PRINCIPLES AND PROCEDURES FOR HANDLING LABOR DISCIPLINE 2025
Topic 31:
PRINCIPLES AND PROCEDURES FOR HANDLING LABOR DISCIPLINE
MSc. Lường Minh Sơn
SUMMARY OF THE CASE AND COURT DECISION
[Judgment No. 776/2023/LD-ST dated March 24, 2023, of the People’s Court of Thủ Đức City, Ho Chi Minh City.]
Summary of the Case:
Mr. Trần Hữu and N Company Limited (hereinafter referred to as Company N) entered into an indefinite-term employment contract. His job title was Assistant Supervisor, with duties assigned by superiors and the workplace designated as Company N.
On April 16, 2020, Mr. Nguyễn Thái, the head of the Mold Department (Mold Processing Department), instructed Mr. Trần Hữu (Assistant Supervisor) to temporarily suspend his work in the plastic grinding area and assist in the packaging area of the PC Department due to urgent workload demands.
That afternoon, while commuting home near the Station 2 overpass, Mr. Nguyễn Thái and Mr. Trần Hữu were involved in a minor traffic collision, leading to an argument and raised voices. On July 18, 2018, Company N transferred Mr. Trần Hữu to the Trimming Department (PPC) and later to the Plastic Injection Department (Mold), managed by Mr. Nguyễn Thái, without prior notice or any written document signed by an authorized manager regarding the reassignment of Mr. Trần Hữu’s job position.
On May 13, 2020, Company N convened a disciplinary meeting concerning Mr. Trần Hữu, citing the reasons: “Failure to comply with reasonable work assignments and displaying defiant behavior toward a manager” and “Intentionally disrupting order within Company N or engaging in threatening behavior toward others.” The minutes of the disciplinary review meeting stated: “… based on investigative evidence and a confirmation report from the Tân Phú Ward Police, Thủ Đức City, the violations committed by Mr. Trần Hữu have been clearly substantiated…,” leading Company N to conclude that Mr. Trần Hữu had violated Clause 6, Article 38 of the company’s internal regulations.
Consequently, Company N issued Decision No. 202005/01/QDKL on labor discipline against Mr. Trần Hữu, stating: “Reassignment from the current position of Assistant Supervisor to the new position of Operator; the department after demotion remains unchanged (Part Production); Mr. Trần Hữu’s basic salary remains unchanged following the demotion. Allowances and benefits will adjust according to the new position. The disciplinary measure is effective from May 18, 2020, to May 17, 2023 (3 years).”
Disagreeing with the disciplinary decision, Mr. Trần Hữu argued that Company N’s wrongful actions had damaged his reputation and deprived him of his rightful benefits. As a result, Mr. Trần Hữu initiated a lawsuit and sought resolution from the court.
Court Decision:
The court partially upheld Mr. Trần Hữu’s claims:
– Annulment of Decision No. 202005/01/QDKL dated May 13, 2020, issued by Company N regarding the disciplinary action against Mr. Trần Hữu;
– An order for Company N to reinstate Mr. Trần Hữu to the position of Assistant Supervisor, along with the corresponding salary, bonuses, allowances, and benefits appropriate to the supervisory role;
– An order for Company N to reassign Mr. Trần Hữu to the Mold Processing Department to align with his qualifications and expertise; …
COMMENTARY
I. Introduction
In the course of employment, it is inevitable that employees may engage in behaviors that hinder or harm the employer’s production and business activities. To mitigate such behaviors, the law permits employers to issue labor regulations as a tool to manage and control the labor process within their organization, ensuring uniformity, order, and efficiency. Consequently, labor discipline is regarded as an effective legal measure to safeguard the employer’s right to manage labor.
However, to prevent the abuse of authority and arbitrary actions by employers that could infringe upon the legitimate rights and interests of employees, labor law establishes specific principles for handling labor discipline. Accordingly, Article 122 of the 2019 Labor Code details these principles as follows [Previously, principles for handling labor discipline were stipulated under Article 122 of the 2012 Labor Code]:
First, the employer must prove the employee’s fault;
Second, the participation of the grassroots-level collective labor representative organization, of which the employee is a member, is required;
Third, relevant parties must participate, particularly the employee, who must be present and has the right to self-defense, or to be represented by a lawyer or the labor representative organization; in the case of an employee under 15 years of age, the participation of their legal representative is mandatory;
Fourth, the disciplinary action must be documented in writing;
Fifth, multiple forms of labor discipline must not be applied for a single violation of labor discipline;
Sixth, when an employee commits multiple violations simultaneously, only the highest applicable disciplinary measure corresponding to the most serious violation may be imposed;
Seventh, labor discipline must not be imposed on an employee during the following periods: (i) while on sick leave, recuperation, or leave with the employer’s consent; (ii) while in temporary detention or custody; (iii) while awaiting the results of an investigation, verification, and conclusion by a competent authority regarding violations specified in Clauses 1 and 2 of Article 125 of this Code; (iv) for female employees who are pregnant, on maternity leave, or raising a child under 12 months of age;
Eighth, labor discipline must not be imposed on an employee who violates labor discipline while suffering from a mental illness or another condition that deprives them of the ability to recognize or control their actions.
Thus, when adjudicating disputes related to labor discipline, courts typically assess whether the employer has adhered to these principles and followed the required procedures when imposing labor discipline on an employee.
In Judgment No. 776/2023/LD-ST dated March 24, 2023, of the People’s Court of Thủ Đức City, Ho Chi Minh City (hereinafter referred to as “Judgment 776/2023/LD-ST”), the court examined aspects related to fault, the composition of the disciplinary meeting participants, the statute of limitations, and the principles applied in the disciplinary process to issue a lawful disciplinary decision.
II. Legal Issues
- Determination and Proof of Fault
In an employment relationship, the employee is in a weaker position compared to the employer. Therefore, the responsibility to determine and prove fault for the purpose of imposing labor discipline is assigned to the employer. This allocation is entirely appropriate and reasonable, as it helps prevent employers from abusing their authority or placing employees at a further disadvantage in this relationship.
The process of determining and proving fault is carried out by the employer as follows: When an employee’s violation of labor discipline is discovered at the time of the incident, the employer prepares a violation report and notifies the grassroots-level labor representative organization of which the employee is a member, as well as the legal representative of an employee under 15 years of age. If the employer discovers the violation after the incident has occurred, they must collect evidence to substantiate the employee’s fault [Clause 1, Article 70 of Decree No. 145/2020/ND-CP].
In Judgment 776/2023/LD-ST, the court determined:
“Based on the case file, it is noted that on April 16, 2020, Mr. Nguyễn Thái, head of the Mold Department (Mold Processing Department), instructed Mr. Trần Hữu (Assistant Supervisor) to temporarily suspend work in the plastic grinding area and assist in the packaging area of the PC Department due to urgent workload demands.
According to Clause 1.2, Article 13 of the company’s labor regulations, a transfer to another department requires at least three days’ prior notice, rendering Mr. Nguyễn Thái’s request non-compliant with the regulations.
Furthermore, in the minutes of the disciplinary review meeting dated May 12, 2020, under Section 1a, it is recorded (excerpt): ‘… based on investigative evidence and a confirmation report from the Tân Phú Ward Police, (former) District 9, the violations by Mr. Trần Hữu have been clearly substantiated…’ (end excerpt), leading the company to conclude that Mr. Trần Hữu violated Clause 6, Article 38 of the company’s internal regulations.
In a document dated May 11, 2020, Mr. Nguyễn Thái submitted a request to the Tân Phú Ward Police, Thủ Đức City (formerly District 9), seeking confirmation that he had filed a report on April 21, 2020. The police confirmed: ‘On April 21, 2020, the Tân Phú Ward Police, Thủ Đức City (formerly District 9), received a report from Mr. Nguyễn Thái regarding an incident in which he was insulted by Mr. Trần Hữu, affecting his dignity; the matter is currently under review and processing by the ward police.’
On the afternoon of April 16, 2020, Mr. Nguyễn Thái did not immediately report the incident to the ward police; it was only five days later, on April 21, 2020, that he did so. On May 11, 2020, Mr. Nguyễn Thái requested police confirmation ‘to submit to the company,’ yet he provided no evidence to substantiate that Mr. Trần Hữu had insulted him.
Consequently, there was no confrontation between Mr. Nguyễn Thái and Mr. Trần Hữu regarding the incident. Thus, the matter was not formally documented, nor was there evidence from a competent authority.
At the disciplinary meeting, the company applied Clause 8, Article 38 of its internal regulations, asserting that Mr. Trần Hữu ‘failed to comply with reasonable work assignments and exhibited defiant behavior toward a manager.’ Therefore, the company’s rationale for demoting Mr. Trần Hữu was deemed invalid, providing the adjudication panel with grounds to partially uphold Mr. Trần Hữu’s claims.”
This assessment by the court demonstrates that the employer failed to adequately and lawfully determine and prove the employee’s fault. As a result, there was insufficient basis to uphold the company’s disciplinary decision.
- Participants in the Labor Discipline Hearing
The participation of entities as prescribed by law in a labor discipline hearing ensures that the evaluation and review of the matter are conducted objectively, comprehensively, and impartially. The participants in the hearing must be fully and clearly informed about the labor discipline proceedings concerning the employee.
According to Decree No. 145/2020/ND-CP, at least five working days prior to the scheduled labor discipline hearing, the employer must notify the content, time, and location of the hearing, the name of the employee subject to discipline, and the alleged disciplinary violation to all required participants as stipulated under Points b and c, Clause 1, Article 122 of the 2019 Labor Code. This ensures that these participants receive the notification before the hearing takes place.
Upon receiving the employer’s notification, the required participants under Points b and c, Clause 1, Article 122 of the 2019 Labor Code must confirm their attendance with the employer. If any required participant is unable to attend the hearing at the notified time and location, the employee and employer shall negotiate a change in the time or location of the hearing; if no agreement is reached, the employer shall decide the time and location [Points b and c, Clause 2, Article 70 of Decree No. 145/2020/ND-CP].
Regarding the labor discipline hearing held on May 12, 2020, the following inaccuracies were identified:
“1. Pursuant to Clause 6, Article 122 of the 2019 Labor Code and Clause 1, Article 70 of Decree No. 145/2020/ND-CP, at the time the violation occurred, the company was required to prepare a violation report concerning the employee and notify the company’s labor union, but the company failed to do so.
- Pursuant to Clauses 1 and 2, Article 123 of the 2019 Labor Code and Points a and b, Clause 2, Article 70 of Decree No. 145/2020/ND-CP, the company must provide notification at least five days prior to the hearing. If the hearing cannot proceed as notified, the company and Mr. Trần Hữuwere required to agree on a new time and location. In reality, no such agreement occurred; the company held the disciplinary review meeting on May 12, 2020, immediately following the invitation letter dated May 11, 2020, without any written notification to Mr. Trần Hữu.
- Pursuant to Clause 3, Article 70 of Decree No. 145/2020/ND-CP, ‘The content of the labor discipline hearing must be documented in minutes, approved before the hearing concludes, and the hearing must bear the signatures of the participants as required by law. If any participant does not sign the minutes, the recorder must specify their full name and reason for not signing (if any) in the minutes.’ However, in the hearing minutes, the representative of the executive committee of the labor union signed and dated the document May 20, 2020, indicating that the minutes did not bear the union representative’s signature on the day of the hearing, with no reason provided in the minutes. Furthermore, the minutes of the disciplinary review hearing on May 12, 2020, also lack the company’s official confirmation seal.”
In other words, it raises the question of whether the labor discipline hearing included the participation of the labor representative organization as required by law. Thus, while the minutes of the hearing on May 12, 2020, did not comply with procedural requirements, the disciplinary decision was issued on May 13, 2020. This prompts the question: Is this disciplinary decision lawful and valid?
From the issues outlined above, it is evident that the full participation of all required entities in the labor discipline hearing is a critical prerequisite that must be ensured to conduct the disciplinary process in accordance with the law.
- Statute of Limitations for Handling Labor Discipline
The statute of limitations is a period prescribed by law, upon the expiration of which legal consequences arise for the relevant party under conditions specified by law [Clause 1, Article 149 of the 2015 Civil Code].
In labor law, the statute of limitations for handling labor discipline is set at a maximum of 6 months from the date the violation occurs. However, if the violation directly involves finance, property, or the disclosure of technological or business secrets of the employer, the statute of limitations extends to a maximum of 12 months [Clause 1, Article 123 of the 2019 Labor Code]. This period is calculated from the date the violation occurs, not from the date it is discovered.
This provision in labor law is precise and ensures the protection of employees’ rights. In practice, there may be instances where an employee commits a violation earlier, and the employer possesses evidence to substantiate it. However, at that time, the employer may choose to overlook the violation because they still wish to utilize the employee’s labor. Later, when the employer no longer needs the employee, they might present this unfavorable evidence to impose labor discipline, potentially escalating to the severest form—dismissal—to terminate the employment contract.
Such actions significantly disrupt the order and development of employment relationships in particular and social life in general. Therefore, the statute of limitations for handling labor discipline must be calculated from the date of the violation, not from the date of its discovery.
Moreover, in the context of employment relationships, the state and the law grant employers the authority to manage labor. Consequently, if an employer, in the course of exercising this management authority, fails to promptly detect an employee’s violation and only identifies it after the legally prescribed time limit has elapsed, they must bear the responsibility for their delay and are precluded from imposing disciplinary measures on the employee.
In the situation under review, the company identified Mr. Trần Hữu’s violations as “failure to comply with reasonable work assignments and exhibiting defiant behavior toward a manager,” occurring on April 16, 2020, and “intentionally disrupting order within Company N or engaging in threatening behavior toward others,” also occurring on April 16, 2020. Accordingly, the applicable statute of limitations for handling labor discipline can be considered 6 months.
As of the issuance of Disciplinary Decision No. 202005/01/QDKL on May 13, 2020, the action remained within the statute of limitations. This aligns with the principles of labor discipline handling. Thus, this determination is entirely appropriate and consistent with legal provisions.
- Principles of Disciplinary Action
In the case under review, aside from disputes regarding the proof of fault and the composition of participants in the disciplinary process, the parties did not contest the principles applied in handling labor discipline. Therefore, the author introduces a second case to further examine this issue.
The details of the second case are as follows:
“Ms. Ngọc worked at P.D. Commercial Joint Stock Bank (hereinafter referred to as P.D. Bank) under various employment contracts and contract appendices. On April 22, 2014, P.D. Bank appointed Ms. Ngọc to the position of Head of the C.V.L. Savings Fund at the P.L. Branch. On August 22, 2014, the bank conducted an inspection of the C.V.L. Savings Fund and documented Ms. Ngọc’s violations in a report, which she acknowledged and signed.
On September 10, 2014, P.D. Bank held a meeting to address Ms. Ngọc’s violation of labor discipline as outlined in the report. Subsequently, the bank issued Decision No. 360/2014/QD on labor discipline, imposing a written reprimand as the disciplinary measure against Ms. Ngọc. On September 29, 2014, P.D. Bank issued Decision No. 2536/2014/QD, reassigning Ms. Ngọc to the position of Head of the Sales Team at the Direct Sales Center, Retail Banking Division, at the Head Office, effective from September 30, 2014, to September 29, 2015.
On February 4, 2015, P.D. Bank issued Decision No. 239/2015/QD, revoking the disciplinary Decision No. 360/2014/QD dated September 10, 2014. On February 5, 2015, the bank issued Decision No. 241/2015/QD, transferring Ms. Ngọc from her role as Head of the C.V.L. Savings Fund at the P.L. Branch to the position of Head of the Sales Team at the Direct Sales Center, Retail Banking Division, at the Head Office, for a term of 60 working days, from February 9, 2015, to April 27, 2015. On April 27, 2015, P.D. Bank convened a meeting to address Ms. Ngọc’s labor discipline violation.
On May 4, 2015, P.D. Bank issued Decision No. 90a/2015/QD, imposing the disciplinary measure of demotion on Ms. Ngọc for violating Clauses 10 and 17, Article 48 of the bank’s labor regulations. On the same day, the bank issued Decision No. 827/2015/QD, assigning Ms. Ngọc to the position of Business Development Specialist at the Direct Sales Center, Retail Banking Division, at the Head Office, effective from May 4, 2015.
Ms. Ngọc disagreed with Decision No. 90a/2015/QD dated May 4, 2015, and Decision No. 827/2015/QD, arguing that she had been subjected to disciplinary action in violation of applicable principles. She demanded that P.D. Bank reinstate her position and enter into an indefinite-term employment contract with the title of Acting Director of the Transaction Office, pay the outstanding salary differentials, compensate for health and emotional damages, and issue an apology.
This matter remains in dispute between the parties. Ms. Ngọc contended that for the same violation identified in the report dated August 22, 2014, she was subjected to labor discipline twice: first, on September 10, 2014, with a written reprimand, and second, on April 27, 2015, with a demotion.
P.D. Bank disagreed, asserting: ‘The disciplinary decision is an internal decision of the enterprise; thus, upon realizing that a decision it issued was not in compliance with the law, the enterprise has the right to revoke it and issue a new decision that complies with legal provisions.’ [Excerpt from Judgment No. 1955/2016/LD-ST dated November 24, 2016, of the People’s Court of District 1, Ho Chi Minh City.]”
Thus, the dispute in this situation arises from determining whether there was a violation of the principle that “multiple forms of labor discipline must not be applied for a single violation of labor discipline.” How should this issue be understood in practice when applying legal provisions?
In the course of resolving the case, the court made the following determinations:
“Regarding Disciplinary Decision No. 360/2014/QD dated September 10, 2014, issued based on the disciplinary hearing held on September 10, 2014, the minutes of the hearing indicate that the labor union representative, Ms. N.T.T.M., a member of the Executive Committee of the Labor Union, participated without a written authorization from the Union President.
Additionally, the minutes lack the signature of Mr. L.V.D., a participant in the hearing. Furthermore, at the trial, the plaintiff confirmed that several days after the disciplinary hearing on September 10, 2014, she was sent the minutes via email for review before officially signing them, and she was unaware of why Mr. D.’s signature was missing. Moreover, the bank’s application of Clause 2, Article 49 of its labor regulations to impose discipline was not appropriate for the plaintiff’s violation.
Thus, Disciplinary Decision No. 360/2014/QD dated September 10, 2014, based on the minutes of the hearing on September 10, 2014, was issued in violation of principles, procedures, and the applicable provisions of the agency’s internal regulations. Consequently, the defendant’s issuance of Decision No. 238/2015/QD dated February 4, 2015, to revoke Disciplinary Decision No. 360/2014/QD dated September 10, 2014, was lawful.”
Subsequently, the court further determined:
“Since the disciplinary decision was revoked by the bank, it is deemed that the plaintiff’s violation had not been addressed. Therefore, after revoking the disciplinary decision, the defendant conducted a new disciplinary hearing and issued Disciplinary Decision No. 90a/2015/QD dated May 4, 2015, which complies with the principle that each violation is subject to discipline only once, as stipulated in Clause 2, Article 123 of the 2012 Labor Code. The plaintiff’s assertion that the disciplinary action under Decision No. 90a/2015/QD dated May 4, 2015, violated the principle of imposing discipline only once per violation lacks basis.”
According to the author, both of the court’s determinations above are inconsistent with legal provisions, for the following specific reasons:
Regarding the first determination, the court’s conclusion that Decision No. 238/2015/QD dated February 4, 2015, revoking Disciplinary Decision No. 360/2014/QD dated September 10, 2014, was lawful, based on the arguments provided, is not entirely appropriate.
Under Article 123 of the 2012 Labor Code and Clause 2, Article 30 of Decree No. 05/2015/ND-CP, which govern the participants in a labor discipline hearing, the hearing must proceed with the presence of all required participants as notified under Clause 1, Article 30 of Decree No. 05/2015/ND-CP, in addition to the employee and employer as the primary parties in the relationship.
Concerning the labor union, Clause 1, Article 30 of Decree No. 05/2015/ND-CP specifies that the employer must notify the Executive Committee of the grassroots-level Labor Union or the Executive Committee of the higher-level Labor Union where no grassroots union has been established. Thus, the court’s observation that “the labor union representative, Ms. N.T.T.M., a member of the Executive Committee of the Labor Union, participated without a written authorization from the Union President” raises the question of whether this complies with legal provisions.
Alternatively, it could be entirely appropriate, as the law only requires participation by a member of the Executive Committee of the Labor Union. If the Executive Committee unanimously agrees to designate a specific member—such as Comrade A or Comrade B—to attend the hearing pursuant to a lawful invitation, is it necessary for that member, if not the Union President, to have a written authorization from the President?
Next, the court’s assertion that “the minutes also lack the signature of Mr. L.V.D. (a participant in the hearing)” as one of the reasons rendering Disciplinary Decision No. 360/2014/QD dated September 10, 2014, invalid may not be entirely appropriate. According to Clause 3, Article 30 of Decree No. 05/2015/ND-CP, “…the minutes must bear the signatures of all participants required under Clause 1, Article 30 of Decree No. 05/2015/ND-CP and the recorder.” Accordingly, the entities required to sign include: (i) the employer; (ii) the representative of the Executive Committee of the Labor Union; and (iii) the employee (or the parent or legal representative of an employee under 18 years of age).
Here, it is necessary to ascertain whether Mr. D. was one of these required entities. If Mr. D. was not among the mandatory participants listed above and was merely an additional attendee, does the absence of his signature constitute grounds to deem the minutes unlawful, thereby rendering the disciplinary decision illegal and subject to revocation?
Regarding the second determination, the court stated: “Since the disciplinary decision was revoked by the bank, it is deemed that the plaintiff’s violation had not been addressed. Therefore, after revoking the disciplinary decision, the defendant conducted a new disciplinary hearing and issued Disciplinary Decision No. 90a/2015/QD dated May 4, 2015, which adheres to the principle that each violation is subject to discipline only once, as stipulated in Clause 2, Article 123 of the 2012 Labor Code.”
This can be interpreted as the court recognizing the employer’s autonomy, aligning with the bank’s argument that a disciplinary decision is an internal decision of the enterprise. Consequently, when the enterprise realizes that a decision it issued does not comply with legal provisions, it has the right to revoke it at any time and issue a new, legally compliant decision. However, the author disagrees with this perspective.
The reason is that such an interpretation would grant employers excessive discretion in handling labor discipline. Employers could act improperly—whether due to minor or significant errors, unintentionally or deliberately to intimidate or test the employee’s reaction—then revoke the decision and reimpose discipline multiple times. This would significantly undermine the legitimate rights and interests of employees, particularly their honor and dignity.
Moreover, in terms of timing, Disciplinary Decision No. 90a/2015/QD dated May 4, 2015, and Disciplinary Decision No. 360/2014/QD dated September 10, 2014, were issued nearly nine months apart. If Decision No. 360/2014/QD had taken effect, the employee would have had the disciplinary record expunged after three months of enforcement [Clause 1, Article 126 of the 2019 Labor Code].
So, how could the employer revoke it and issue a new disciplinary decision while treating the violation as unaddressed? During the period when the initial disciplinary decision was in effect, the employee was still obligated to comply with it. Does this ensure the principle of “protecting employees” under labor law? [See also: Lường Minh Sơn (2019), “Time Limits and Statutes of Limitations in the Labor Discipline Regime under Vietnamese Labor Law,” Legal Science Journal, Issue 07 (128), pp. 37–50.]
III. Conclusion
The principles of handling labor discipline are guiding doctrines that are consistent and mandatory, requiring all parties—especially employers—to adhere to them. Compliance with these principles ensures the best protection of the legitimate rights and interests of all parties, preventing arbitrary actions and subjective impositions lacking objectivity.
However, as analyzed in the situation, the understanding and uniform interpretation of these principles still reveal inconsistencies. Therefore, while awaiting more unified regulations, the author suggests that the general principle of labor law—protecting employees—should be applied to resolve issues in the most convincing manner.
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