Guide to Labor Disciplinary Procedures in Vietnam

Labor discipline is the regulations on compliance with time, technology and production, and business management issued by the employer in the labor regulations and prescribed by law. In some cases, employees violate the regulations of the enterprise, leading to the need to apply labor disciplinary measures. How is the procedure for handling labor disciplinary carried out? In the article below, Viet An Law will advise and answer the client’s questions.

Current forms of labor discipline

According to Article 124 of the Labor Code 2019, forms of labor discipline include:

• Reprimand;
• Extension of the salary increase period by no more than 06 months
• Demotion;
• Dismissal.

Which dismissal is the highest form of labor discipline, aimed at removing from the workforce those employees who lack a sense of discipline and seriously violate enterprise order? This is also the basis for the termination of the labor contract.

The disciplinary measure of dismissal is applied by the employer in the following cases, as prescribed in Article 125 of the Labor Code 2019:

• The employee commits acts of theft, embezzlement, gambling, intentionally inflicting injury, or using drugs in the workplace;
• The employee discloses business secrets, technological secrets, infringes upon the intellectual property rights of the employer, commits acts causing serious damage or threatening to cause particularly serious damage to the assets or interests of the employer, or engages in sexual harassment at the workplace as stipulated in the internal labor regulations;
• The employee is subject to disciplinary action in the form of a salary increase extension or demotion and repeats the violation during the period in which the disciplinary measure has not yet been expunged;
• The employee arbitrarily leaves work for a total of 05 days within 30 days or a total of 20 days within 365 days from the first day of absence without a legitimate reason.

Components involved in handling labor disciplinary

Handling labor disciplinary must have the participation of the components required to attend the meeting specified in Point b, Point c, Clause 1, Article 122 of the Labor Code:

• The organization representing employees at the facility where the employee being disciplinary is a member;
• The employee must be present. In case the employee is under 15 years old, the participation of a legal representative is required
• A lawyer or organization representing employees to defend (if any)

Guide to labor disciplinary procedures in Vietnam

The procedures for handling labor disciplinary are prescribed in Clause 6, Article 122 of the Labor Code and Article 70 of Decree 145/2020/ND-CP, specifically including the following steps:

Step 1: Preparation of the record of violation

• Upon discovering that the employee violates labor discipline at the time the violation occurs, the employer will prepare a record of the violation and notify the grassroots-level employee representative organization of which the employee is a member, and the legal representative of the employee who is under 15 years old.
• If the employer discovers the violation after the time the act was committed, the employer will collect evidence to prove the fault of the employee.

Step 2: Notification of disciplinary meeting

At least 05 working days before the date of the labor disciplinary meeting, the employer will notify all parties required to attend the meeting, ensuring that they receive the notification before the meeting takes place, including the following contents:

• The subject matter of the meeting
• The time and location of the labor disciplinary meeting
• Full name of the employee subject to disciplinary action
• The disciplinary violation to be addressed

Upon receiving the employer’s notification, the parties required to attend the hearing must confirm their attendance with the employer.

In case any party required to attend is unable to attend at the notified time and location, the employee and employer will agree on a change of time and location for the meeting.

If the parties cannot reach an agreement, the employer will decide the time and location of the meeting.

Step 3: Conducting the labor disciplinary meeting

• The employer will conduct the labor disciplinary hearing at the time and location previously notified.
• In case any of the required attendees do not confirm their attendance or are absent, the employer will still proceed with the labor disciplinary hearing.

Step 4: Preparation of the meeting minutes

• The contents of the labor disciplinary hearing must be recorded in writing, read and approved before the conclusion of the meeting, and signed by all attendees.
• In case any attendee does not sign the minutes, the recorder will state their full name and the reason for not signing (if any) in the contents of the minutes.

Step 5: Issuance of the decision and notification

Within the statute of limitations for disciplinary action, the competent person will issue the decision on labor disciplinary measures and send it to the required participants by the applicable regulations.

Some notes when implementing procedures for labor disciplinary actions in Vietnam

Regarding disciplinary authority

According to Point i, Clause 2, Article 118 of the Labor Code 2019 and Point i, Clause 2, Article 69 of Decree No. 145/2020/NĐ-CP, the person competent to handle labor disciplinary is: the person authorized to sign labor contracts on the employer’s side as prescribed in Clause 3, Article 18 of the Labor Code or a person specifically designated in the internal labor regulations.

Regarding the statute of limitations for disciplinary action

This refers to the period during which the employer is entitled to carry out the procedures and issue the decision on disciplinary dismissal against the employee who has committed a violation. According to Article 123 of the Labor Code 2019, the statute of limitations for labor disciplinary action is 06 months from the date the violation occurs; in case the violation is directly related to finance, assets, disclosure of technological secrets or business secrets of the employer, the statute of limitations will be 12 months.

Upon the expiration of the period during which the employee is exempt from disciplinary action, if the statute of limitations has expired or remains but is less than 60 days, the statute of limitations may be extended, but not exceeding 60 days from the end date of the above-mentioned exemption period.

Cases in which disciplinary action is not permitted

Labor disciplinary action will not be applied to employees during the following periods:

• Sick leave or convalescence; leave of absence with the employer’s consent;
• Being held in custody or detention;
• Awaiting the conclusion of a competent authority’s investigation and verification of violations as prescribed in Clauses 1 and 2, Article 125 of the Labor Code;
• Female employees who are pregnant, employees on maternity leave, or raising a child under 12 months of age.

In addition, where an employee simultaneously commits multiple violations of labor discipline, only the highest form of disciplinary action corresponding to the most serious violation will be applied.

What are the penalties for improper implementation of labor disciplinary procedures?

Primary form of sanction

According to Point đ, Clause 2, Article 19 of Decree No. 12/2022/NĐ-CP stipulating the level of sanctions against employers, it is provided as follows:

“2. A fine ranging from VND 5,000,000 to VND 10,000,000 will be imposed on the employer for committing any of the following acts:
đ) Handling labor disciplinary or compensating for damages in a manner that is inconsistent with the legal procedures, sequence, or statute of limitations;…”

Thus, if the company imposes disciplinary measures not by the prescribed sequence and procedures, it may be subject to a monetary fine ranging from VND 5,000,000 to VND 10,000,000 (this penalty applies to individuals. The fine imposed on organizations is twice the amount applicable to individuals).

Remedial measure

According to Point a, Clause 4, Article 19 of Decree No. 12/2022/NĐ-CP on remedial measures, it is stipulated as follows:

The employer is required to reinstate the employee and fully pay the salary under the labor contract for the days the employee was absent from work, in the event of applying the disciplinary measure of dismissal without complying with the legally prescribed procedures and sequence.

Above is the advice of Viet An Law on guide to labor disciplinary procedures in Vietnam. If clients have any related questions, please contact Viet An Law for the best advice and support!