PAY FOR WORK SUSPENSION 2025
Topic 27:
PAY FOR WORK SUSPENSION
Senior Lecturer, MSc. Đoàn Công Yên
SUMMARY OF THE CASE AND THE COURT’S DECISION
[Judgment No. 42/2022/LD-ST dated July 6, 2022, by the People’s Court of District 1, Ho Chi Minh City, regarding a dispute over wages and compensation for damages.]
Case Summary:
Mr. Kevin and JH Group Co., Ltd. (abbreviated as JH Company) signed Labor Contract No. 01/JH GROUP LTD (undated), under which Mr. Kevin worked as a head chef at 24-26 H Street, N Ward, M District, Ho Chi Minh City. The contract was valid for five years, from November 1, 2019, to October 31, 2024. His monthly salary was 6,000 USD, paid in U.S. dollars, exclusive of taxes, with a work schedule of six days per week.
Starting March 2020, JH Company ceased assigning tasks and stopped paying Mr. Kevin’s salary. On October 13, 2020, Mr. Kevin sent a notice of unilateral termination of the labor contract, requesting JH Company to pay his wages and compensation as per the labor contract’s terms. JH Company did not comply, prompting Mr. Kevin to file a lawsuit demanding payment for wages from March 1, 2020, to October 16, 2020 (7.5 months), amounting to 45,000 USD.
Court Decision:
Based on Articles 90 and Clause 1 of Article 99 of the 2019 Labor Code, JH Company was ordered to pay Mr. Kevin the full salary specified in the labor contract, amounting to 45,000 USD.
COMMENTARY
I. Introduction
Work suspension pay, more fully known as wages for employees during periods of work suspension, refers to a legal provision governing the rights and obligations of employees and employers concerning wages during periods when employees do not work, excluding paid rest periods.
According to Article 99 of the 2019 Labor Code, “If work is suspended due to power or water supply issues beyond the employer’s control, or natural disasters, fires, dangerous epidemics, enemy-inflicted damage, relocation of operations as required by competent state authorities, or economic reasons, the two parties shall agree on work suspension pay as follows:
a) For suspensions of 14 working days or less, work suspension pay shall be agreed upon but must not be lower than the minimum wage;
b) For suspensions exceeding 14 working days, the two parties shall agree on the pay, ensuring that for the first 14 days, it is not lower than the minimum wage.”
Thus, under Article 99, wages for work suspension are determined based on two key factors:
- The fault or cause leading to the suspension; and
- The salary used as the basis for calculating work suspension pay.
II. Legal Issues
- Scenarios of Work Suspension
Work suspension can be categorized based on the fault of the parties in labor relations: suspension due to the employer’s fault, the employee’s fault, or neither party’s fault.
First, suspension due to the employer’s fault.
In the case between Mr. Kevin and JH Company, the trial panel found that “the defendant signed a labor contract with the plaintiff but failed to assign work as agreed, nor provided valid reasons for the suspension to gain the plaintiff’s consent, which constitutes the defendant’s fault.” Therefore, based on Articles 90 and Clause 1 of Article 99 of the 2019 Labor Code, JH Company was ordered to pay Mr. Kevin his full salary as stipulated in the labor contract.
Similarly, in Judgment No. 30/2017/LD-PT dated September 29, 2017, by the Tân Thành District People’s Court, Bà Rịa-Vũng Tàu Province, the court determined: “Based on the case file; evidence collected by the court; and testimonies at trial, the panel finds that: Company M officially ceased employing all workers from October 2014. On February 1, 2015, Company M sent a notice to the Industrial Zone Management Board of Bà Rịa-Vũng Tàu Province, stating the company’s temporary cessation of operations starting February 1, 2015.
Thus, it is established that Company M officially suspended operations from February 1, 2015. The company’s work suspension prior to this date was not communicated to employees in writing, making the defendant entirely at fault. Furthermore, from October 2014 to January 2015, Company M failed to pay wages and other benefits to employees, violating its payment obligations under the contract.” The panel implied this as a case of work suspension caused by the employer’s fault.
Second, suspension due to the employee’s fault.
In another dispute outlined in Judgment No. 11/2006/LD-PT dated April 4, 2006, by the Ho Chi Minh City People’s Court, Ms. Nguyễn Thị Anh had been employed by TB Cooperative Union since 1983. On January 1, 2001, Ms. Anh signed a labor contract with the union. On July 23, 2001, she was transferred to work as a salesperson at Âu Cơ Tân Bình Store, a role she accepted without complaint.
On May 30, 2003, the director issued a notice suspending business operations at the store. Subsequently, on June 9, 2003, Ms. Anh was temporarily transferred to the union office awaiting reassignment. On June 28, 2003, the director issued another notice temporarily suspending Ms. Anh’s work and offering a suspension allowance of 75% of her total income (basic salary and sales commission). On October 15, 2003, Ms. Anh was reassigned to a new role as a marketing representative at Lerver Distributor, effective October 20, 2003. She declined the new position, filed complaints, and eventually sued.
The appellate court ruled: “After the suspension period, the cooperative had reassigned work to Ms. Anh. She should have reported to her new role and, if she found the work unsuitable during execution, she had the right to file a complaint to resolve the dispute. However, Ms. Anh failed to report to work starting October 2003 despite receiving a salary advance of 4,000,000 VND for four months (October 2003 to January 2004) as requested. This constitutes voluntary suspension by Ms. Anh, making her entirely at fault.”
Third, suspension not caused by the fault of either the employer or the employee.
Under Clause 3, Article 99 of the 2019 Labor Code, “If work is suspended due to power or water supply issues beyond the employer’s control, natural disasters, fires, dangerous epidemics, enemy-inflicted damage, relocation of operations as required by competent state authorities, or economic reasons, the two parties shall agree on work suspension pay.”
During the Covid-19 pandemic, employees were required to stop working at most workplaces. The Department of Labor Relations and Wages under the Ministry of Labor, Invalids and Social Affairs issued Official Dispatch No. 264/QHLĐTL-TL to provincial and municipal Departments of Labor, Invalids and Social Affairs regarding pay for work suspension during this period. According to the guidance, work suspension pay must be determined based on Article 99 of the 2019 Labor Code, taking into account the causes of suspension (employer’s fault, employee’s fault, or external factors).
For employees forced to stop working due to direct Covid-19 impacts, such as:
(i) being quarantined following orders from competent authorities;
(ii) work locations or residences being locked down as mandated by competent authorities;
(iii) temporary suspension of business operations or parts of businesses to prevent and control the epidemic per official directives;
(iv) businesses or parts of businesses being unable to operate because employers or other employees were under quarantine or had not returned to work, the wages during the suspension are determined under Clause 3, Article 99 of the Labor Code.
- Salary Used as Basis for Work Suspension Pay
According to regulations, the basis for calculating employees’ work suspension pay under Clause 1, Article 99 of the 2019 Labor Code is “the salary specified in the labor contract.” This generally includes the basic salary and additional allowances or supplements. The total of these components typically represents the actual salary employees receive from employers.
However, in many instances, labor contracts only list the basic salary, while other payments are omitted. This creates challenges for employees in proving their actual earnings, resulting in potential harm to their rights and benefits.
In the case between Ms. Phan Thị and Company M [Judgment No. 30/2017/LD-PT dated September 29, 2017, by the Tân Thành District People’s Court, Bà Rịa-Vũng Tàu Province], Ms. Phan Thị worked under Labor Contract No. 325/HDLD dated July 20, 2012, and its appendix No. 21/PLHD/2014 dated January 1, 2014, with a base salary of 2,570,000 VND.
In October 2014, Company M held a meeting and instructed workers to cease work, committing to pay 100% of their base salaries. However, Ms. Phan Thị continued working through November 2014 without receiving wages. In her lawsuit, she requested Company M to pay her wages for October and November 2014, as well as three months of suspension pay from December 2014 to February 2015, amounting to 12,850,000 VND.
The trial panel determined: “Regarding the plaintiff’s claim for actual wages for October and November 2014, the panel finds that during the trial preparation and court hearings, the plaintiff did not provide evidence to substantiate her claim. Therefore, the panel has no grounds to consider it and must reject the claim. However, the panel accepts the claim for suspension pay at the base salary rate, which aligns with legal provisions.”
However, under Clause 1, Article 91 of the 2015 Civil Procedure Code, “A litigant requesting the court to protect their legitimate rights and interests must gather, provide, and submit evidence to the court to prove their claim is valid and legitimate, except in cases where…; If the litigant is an employee in a labor case and cannot provide or submit evidence because it is managed or retained by the employer, the employer must supply the evidence to the court;…”
Based on labor law principles protecting employees, the court in this case should have required Company M to provide evidence related to Ms. Phan Thị’s actual wages. If Company M failed to provide such evidence and Ms. Phan Thị’s testimony on her actual wages was inconclusive, the panel could legitimately apply her base salary as the basis for calculating suspension pay.
- Duration of Work Suspension
Typically, the duration of work suspension is calculated from the day the employee stops working until the employer notifies them to resume work or the labor contract is legally terminated. In this case, the suspension period claimed by Mr. Kevin extended from March 2020 to October 16, 2020. This claim was justified because, starting March 2020, JH Company stopped assigning work and paying wages to Mr. Kevin. October 16, 2020, marked the date Mr. Kevin officially ceased employment following his notice of unilateral termination of the labor contract sent to JH Company.
In the case between Ms. Phan Thị and Company M, the employer issued a suspension notice but did not subsequently inform the employees to resume work or formally terminate the labor contract. According to the case files, Company M issued a notice of suspension but did not directly notify employees about it. Consequently, determining the period of work suspension becomes challenging.
Employees may argue that the suspension period should be counted from the date of the notice to the date the dispute arose or the filing of a lawsuit. Conversely, the employer may calculate it from the suspension notice to the date of cessation of operations or a decision on dissolution or bankruptcy.
The trial panel concluded, “Since the defendant issued a suspension notice effective February 1, 2015, it is only reasonable to order the defendant to pay the plaintiff up to 4 months’ wages,” meaning the suspension period was calculated from the issuance of the notice to the announcement of the employer’s cessation of operations. To justify this conclusion, the panel further stated, “Based on the above analysis, the panel has sufficient grounds to declare the termination of the labor contract between Ms. Phan Thị and Company M effective February 1, 2015. The defendant must pay suspension wages to the employee for the period from October 2014 to January 2015 as stipulated by law.”
This interpretation by the trial panel seems appropriate. However, it would be more logical to calculate the suspension period for Ms. Phan Thị from the date she received the suspension notice to the date she was formally notified of the company’s cessation of operations. As highlighted in the ruling, although Company M issued a cessation notice, it was not communicated to the employees. Internal notices by the employer that lack external monitoring or verification mechanisms pose legal ambiguities. Reassessing such documents could better protect employees’ rights and interests.
III. Conclusion
Practical implementation of labor relations in Vietnam has revealed various reasons leading to work suspensions. Depending on the fault of the parties, employers may or may not be obligated to pay wages to employees. The wages employees are entitled to depend on the number of suspension days and the salary used as a basis for calculation. However, given the variety of wage components with different terminologies and forms, inaccuracies in calculating work suspension pay can result in significant harm to employees.
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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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