Employee Dismissal Procedures in Vietnam: Legal Guidance for Employers

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Employee dismissal procedures in Vietnam is a critical topic, as most businesses currently face numerous difficulties and disputes related to terminating employees. The primary cause of these conflicts stems from a failure to correctly implement dismissal procedures in accordance with the law. To minimize risks in human resource management, understanding and executing the correct legal processes is a mandatory requirement for every enterprise. In the article below, Viet An Law will provide comprehensive legal consultation on employee dismissal procedures for businesses under the latest current regulations.

What is employee dismissal for employers in Vietnam?

According to Article 124 of the Labor Code 2019, dismissal is the most severe form of labor discipline applied by the employer to an employee who commits a serious disciplinary violation. Unlike unilateral termination of the labor contract, dismissal is punitive in nature, resulting in the employee losing their job immediately and having certain rights restricted.

Cases in which businesses are allowed to dismiss employees

Accurately identifying the violation is the first step in legal consulting on employee dismissal in Vietnam to ensure legality.

According to Article 125 of the Labor Code, businesses are only entitled to apply the disciplinary measure of dismissal in the following specific cases:

• Violations of the law: Theft, embezzlement, gambling, intentional infliction of injury, or drug use in the workplace.
• Violations of the core interests of the business: Disclosing business secrets, technological secrets, infringing on the intellectual property rights of the employer, or acts causing serious damage (or threatening to cause exceptionally serious damage) to the assets and interests of the business.
• Repeated disciplinary violations: An employee who has been subjected to disciplinary action involving an extended delay in salary increase or demotion and commits a repeat offense before the disciplinary record is expunged.
• Voluntary absence from work: Voluntarily absenting oneself from work for a cumulative total of 5 days within a 30-day period, or a cumulative total of 20 days within a 365-day period starting from the first day of absence, without a valid reason.

Conditions for lawful employee dismissal in Vietnam

To ensure that the dismissal procedure is carried out in accordance with the law, businesses must adhere to the core principles of handling labor discipline in general and dismissal in particular, as stipulated in Article 122 of the Labor Code 2019. Specifically:

• The employer must prove the employee’s fault.
• The employee representative organization at the workplace where the employee being disciplined is a member must be present.
• The employee must be present and have the right to defend themselves, or to have a lawyer or representative organization defend them.
• The disciplinary action must be recorded in a written report.
• Multiple forms of labor discipline cannot be applied to a single violation.

Employee dismissal procedures in Vietnam

According to the guidelines in Article 70 of Decree 145/2020/ND-CP, the procedure for dismissing an employee is carried out as follows:

Step 1: Detecting violations and recording the violation

When a violation is detected, the business must record the violation at the time it occurs. If detected after the incident has occurred, sufficient evidence must be collected before proceeding with the next steps.

Step 2: Notifying the disciplinary meeting

The business must send a written notice of the meeting to the required participants at least 5 working days before the meeting date. Participants include:

• Employees;
• Representatives of the trade union.

Step 3: Conducting the labor disciplinary meeting

The meeting must be conducted with all notified participants present. The meeting proceedings must be recorded in minutes, signed by all attendees. If someone does not sign, the reason must be clearly stated.

Step 4: Issuing the dismissal decision

Within the statute of limitations for disciplinary action, the person authorized to conclude the labor contract on the enterprise’s side issues the dismissal decision and sends it to the employee and the employee representative organization.

What documents are required for processing an employee’s dismissal?

To complete the dismissal procedure, the company’s internal file must include the following documents:

• Minutes of labor discipline violations or documents and evidence proving the offense.
• Employee’s statement (if any).
• Summons/Notifications to attend the disciplinary meeting.
• Minutes of the labor discipline meeting.
• Dismissal decision signed by the authorized person.

Common mistakes businesses make when dismissing employees

In reality, many businesses get involved in lawsuits due to a lack of understanding of the law. Common mistakes include:

• Dismissing employees without justification or misapplying regulations in the labor rules.
• Skipping the notification step or holding meetings without employee representatives.
• Disciplining employees and issuing disciplinary decisions after the statute of limitations has expired according to Article 123 of the 2019 Labor Code. Specifically:
  • Usually 6 months from the date of the violation;
  • For violations related to finance and property, it is 12 months from the date of the violation.
• Lack of timely labor law consulting, leading to the use of internal administrative decisions instead of disciplinary decisions.

What are the legal consequences for unlawful dismissal?

According to Article 41 of the Labor Code 2019, if a company unlawfully dismisses an employee, it is considered an unlawful unilateral termination of the labor contract. In that case, the company shall be held liable as follows:

If the employee agrees to return to work:

• The employer must pay wages, social insurance, health insurance, and unemployment insurance for the days the employee was unable to work.
• The employer must compensate the employee with an amount equal to at least two months’ salary as stipulated in the labor contract.
• If the position or job as specified in the labor contract is no longer available, the parties shall amend the contract by mutual agreement.
• The employee shall return any severance pay or unemployment benefits received from the employer (if any).

If the employee does not agree to return to work:

• The employer shall pay the amounts as mentioned above.
• Severance pay shall be paid to the employee according to Article 46 of the Labor Code; for each year of service, the employee is entitled to half a month’s salary.

If the employer does not wish to re-employ the employee and the employee agrees:

• The employer shall pay the amounts as in case 1;
• Pay severance pay to employees in accordance with Article 46 of the Labor Code; for each year of service, they are entitled to half a month’s salary.
• Compensate employees with at least two months’ salary.

Can a company dismiss a pregnant employee?

According to Clause 4, Article 122 of the Labor Code 2019, employers are prohibited from disciplining employees, including dismissing them, while they are pregnant, on maternity leave, or raising a child under 12 months old.

Therefore, if an employee is subject to disciplinary dismissal, the company must wait until this protection period ends before proceeding with the disciplinary action. At that time, according to Clause 2, Article 123 of the 2019 Labor Code, the company will have 60 days to carry out the dismissal procedure, starting from the end of the aforementioned period.

Viet An Law Firm provides consulting services on employee dismissal procedures for businesses.

Legal consulting on employee dismissal in Vietnam of Viet An Law

Applying the highest level of disciplinary action always carries the risk of disputes. With a team of experienced labor law consultants, we provide in-depth services to support organizations in complying fully with regulations.

Our support services include:

• Reviewing and drafting of labor regulations and comparing them with employee violations.
• Drafting of employment contracts, documents, minutes, and notices in the disciplinary process.
• Representing or accompanying the business in labor disciplinary meetings.
• Assessing risks and proposing the most optimal negotiation plan for contract termination.

By strictly adhering to dismissal procedures, Viet An Law Firm’s support will help businesses fully protect their legal rights and minimize prolonged disputes and lawsuits that could impact business operations.

Frequently asked questions about employee dismissal in Vietnam

Is prior notice required for dismissal?

Current law does not require businesses to give a specific notice period when making a dismissal decision, unlike unilateral contract termination.

However, according to Clause 2, Article 70 of Decree 145/2020/ND-CP, businesses are required to give at least 5 working days’ notice regarding the organization of a disciplinary meeting.

Are dismissed employees entitled to severance pay?

According to Article 46 of the Labor Code 2019, employees who are legally dismissed through disciplinary action are not entitled to severance pay. However, they are still entitled to pay wages for the days worked, unused annual leave, and their Social Insurance book will be finalized and returned to them by the business.

To ensure maximum legal safety, businesses should seek for labor law consulting before issuing a final decision, helping the disciplinary process proceed in accordance with the law and fully protecting the organization’s interests. When navigating the complexities of employee dismissal procedures in Vietnam: legal guidance for employers, please contact Viet An Law for timely assistance if you encounter any difficulties.