REVOCATION OF DISCIPLINARY DECISIONS AND THE PRINCIPLE OF “ONLY ONE FORM OF DISCIPLINE MAY BE APPLIED FOR A SINGLE VIOLATION OF LABOR DISCIPLINE”
Topic 33:
REVOCATION OF DISCIPLINARY DECISIONS AND THE PRINCIPLE OF “ONLY ONE FORM OF DISCIPLINE MAY BE APPLIED FOR A SINGLE VIOLATION OF LABOR DISCIPLINE”
PhD. Đinh Thị Chiến
SUMMARY OF THE CASE AND COURT DECISION
[Judgment No. 1955/2016/LĐ-ST dated November 14, 2016, of the People’s Court of District 1, Ho Chi Minh City, concerning a dispute over an employment contract and labor discipline handling.]
Summary of the Case:
Ms. Võ Ngọc worked for PĐ Bank under an employment contract regime starting September 1, 2012. At the time of the dispute, she was employed under Employment Contract No. 155/2012/HĐ12T-OCB, serving as the Head of the CVL Savings Fund at the Phú Lâm Branch.
On August 22, 2014, PĐ Bank conducted an inspection of the CVL Savings Fund and documented Ms. Ngọc’s violations (with her acknowledgment) as follows:
– Violation of regulations on the timing of transferring accounting vouchers to the Post-Audit Department, as stipulated in the rules on transferring accounting vouchers in Ho Chi Minh City to the Post-Audit Department of the Accounting Division at the Head Office, issued under Decision No. 330/2013/QĐ-OCB by the General Director.
– Numerous transaction vouchers lacked customer signatures.
– In several instances of opening new savings accounts, closing accounts, or partial withdrawals, Ms. Ngọc instructed employees to perform these tasks and personally delivered funds to customers, violating Clause 1, Article 8 of Decision No. 165A/2014/QĐ-OCB dated March 31, 2014.
– Closing savings accounts without retrieving the savings passbooks for record-keeping, in breach of Article 13 of Decision No. 129/2012/QĐ-OCB dated March 14, 2012.
– Delegating the sealing of the safe entirely to tellers and controllers without witnessing the process, violating Clause 4, Article 16 of Decision No. 20/2013/QĐ-OCB dated January 14, 2013.
On September 10, 2014, PĐ Bank held a meeting to address Ms. Ngọc’s disciplinary violations related to the aforementioned breaches of internal labor regulations. On the same day, pursuant to Clause 2, Article 49 of the Internal Labor Regulations, the bank issued Decision No. 360/2014/QĐ-OCB imposing a written reprimand as the form of discipline.
On February 4, 2016, PĐ Bank issued Decision No. 238/2015/QĐ-NS&ĐT, revoking Decision No. 360/2014/QĐ-OCB dated September 10, 2014, on the grounds that the disciplinary decision had been issued with procedural and substantive errors.
On February 5, 2015, PĐ Bank issued Decision No. 141/2015/QĐ-OCB-NS, transferring Ms. Ngọc from her position as Head of the CVL Savings Fund to the role 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, PĐ Bank reconvened a meeting to address Ms. Ngọc’s disciplinary violations. On May 4, 2015, based on Clauses 10 and 17, Article 48 of the Internal Labor Regulations, the bank issued Decision No. 90a/2015/QĐ-OCB imposing the disciplinary measure of demotion on Ms. Ngọc. On the same day, PĐ Bank issued Decision No. 827/2015/QĐ-NSĐT, assigning Ms. Ngọc to the position of Business Development Specialist at the Direct Sales Center, Retail Banking Division at the Head Office, effective May 4, 2015.
Ms. Ngọc filed a lawsuit against PĐ Bank, requesting the annulment of Decision No. 90a/2015/QĐ-OCB dated May 4, 2015, and Decision No. 827/2015/QĐ-NSĐT dated May 4, 2015, as well as reinstatement to her position and the signing of an indefinite-term employment contract with the title of Acting Director of the Transaction Office. The defendant rejected all of the plaintiff’s claims.
The Trial Panel concluded that since PĐ Bank had revoked the reprimand decision, it was as if no disciplinary action had been taken. At that point, the statute of limitations for imposing labor discipline had not expired, allowing the bank to reinitiate disciplinary proceedings. The subsequent disciplinary action was conducted in accordance with proper procedures, and Decision No. 90a/2015/QĐ-OCB imposing demotion was well-founded. Decision No. 827/2015/QĐ-NS&ĐT dated May 4, 2015, was deemed lawful as it arranged work for the employee following her demotion.
Court Decision:
The court rejected Ms. Ngọc’s requests to annul the dismissal decision and related claims for damages.
COMMENTARY
I. Introduction
Disciplinary liability is a form of legal responsibility that an employer imposes on an employee who violates labor discipline. Employers have the authority to establish internal labor regulations, and employees are obligated to comply with them. When an employee breaches these regulations, thereby violating labor discipline, the employer has the right to impose disciplinary measures. The law grants employers this prerogative to maintain labor discipline, meet the general needs of labor utilization, and ensure productivity and efficiency in employment. However, to protect employees, the law also imposes strict limitations, principles, and procedural requirements to curb potential abuses of power by employers.
The circumstances in Judgment No. 1955/2016/LĐ-ST dated November 14, 2016, of the People’s Court of District 1, Ho Chi Minh City (hereinafter referred to as “Judgment 1955/2016/LĐ-ST”), occurred on April 28, 2014. Thus, the applicable labor law documents in this case were the 2012 Labor Code and its implementing regulations. Notably, the provisions of the 2012 Labor Code applied in this case remain unchanged in the 2019 Labor Code.
II. Legal Issues
- Revocation of a Disciplinary Decision and Reimposition of Discipline
In labor relations, employers have the authority to issue regulations to manage and direct labor. This is a unilateral right of the employer, and, in principle, the employer may issue a decision to amend or revoke a previously issued decision. Accordingly, in the realm of labor discipline, employers are also permitted to withdraw erroneous disciplinary decisions and replace them with decisions that comply with the law.
In the case outlined in Judgment 1955/2016/LĐ-ST, PĐ Bank argued that one reason for issuing Decision No. 238/2015/QĐ-NS&ĐT to revoke Decision No. 360/2014/QĐ-OCB was that the latter had applied an incorrect form of discipline. According to the bank’s internal labor regulations, Ms. Ngọc’s disciplinary violations, as documented on August 22, 2014, warranted either an extension of the salary increase period or demotion. However, the bank only imposed a written reprimand. The bank’s argument is unpersuasive because the imposition of disciplinary liability on an employee falls within the employer’s discretionary authority in labor relations.
If an employee violates labor discipline and the employer chooses not to impose discipline or applies a lighter form of discipline than stipulated in the internal labor regulations, such actions are not deemed unlawful. Applying a lighter disciplinary measure than provided for in the regulations reflects leniency on the employer’s part, which benefits the employee and is not prohibited by law. Therefore, PĐ Bank’s imposition of a written reprimand on Ms. Ngọc in this instance was not contrary to the law.
So, can an employer revoke a reprimand decision to replace it with demotion? Suppose that immediately after issuing the reprimand decision, the employer discovers an error, promptly revokes it, follows proper procedures, and imposes demotion instead—would the subsequent disciplinary decision be lawful? From a general perspective, once a decision is revoked, it loses legal effect and has no bearing on the new decision. However, in the context of labor relations, applying this principle in such a manner may not adequately protect the employee’s rights and could lead to arbitrary actions by the employer.
Conversely, prohibiting employers from issuing a new decision to replace an erroneous one may also fail to safeguard their rights in certain situations. For example, suppose an employer issues a well-founded dismissal decision but errs in procedure (e.g., the employer issues the dismissal decision only to later discover that the employee is pregnant—an oversight due to the employer’s failure to verify beforehand). In such a case, the employer revokes the dismissal decision, reinstates the employee’s position, and restores their rights during the period of wrongful dismissal. After the employee gives birth and the child reaches 12 months of age, the employer reconvenes a disciplinary hearing and imposes dismissal. This would be entirely reasonable.
Thus, to balance the rights of both parties in labor relations, labor law should clearly stipulate the procedures and conditions for revoking a disciplinary decision and reimposing discipline. Given the unique nature of labor relations, the author proposes that while revoking a disciplinary decision should not require specific conditions, reimposing discipline must meet the following criteria: (i) the statute of limitations for imposing discipline has not expired, and (ii) the new disciplinary measure must not be more severe than the previous one. This approach allows employers to revoke a disciplinary decision and reimpose discipline solely to correct procedural errors, without placing the employee in a worse position than under the prior decision.
- The Principle of “Multiple Forms of Labor Discipline Must Not Be Applied for a Single Violation of Labor Discipline”
The principle that “multiple forms of labor discipline must not be applied for a single violation of labor discipline” is stipulated in Clause 2, Article 123 of the 2012 Labor Code and has been retained unchanged in Clause 2, Article 122 of the 2019 Labor Code.
In the case at hand, Ms. Ngọc’s disciplinary violations, as documented on August 22, 2014, were subjected to disciplinary proceedings twice:
– First Instance: On September 10, 2014, PĐ Bank held a disciplinary meeting, determined that Ms. Ngọc had violated Clause 2, Article 49 of the Internal Labor Regulations, and issued Decision No. 360/2014/QĐ-OCB imposing a written reprimand as the disciplinary measure. Nearly five months later, on February 4, 2015, PĐ Bank issued Decision No. 238/2015/QĐ-NS&ĐT, revoking Decision No. 360/2014/QĐ-OCB, citing procedural violations and an incorrect application of the disciplinary form.
– Second Instance: Following the revocation of the reprimand decision, on April 27, 2015, PĐ Bank reconvened a disciplinary meeting to address the violations recorded on August 22, 2014. The bank determined that Ms. Ngọc had violated Clauses 10 and 17, Article 48 of the Internal Labor Regulations and issued Decision No. 90a/2015/QĐ-OCB, imposing demotion as the disciplinary measure.
The Trial Panel concluded that since PĐ Bank had issued Decision No. 238/2015/QĐ-NS&ĐT to revoke Decision No. 360/2014/QĐ-OCB, it was as if no disciplinary action had been taken. Furthermore, as the statute of limitations for imposing discipline had not expired, the second disciplinary proceeding against Ms. Ngọc was deemed lawful. This conclusion by the Trial Panel is unpersuasive. Although Decision No. 360/2014/QĐ-OCB was issued with procedural flaws, Ms. Ngọc did not contest it and had fully complied with it.
Under legal provisions, an employee subjected to a reprimand is automatically cleared of the disciplinary record after three months [this is consistently regulated in Clause 1, Article 127 of the 2012 Labor Code and Clause 1, Article 126 of the 2019 Labor Code]. Thus, after PĐ Bank issued Decision No. 360/2014/QĐ-OCB imposing a reprimand on Ms. Ngọc, she had effectively completed the disciplinary measure and was cleared of it after three months. Consequently, the bank’s decision to revoke this disciplinary measure five months later lacks legal basis.
The bank’s subsequent reconvening of a disciplinary meeting and imposition of demotion on Ms. Ngọc clearly violates the principle that “multiple forms of labor discipline must not be applied for a single violation of labor discipline.” For Ms. Ngọc’s violations, the bank effectively imposed two disciplinary measures—reprimand and demotion—simultaneously. As such, Decision No. 90a/2015/QĐ-OCB imposing demotion on Ms. Ngọc is contrary to the law.
III. Conclusion
Labor law imposes relatively stringent regulations on the principles governing the application of labor discipline measures against employees, as well as the procedures for handling such matters. This is appropriate to protect the weaker party in labor relations—the employee—while also curbing potential abuses of power by employers. However, labor law currently lacks specific provisions regarding the conditions and procedures for revoking or amending unilateral decisions by employers in the context of labor discipline. To ensure the rights of both parties in labor relations, labor law should explicitly regulate this matter.
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