STATUTE OF LIMITATIONS FOR RESOLVING INDIVIDUAL LABOR DISPUTES
Topic 40:
STATUTE OF LIMITATIONS FOR RESOLVING INDIVIDUAL LABOR DISPUTES
Senior Lecturer, Dr. Nguyễn Thị Bích
SUMMARY OF THE CASE AND COURT DECISION
(Case number 01/2023/LĐ-PT dated June 20, 2023, issued by Phú Yên Province People’s Court regarding the labor dispute “claim for reimbursement of training expenses, bonuses, and compensation for damages due to breach of commitment.”)
Summary of the Case:
On March 14, 2016, Company K signed a 36-month labor contract with Mr. Nguyễn Thành. On June 23, 2016, Company K and Mr. Nguyễn Thành signed a post-training commitment, requiring a minimum service term of five years. Violations would render Mr. Nguyễn Thành responsible for reimbursing the company for all training costs, including wages, additional salary increments, and other allowances. However, the commitment did not specify the training duration.
On January 14, 2017, Mr. Nguyễn Thành signed an appendix to extend his labor contract at Company K. On December 31, 2016, he signed an internal bonus notification and pledged to continue working for one year starting from January 1, 2017. Breaches of this pledge required the return of the bonus.
While employed, on July 11, 2017, Mr. Nguyễn Thành submitted his resignation and officially stopped working on August 8, 2017. Company K issued notifications demanding reimbursement for training costs on August 17, 2017, and June 30, 2020.
On December 28, 2020, Company K filed a lawsuit with the court, requesting a ruling compelling Mr. Nguyễn Thành to reimburse all training expenses and other costs due to breaches of the signed commitment. Mr. Nguyễn Thành argued that he had informed Company K of his resignation on August 26, 2017, but the company did not accept it and delayed filing the lawsuit. He claimed the statute of limitations under Article 202 of the 2019 Labor Code had expired and requested the court to dismiss Company K’s claims.
Court Decision:
The court determined that a portion of Company K’s claims was still within the statute of limitations for litigation.
COMMENTARY
- Introduction
One of the primary considerations for parties involved in labor disputes is the statute of limitations for resolving such disputes. This represents the legally stipulated period during which parties are entitled to request competent authorities, organizations, or individuals to resolve labor disputes to protect their rights and interests. Once this period expires, parties lose the right to initiate legal proceedings.
Under Article 187 of the 2019 Labor Code, entities and individuals authorized to resolve individual labor disputes include labor conciliators, labor arbitration councils, and people’s courts. Correspondingly, the Labor Code establishes the statute of limitations for requesting conciliation of individual labor disputes by labor conciliators and the statute of limitations for filing lawsuits with courts to resolve individual labor disputes (Article 190).
Through this case, the author provides analysis and commentary to determine the statute of limitations applicable to the plaintiff’s wage-related claims.
- Legal Issues
- Determining the Statute of Limitations in Resolving Labor Disputes
The statute of limitations for filing a lawsuit is the legally defined period within which a party is entitled to initiate legal proceedings to request the court’s resolution of a civil case to protect their legitimate rights and interests. Once this period expires, the right to sue is lost [Clause 3, Article 150 of the 2015 Civil Code].
The statute of limitations is calculated from the starting point of the first day of the period and ends at the conclusion of the final day. Regarding the statute of limitations for resolving labor disputes, Clause 3, Article 190 of the 2019 Labor Code specifies:
“The statute of limitations for requesting the court’s resolution of individual labor disputes is one year from the date when the disputing party discovers the act that they believe infringes upon their legitimate rights and interests.”
Therefore, when legitimate rights and interests are infringed, the parties in labor relations have a one-year period to request court intervention to resolve the dispute and protect their rights. If a party can demonstrate that the delay in filing a lawsuit was caused by force majeure events, objective obstacles, or other lawful reasons preventing them from filing the lawsuit within the legally stipulated period, such periods are not included in the calculation of the statute of limitations.
However, the 2019 Labor Code does not detail specific cases of force majeure, objective obstacles, or other lawful reasons. Instead, these are governed by Article 156 of the 2015 Civil Code, which states:
“Article 156. Periods Not Included in the Statute of Limitations for Filing Civil Cases or Requests for Resolution of Civil Matters
Periods not included in the statute of limitations for filing civil cases or requests for resolution of civil matters are those during which the following events occur:
- Force majeure events or objective obstacles prevent the party entitled to file a lawsuit or request from doing so within the statute of limitations.
A force majeure event is an objectively occurring event that is unforeseeable and unavoidable despite having taken all necessary measures and capabilities.
An objective obstacle is any hindrance caused by external circumstances that prevent the person with civil rights and obligations from realizing their rights are being infringed upon or from exercising their civil rights and obligations.”
When determining the statute of limitations, it is essential to identify the starting point as the moment the disputing party realizes their legitimate rights and interests have been infringed upon. For example, if an employee receives a dismissal decision after it becomes effective, the statute of limitations for requesting court resolution of the dispute begins from the day the employee receives the dismissal decision [Guidance No. 33/HD-VLSTC dated November 8, 2022, issued by the Supreme People’s Procuracy].
The statute of limitations is considered expired if the disputing party requests its application (such a request must be made before the first-instance court issues its judgment or decision). In such cases, the court will issue a decision to suspend the resolution of the case [Point e, Clause 1, Article 217 of the 2015 Code of Civil Procedure].
According to Official Dispatch No. 89/TANDTC-PC dated June 30, 2020, on clarifying issues in adjudication, Section IV.3 states:
“3. During case resolution, should judges explain to disputing parties their right to request the court’s application of the statute of limitations? (In many cases, disputing parties are unaware of their rights, and those conducting proceedings fail to explain before the first-instance court’s judgment, causing parties to lose their right to request application of the statute of limitations.)
As stipulated in Articles 48, 210, and 239 of the Code of Civil Procedure, judges and court presidents are responsible for informing and explaining rights and obligations to disputing parties in cases required by the Code of Civil Procedure, such as rights and obligations outlined in Articles 70 to 73; Clause 6, Article 48 of the Code of Civil Procedure.
The Code of Civil Procedure does not mandate judges to inform and explain disputing parties’ right to request the application of the statute of limitations. Moreover, Clause 2, Article 184 of the Code of Civil Procedure specifies: ‘The court shall apply the statute of limitations only upon the request for its application made by one or more parties, provided such a request is submitted before the first-instance court issues its judgment or decision resolving the case.’
To ensure equality of rights and obligations among disputing parties during case resolution, judges do not explain the right to request the application of the statute of limitations.”
The decision to request the application of the statute of limitations is entirely dependent on the disputing parties’ intent. Accordingly, courts must accept all cases within their jurisdiction upon receiving lawsuits from the parties. The issue of applying the statute of limitations is only considered when one or more parties request it, provided that such a request is made before the first-instance court issues its judgment or resolution. Parties benefiting from the application of the statute of limitations may decline its application, except when such refusal aims to evade fulfilling obligations.
This provision facilitates disputing parties, eliminating barriers to exercising their right to sue and ensuring the protection of their legitimate rights and interests.
For reference, a similar case is seen in Case No. 1020/2023/LĐ-ST dated April 12, 2023, issued by Thủ Đức City People’s Court, Ho Chi Minh City. In this case, disputing parties sought a declaration of the invalidity of the labor contract, focusing on the employment period of two months from July 2011 to August 2011. Based on Article 202 of the 2012 Labor Code and Article 190 of the 2019 Labor Code, as of June 6, 2022, the employee’s lawsuit had exceeded the statute of limitations.
However, during case resolution, disputing parties did not request the application of the statute of limitations. Thus, based on Article 190 of the 2019 Labor Code and Article 184 of the 2015 Code of Civil Procedure, the court did not apply the statute of limitations. Therefore, in cases involving expired statutes of limitations, courts only apply the statute of limitations if requested by one or more parties.
- Evaluating the Statute of Limitations in Resolving the Labor Dispute Between Company K and Mr. Nguyễn Thành
To determine whether the case remains within the statute of limitations, identifying the correct starting point is crucial. The statute of limitations for resolving individual labor disputes, including court proceedings, begins from “the date when the disputing party discovers the act they believe infringes upon their legitimate rights and interests.”
Current laws lack specific guidance on determining the date when a party discovers their legitimate rights and interests have been infringed upon. This date primarily depends on the subjective intention of the party filing the lawsuit. When the party perceives their rights and interests to be violated, the statute of limitations begins to run. This regulation demonstrates respect and maximal facilitation for protecting the legitimate rights and interests of the violated party.
Nonetheless, judicial practice reveals that many courts face challenges or confusion in identifying this date, especially in complex cases with unclear events and evidence.
First, consider the training relationship established between the two parties.
Based on the Post-Training Commitment dated March 26, 2016, Mr. Nguyễn Thành pledged to serve long-term (a minimum of 5 years) and contribute to the growth of Company K. The agreement stated: “If I fail to fulfill the above commitments, I shall be fully responsible and reimburse the company for all training costs, including wages, overtime pay, and other allowances (if any) incurred during centralized training periods and periods of non-work at the company.”
In practice, both Company K and Mr. Nguyễn Thành confirmed his participation in two external training courses and one internal training course. On December 31, 2016, Mr. Nguyễn Thành signed an internal bonus notification and committed to working for one year starting January 1, 2017. If he violated this commitment, he would be required to return the bonus.
On July 11, 2017, Mr. Nguyễn Thành submitted his resignation and left work voluntarily. Thus, he breached the post-training commitment dated March 26, 2016, and the internal bonus notification dated December 31, 2016.
Second, considering the calculation of the statute of limitations.
According to Clause 2, Article 202 of the 2012 Labor Code (applicable at the time of the incident) and Clause 3, Article 90 of the 2019 Labor Code, the statute of limitations for requesting court resolution of individual labor disputes is one year from the date the disputing party discovers the act they believe infringes upon their legitimate rights and interests.
In the case above, Mr. Nguyễn Thành officially left his position on August 11, 2017. Thus, the statute of limitations for litigation would extend from August 11, 2017, to August 11, 2018. However, Company K filed its lawsuit on December 28, 2020, exceeding the statute of limitations. Similarly, counterclaims made by Mr. Nguyễn Thành requesting Company K to pay wages for July and August 2017 are also beyond the statute of limitations.
Despite this, during both first-instance and appellate hearings, Mr. Nguyễn Thành agreed to reimburse training costs of 53,008,301 VND, and Company K, in its written statements, acknowledged holding his wages for July and August 2017, further committing to reimburse them upon court ruling.
The court assessed these actions as grounds for reinitiating the statute of limitations for Company K’s claims against Mr. Nguyễn Thành concerning training costs, as well as counterclaims by Mr. Nguyễn Thành regarding wages for July and August 2017. This determination aligns with Article 157 of the 2015 Civil Code:
“Article 157. Reinstatement of the Statute of Limitations for Filing Civil Cases
- The statute of limitations for filing civil cases is reinstated under the following circumstances:
- a) The obligated party acknowledges part or all of their obligations to the filing party;
- b) The obligated party acknowledges or partially fulfills their obligations to the filing party;
- c) Parties reconcile with each other.
- The statute of limitations is reinstated from the day following the event specified in Clause 1 of this Article.”
For Company K’s claims regarding wages and bonuses during internal training amounting to 52,418,730 VND, since these are beyond the statute of limitations and Mr. Nguyễn Thành requested the court apply the statute of limitations, the provisions of Point e, Clause 1, Article 217 of the 2015 Code of Civil Procedure apply to dismiss these claims:
“Article 217. Suspension of Civil Case Resolution
- After accepting a case within its jurisdiction, the court issues a decision to suspend case resolution in the following instances:
…
- e) One or more disputing parties request the application of the statute of limitations before the first-instance court issues a judgment or decision resolving the case, and the statute of limitations has expired…”
The appellate court determined that the first-instance court’s ruling, which required Mr. Nguyễn Thành to pay 52,418,730 VND to Company K, was legally incorrect. Hence, it annulled and dismissed this portion of the first-instance decision.
Appellate Court Ruling:
– Annulled and dismissed a portion of the first-instance court’s decision regarding Company K’s claims for wages and special bonuses during internal training.
– Accepted a portion of the plaintiff’s claims, requiring Mr. Nguyễn Thành to reimburse Company K’s training costs amounting to 53,008,301 VND.
– Accepted a portion of the defendant’s counterclaims, requiring Company K to pay Mr. Nguyễn Thành wages for July and August 2017 totaling 4,752,000 VND. After offsetting amounts, Mr. Nguyễn Thành owes Company K 48,256,301 VND.
III. Conclusion
Judicial activities are complex processes requiring adherence to legal regulations to protect disputing parties’ rights while ensuring procedural compliance, thereby rendering judgments both legally effective and enforceable.
Consequently, disputing parties must familiarize themselves with substantive and procedural legal provisions, including statutes of limitations and court jurisdiction. While procedural provisions do not determine the merits or faults of a case, they significantly influence procedural authority and judgment enforcement.
Through the aforementioned case, it is evident that parties to individual labor disputes must thoroughly understand statutes of limitations to safeguard their legitimate rights and interests.
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“The article’s content refers to the regulations that were applicable at the time of its creation and is intended solely for reference purposes. To obtain accurate information, it is advisable to seek the guidance of a consulting lawyer.”
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