CASE LAW NO. 70/2023/AL On the termination of the labor contract with non-specialized union officials (Please note that this image is not related to the specific case being discussed).

CASE LAW NO. 70/2023/AL

On the termination of the labor contract with non-specialized union officials

Approved by the Judicial Council of the Supreme People’s Court on August 18^th, 2023, and published under Decision No. 364/QĐ-CA dated October 1^st, 2023, by the Chief Justice of the Supreme People’s Court.

Source of the Case Law:

The Cassation Decision No. 06/2022/LĐ-GĐT dated September 26^th, 2022, of the High People’s Court in Hồ Chí Minh City regarding the labor case of “Unilateral Termination Of Labor Contract” between the plaintiff, Mr. Vương Quốc A, and the defendant, K Việt Nam Co., Ltd..

Location of the Case Law’s Content:

Paragraphs 3 and 4 of the “Court’s Opinion” section.

Summary of the Case Law:

– Case Background:

The employee and the employer entered into a fixed-term labor contract. During the contract period, the employee was elected Chairman of the Executive Committee of the local Union, but the candidacy and election were invalid. Upon the contract’s expiration, the employer issued a decision to terminate the labor contract with the employee.

– Legal Resolution:

In this case, the Court must determine that the employer’s termination of the labor contract with the employee is lawful.

Relevant Legal Provisions:

– Article 36 of the 2012 Labor Code (corresponding to Article 34 of the 2019 Labor Code); Article 192 of the 2012 Labor Code;

– Article 25 of the 2012 Trade Union Law.

Keywords:

“Labor contract”; “Termination of labor contract”; “Union official”.

CASE DETAILS

Plaintiff Mr. Vương Quốc A’s Statement:

Mr. Vương Quốc A was employed by K Việt Nam Co., Ltd. (Company K) starting from March 2015, with a one-month probation period, followed by a 12-month labor contract. After the contract expired, Company K extended it until November 25^th, 2016.

During his employment, Mr. A completed his tasks without any disciplinary actions. On November 25^th, 2016, Company K issued Decision No. 05/2016/QĐNV-KD to terminate the labor contract due to the contract’s expiration, at which time he was serving as the Chairman of the Company’s local Union.

Believing that Company K wrongfully terminated his labor contract, Mr. A filed a lawsuit demanding the company reinstate him, pay his salary, and compensate him a total of VND 327,690,406.

Defendant’s Representative’s Statement:

Company K confirmed the labor contract details as presented by Mr. A. Before the contract expired on March 24^th, 2016, the company issued Decision No. 03/2016/QĐNV-KD not to renew the labor contract with Mr. A. The company extended the labor contract with Mr. A from April 26^th, 2016, to November 25, 2016 (the end of the union’s Executive Committee’s term). On October 24^th, 2016, the company issued another decision not to renew the labor contract with Mr. A and notified him and the Union of Industrial Park B.

Later, the company learned that the local Union’s Executive Committee held a congress and elected Mr. A as the Chairman of the union. The company sent a notice to the Union of Industrial Park B regarding the termination of Mr. A’s labor contract, but it was not accepted. Company K then sought legal guidance from the Department of Labor, Invalids, and Social Affairs of Đồng Nai Province. Since Company K terminated Mr. A’s labor contract in accordance with the law, it did not agree with Mr. A’s claims.

Interested Parties’ Statements:

– The Social Insurance Agency of Đồng Nai Province: Requested to be absent and did not submit any statement to the Court.

– The Union of K Việt Nam Co., Ltd.: Stated that the procedures for the congress were conducted in accordance with the regulations.

In the First-instance Judgment No. 21/2019/LĐ-ST dated November 21^st, 2019, the People’s Court of Biên Hòa City (summary) ruled:

The court did not accept Mr. Vương Quốc A’s lawsuit regarding the “Dispute over unilateral termination of labor contract” with K Việt Nam Co., Ltd..

On December 5^th, 2019, Mr. Vương Quốc A appealed the First-instance Judgment.

In the Appellate Judgment No. 19/2020/LĐ-PT dated July 30^th, 2020, the People’s Court of Đồng Nai Province (summary) ruled:

The court accepted Mr. Vương Quốc A’s appeal, overturning the entire First-instance Judgment.

K Việt Nam Co., Ltd. was ordered to pay Mr. Vương Quốc A his salary for the period he was not allowed to work from November 25^th, 2016, to the first-instance trial date of November 21^st, 2019, totaling 35 months and 18 days (VND 5,733,000/month x 35 months + VND 5,733,000/month : 26 days x 18 days) = VND 204,624,000.

Additionally, the company was ordered to compensate Mr. A two months’ salary for the unilateral termination of the labor contract, equaled to VND 11,466,000.

Total: VND 216,090,000.

K Việt Nam Co., Ltd. is required to retroactively pay Social Insurance, Health Insurance, and Unemployment Insurance for Mr. Vương Quốc A for the period from November 2016 to November 2019, based on a salary of VND 5,733,000 per month.

Additionally, the appellate court also ruled on the obligations regarding delayed payments, court fees, and the rights and obligations of the parties during the execution phase of the judgment.

On September 11^th, 2020, K Việt Nam Co., Ltd. requested a review of the aforementioned Appellate Judgment through the cassation procedure.

In the Decision No. 01/2022/KN-LĐ dated April 22^nd, 2022, the Chief Justice of the High People’s Court in Hồ Chí Minh City appealed the aforementioned Appellate Labor Judgment, requesting the Judicial Committee of the High People’s Court in Hồ Chí Minh City to conduct a cassation trial to vacate the Appellate Judgment No. 19/2020/LĐ-PT dated July 30^th, 2020, of the People’s Court of Đồng Nai Province, and to uphold the First-instance Judgment No. 21/2019/LĐ-ST dated November 21^st, 2019, of the People’s Court of Biên Hòa City, Đồng Nai Province.

At the cassation trial, the representative of the High People’s Procuracy in Hồ Chí Minh City expressed the opinion: The Trial Panel is recommended to accept the appeal of the Chief Justice of the High People’s Court in Hồ Chí Minh City.

COURT’S OPINION:

[1] Mr. Vương Quốc A and K Việt Nam Co., Ltd. (hereinafter referred to as Company K) entered into Labor Contract No. 15/HĐLĐ/KD.14 on April 25, 2015, for a duration of 12 months, set to expire on April 25, 2016. During the term of this labor contract, the local Union of Company K was established, and Mr. Vương Quốc A was elected as the Chairman of the Provisional Executive Committee in accordance with Decision No. 111/QĐCN-CĐKCN dated November 25, 2015.

This position carried a term of 12 months, during which time the congress was to be conducted to elect the local Union’s Executive Committee by no later than November 25, 2016.

Consequently, Company K and Mr. Vương Quốc A executed Agreement No. 137/HĐLĐ/KD.16 to extend Mr. Vương Quốc A’s labor contract until November 25, 2016. This agreement explicitly stated, “The contract’s term is extended until the end of the Executive Committee’s term from November 25, 2015, to November 25, 2016.” The extension of the labor contract was in compliance with Clause 6, Article 192 of the Labor Code and Article 25 of the Union Law.

[2] Alongside extending Mr. A’s labor contract until the end of the Executive Committee’s term as mentioned above, Company K also issued several notices to Mr. A and the Union of Industrial Park B indicating that it would not renew the labor contract with Mr. A after the extension period expired.

These include the Decision No. 03/2016/QĐNV-KD dated March 24^th, 2016, the documents dated October 24^th, 2016, and November 7^th, 2016, and Decision No. 05/2016/QĐNV-KD dated November 25^th, 2016. During the appellate trial, Mr. A acknowledged receiving these decisions and notices from Company K regarding the non-renewal of his labor contract.

[3] As of October 24^th, 2016, when the Provisional Executive Committee of the Union held its congress, Mr. Vương Quốc A’s labor contract had only one month remaining. Nevertheless, Mr. Vương Quốc A and the Union of Industrial Park B included him in the list of candidates for the election of the local Union’s Executive Committee.

This inclusion was not in accordance with Guideline No. 398/HD-TLĐ dated March 28^th, 2012, issued by the Vietnam General Confederation of Labor, which stipulates: “Participants in the Executive Committee must not only meet the standards but also satisfy the following conditions: for re-election to the Executive Committee: must have enough working age to serve at least half of the term.”

Consequently, Mr. Vương Quốc A’s election as Chairman of the local Union’s Executive Committee of Company K for the 2016-2021 term, as well as the recognition by the Union of Industrial Park B in Decision No. 138/QĐCN-CĐKCN dated October 27^th, 2016, were invalid with respect to standards for both candidates and elected officials.

[4] After the extended labor contract term expired, Company K issued Decision No. 05/2016/QĐNV-KD dated November 25^th, 2016, to terminate the labor contract with Mr. Vương Quốc A. This action was in accordance with Clause 1, Article 36 of the Labor Code.

Therefore, Mr. Vương Quốc A’s lawsuit claiming that Company K’s decision to terminate his labor contract was unlawful is not well-founded. The first-instance court’s rejection of Mr. Vương Quốc A’s lawsuit was justified. The appellate court’s decision to amend the First-instance Judgment and accept Mr. Vương Quốc A’s lawsuit was incorrect according to the law.

In light of the foregoing,

IT IS DECIDED:

Pursuant to Articles 337, 343, and 349 of the Civil Procedure Code:

1. The Appeal No. 01/2022/KN-LĐ dated April 22^nd, 2022, of the Chief Justice of the High People’s Court in Hồ Chí Minh City, is accepted.
2. The Appellate Judgment No. 19/2020/LĐ-PT dated July 30^th, 2020, of the People’s Court of Đồng Nai Province is vacated, and the First-instance Judgment No. 21/2019/LĐ-ST dated November 21^st, 2019, of the People’s Court of Biên Hòa City, Đồng Nai Province, is upheld.
3. The cassation decision is legally effective from the date of issuance.

CONTENT OF THE CASE LAW:

“[3] As of October 24^th, 2016, when the Provisional Executive Committee of the Union held its congress, Mr. Vương Quốc A’s labor contract had only one month remaining. Nevertheless, Mr. Vương Quốc A and the Union of Industrial Park B included him in the list of candidates for the election of the local Union’s Executive Committee. This inclusion was not in accordance with Guideline…

Consequently, Mr. Vương Quốc A’s election as Chairman of the local Union’s Executive Committee of Company K for the 2016-2021 term, as well as the recognition by the Union of Industrial Park B in Decision No. 138/QĐCN-CĐKCN dated October 27^th, 2016, were invalid with respect to standards for both candidates and elected officials.

[4] After the extended labor contract term expired, Company K issued Decision No. 05/2016/QĐNV-KD dated November 25^th, 2016, to terminate the labor contract with Mr. Vương Quốc A. This action was in accordance with Clause 1, Article 36 of the Labor Code.

Therefore, Mr. Vương Quốc A’s lawsuit claiming that Company K’s decision to terminate his labor contract was unlawful is not well-founded. The first-instance court’s rejection of Mr. Vương Quốc A’s lawsuit was justified. The appellate court’s decision to amend the First-instance Judgment and accept Mr. Vương Quốc A’s lawsuit was incorrect according to the law.”

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