to legally mandated provisions regarding the statute of limitations, principles, and procedures for handling such disciplinary actions.
- Legal Issues
- Grounds for Applying the Dismissal Form of Discipline
Pursuant to Article 117 of the 2019 Labor Code, “labor discipline consists of rules regarding compliance with time, technology, and operational management in production and business, as established by the employer in the internal labor regulations and as prescribed by law.” For employers with fewer than 10 employees, the parties may agree on labor discipline provisions within the employment contract [Article 69 of Decree No. 145/2020/NĐ-CP].
Thus, to determine whether an employee’s conduct constitutes a disciplinary violation, it must be assessed whether such conduct is specified in the internal labor regulations, labor law, or agreements within the employment contract.
Moreover, when applying the dismissal form of discipline, employers must adhere to the limits prescribed by law. Employers are only permitted to impose dismissal in cases explicitly allowed by statute. Accordingly, dismissal as a disciplinary measure may be applied in the following circumstances [Article 125 of the 2019 Labor Code]:
(1) The employee commits acts of theft, embezzlement, gambling, intentional injury, or drug use at the workplace;
(2) The employee discloses business secrets, technological secrets, infringes the employer’s intellectual property rights, causes serious harm or threatens to cause particularly serious harm to the employer’s property or interests, or engages in sexual harassment at the workplace as stipulated in the internal labor regulations;
(3) The employee, previously disciplined by an extension of the salary increase period or removal from a position, repeats the violation while the prior discipline remains unexpunged. Recidivism refers to an employee repeating a violation for which they were disciplined, and the prior discipline has not yet been expunged under Article 126 of this Code;
(4) The employee abandons work without justifiable reason for a cumulative total of 5 days within a 30-day period or 20 days within a 365-day period, starting from the first day of unauthorized absence.
Cases considered to have justifiable reasons include natural disasters, fires, illness of the employee or their relatives confirmed by a competent medical facility, and other circumstances specified in the internal labor regulations.
It should be noted that, although this case was adjudicated when the 2019 Labor Code was in effect, the disciplinary action taken by Company B against Mr. Nguyễn Hùng on July 21, 2020, fell under the applicability of the 2012 Labor Code. Therefore, the commentary on this case will be analyzed based on the 2012 Labor Code, with comparative observations under the 2019 Labor Code.
According to Decision B1XX dated July 21, 2020, issued by Company B, the conduct subjected to disciplinary action and resulting in Mr. Nguyễn Hùng’s dismissal included: (i) Irresponsibility in managing, supervising, and approving procurement documents, causing significant material losses to the company; (ii) Lack of good-faith cooperation during the investigation to clarify fraudulent acts of property misappropriation in the Procurement Department under his management.
Among the acts cited in Decision B1XX, the conduct of “irresponsibility in managing, supervising, and approving procurement documents, causing significant material losses to the company” suggests material harm to the company. However, for this to qualify as grounds for dismissal, the material harm must be deemed serious [Clause 1, Article 126 of the 2012 Labor Code, retained in Clause 2, Article 125 of the 2019 Labor Code]. Yet, neither the company’s disciplinary decision nor the court judgment clarified the extent of this material loss, whether it reached the threshold of seriousness, or how this matter was addressed in Company B’s internal labor regulations.
As for the other acts listed in Decision B1XX, under legal provisions, dismissal may only be applied if they cause serious harm or threaten particularly serious harm to the employer’s property or interests [Clause 1, Article 126 of the 2012 Labor Code, retained in Clause 2, Article 125 of the 2019 Labor Code]. However, neither the company’s disciplinary decision nor the court’s findings elucidated these elements. Most notably, the Court did not rely on these alleged violations by Mr. Nguyễn Hùng to assess the legality of Disciplinary Decision B1XX.
In the judgment, the Court relied on conduct not considered in Dismissal Decision B1XX to evaluate its legality, specifically the following acts: (i) After submitting his resignation, Mr. Nguyễn Hùng unilaterally ceased working without the company’s consent; (ii) Under Mr. Nguyễn Hùng’s management of the Administrative and Human Resources Division, multiple employees committed violations leading to their dismissals, demonstrating deficiencies in his leadership that contributed to these outcomes; (iii) As Director of the Administrative and Human Resources Division, Mr. Nguyễn Hùng signed employment contracts exceeding his authority.
Regarding the Court’s reliance on Mr. Nguyễn Hùng’s violations—conduct not previously considered by Company B—to assess the basis of Decision B1XX [In this section, the author does not address the scope of the Court’s adjudication under the Civil Procedure Code but focuses solely on commenting on the reasonableness and legality from a substantive law perspective], the author offers the following commentary:
First, this approach by the Court fails to uphold the principle that the employer bears the burden of proving fault [Point a, Clause 1, Article 122 of the 2012 Labor Code, retained in Point a, Clause 1, Article 122 of the 2019 Labor Code]. In this case, the acts the Court relied upon to assess the legality of Disciplinary Decision B1XX were neither proven nor considered by the employer during the disciplinary process leading to the issuance of this decision. By relying on these acts to conclude that Company B’s dismissal was justified, the Court effectively assumed the role of disciplining the employee on behalf of the employer.
Second, this approach by the Court does not ensure the employee’s right to self-defense or to be represented by a lawyer or an employee representative organization [Point c, Clause 1, Article 123 of the 2012 Labor Code, retained in Point c, Clause 1, Article 122 of the 2019 Labor Code].
Since the employer did not base the disciplinary action on these acts during the process, Mr. Nguyễn Hùng had no opportunity to defend himself against these allegations at that stage. Although, during the trial, the employee could defend himself or engage a lawyer or representative organization, and the Court is a more impartial entity in reviewing disciplinary matters, this approach remains unfair. It disadvantages cases where an employer imposes discipline on valid grounds but fails to follow proper procedures, as such decisions—despite having a basis—would still be deemed unlawful.
Third, the employee’s violations, as of the date of the Court’s adjudication, had all exceeded the statute of limitations for disciplinary action [The statute of limitations for labor discipline is stipulated in Clause 1, Article 124 of the 2012 Labor Code as 6 months, or 12 months in exceptional cases, from the date of the violation, a provision retained in Clause 1, Article 123 of the 2019 Labor Code]. This is a critical point demonstrating that the Court’s reliance on acts not considered during the disciplinary process to affirm the basis of Decision B1XX was entirely incorrect.
- Procedure and Process for Dismissal
When handling labor discipline in general, employers must strictly comply with the procedures and processes for labor discipline. These are regulated under Article 122 of the 2019 Labor Code and Article 70 of Decree No. 145/2020/NĐ-CP. Since the legal issue in this case pertains specifically to disciplining an employee in their absence, the author will focus analysis and commentary on this procedure.
According to Clause 2, Article 70 of Decree No. 145/2020/NĐ-CP, within the statute of limitations for handling labor discipline, the employer conducts a disciplinary meeting as follows:
a) At least 5 working days prior to the disciplinary meeting, the employer must notify the content, time, location of the meeting, the name of the employee subject to discipline, and the violation being addressed to the required participants as stipulated in Points b and c, Clause 1, Article 122 of the Labor Code, ensuring these participants receive the notice before the meeting takes place;
b) Upon receiving the employer’s notice, the required participants under Points b and c, Clause 1, Article 122 of the Labor Code must confirm their attendance with the employer. If any required participant cannot attend at the notified time and location, the employee and employer may negotiate a change in time or location; if no agreement is reached, the employer decides the time and location of the meeting;
c) The employer conducts the disciplinary meeting at the time and location notified under points a and b of this clause. If any required participant under Points b and c, Clause 1, Article 122 of the Labor Code does not confirm attendance or is absent, the employer may still proceed with the disciplinary meeting.
Regarding this procedure, at the time Company B disciplined Mr. Nguyễn Hùng, Decree No. 05/2015/NĐ-CP (as amended and supplemented by Decree No. 148/2018/NĐ-CP) was applicable [See Clause 2, Article 30 of Decree No. 05/2015/NĐ-CP, as amended and supplemented by Clause 12, Article 1 of Decree No. 148/2018/NĐ-CP]. Accordingly, the employer was required to notify the mandatory participants of the content, time, and location of the disciplinary meeting, ensuring that these participants received the notice prior to the meeting.
The meeting was to proceed with the participation of the notified components. Upon receiving the employer’s notice, the mandatory participants had a maximum of 3 working days to confirm their attendance. If unable to attend, they were required to inform the employer and provide a reason. If a mandatory participant failed to confirm attendance, provided an unjustifiable reason, or confirmed attendance but did not appear, the employer could still proceed with the disciplinary action.
In this case, the Court found that: “When considering disciplinary action, Company B repeatedly invited Mr. Nguyễn Hùng to attend the meeting, but he only responded once via message stating he was busy and could not attend. Consequently, Company B conducted the meeting in his absence, with all required participants present as per regulations. Thus, the process of reviewing Mr. Nguyễn Hùng’s discipline did not violate procedural requirements.”
This finding by the Court does not clarify which instance Mr. Nguyễn Hùng’s message about being busy pertained to, whether his reason was justifiable, or whether Company B’s invitations to the meetings complied with proper procedure (i.e., included all legally required content and were supported by evidence proving Mr. Nguyễn Hùng received them). Assuming Company B’s invitations were procedurally correct and Mr. Nguyễn Hùng received them, two scenarios must be distinguished: (i) If Mr. Nguyễn Hùng messaged that he was busy and unable to attend, the employer continued to invite him but he remained absent, then Company B’s decision to proceed with the disciplinary meeting in his absence was procedurally correct;
(ii) If Mr. Nguyễn Hùng’s message about being busy pertained to the final meeting (the one resulting in Decision B1XX on July 21, 2020), and Company B did not verify whether his absence was due to a justifiable reason before proceeding with the disciplinary action in his absence, this would constitute a violation of Clause 2, Article 30 of Decree No. 05/2015/NĐ-CP (as amended and supplemented by Clause 12, Article 1 of Decree No. 148/2018/NĐ-CP).
When evaluated under the 2019 Labor Code and its implementing regulations, in scenario (i), Company B’s decision to discipline Mr. Nguyễn Hùng in his absence would be correct. However, in scenario (ii), proceeding with the disciplinary action in his absence would also violate Clause 2, Article 70 of Decree No. 145/2020/NĐ-CP.
Furthermore, the Court did not comprehensively address other issues such as the statute of limitations for disciplinary action or the authority to impose discipline, resulting in an incomplete assessment of the case.
III. Conclusion
The imposition of disciplinary responsibility is a unilateral right of the employer over an employee who violates discipline. Therefore, the law imposes strict regulations on the principles, grounds, authority, and procedures for handling discipline to prevent employers from abusing their authority. For dismissal in particular, the law further limits the circumstances under which employers may apply this measure.
When subjected to improper discipline, employees can protect their rights through complaints or requests for dispute resolution. In this context, the Court serves as the highest and final authority in determining whether a disciplinary decision complies with the law. Courts should exercise caution and conduct a comprehensive review when assessing the legality of a disciplinary decision to ensure the rights of both parties in the employment relationship are protected.
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