Notes on how to calculate the number of days when employees are not allowed to work in disciplinary disputes

Notes on discipline for unlawful dismissal

Dismissal is one of the forms of labor discipline that occurs when an employment relationship between the employer and the employee is terminated. However, if the disciplinary form is improperly applied, the employer will have to compensate the employee for damages.

Within the scope of this article, BLawyers Vietnam will not present the order of dismissal discipline, but will only emphasize how to determine the number of days when employees are not allowed to work when a disciplinary decision to dismiss an employee is unlawful according to the practice of dispute arbitration in Vietnam.

1. Consequences of applying disciplinary forms of dismissal contrary to legal provisions

When the employer applies disciplinary action against an employee, there are 3 cases dealing with the consequences of dismissal, as follows:

(i) Case 1 – The employer and the employee both want to continue to perform the signed labor contract:

The employer will allow the employee to return to work under the signed labor contract. In addition, the employer must pay wages, and pay social insurance, health insurance and unemployment insurance during the days when the employee is not allowed to work, and must pay the employee an additional amount equal to at least 2 months’ salary according to the labor contract. However:

  • If there is no longer a position or job that was included in the labor contract but the employee still wants to work, the two parties must agree to amend and supplement the labor contract; or
  • If the legal provisions about the notice period as prescribed have been violated, the employer must pay an amount corresponding to the salary specified in the labor contract for the days that were lost because of the lack of a proper prior notice.

(ii) Case 2 – The employer does not want to continue to implement the labor contract:

If the employee does not want to continue working, in addition to the amount payable in Item 1 (i) above, the employer must pay severance allowance to the employee in accordance with the current Labor Code in order to terminate the labor contract.

(iii) Case 3 – If the employer does not want the employee to return to work, and the employee agrees to terminate the labor relationship:

Besides the amount payable by the employer as stipulated in Item 1 (ii) above, the two parties must agree on additional compensation for the employee at least equal to 2 months’ salary under the labor contract in order to terminate the labor contract.

Thus, the common point shown in these three cases is that the employer is responsible for paying wages, and paying social insurance, health insurance, and unemployment insurance during the days when the employee is not allowed to work for the employer because of the illegal decision. However, at present, the current Labor Code and guiding documents do not have uniform and clear regulations on how to calculate the number of days that employees are not allowed to work.

2. How to calculate the number of days when employees are not allowed to work according to the practice of adjudicating individual labor disputes in Vietnam

(i) For a definite-term labor contract

The court usually considers the period between the date the employer makes a decision on the termination of the labor contract with the employee (in the form of effective disciplinary dismissal) and the expiration date of the labor contract.

For example: If the employer and employee signed a definite labor contract for 36 months, and the employer dismisses the employee by a decision, after the parties have implemented 24 months, the number of days the employee will not be allowed to work can be counted as 12 months.

However, in the same example above, if the employee has found a new job by the 27th month according to the date in the signed labor contract (i.e., after 3 months from the date of termination), the number of days the employee is not allowed to work can be counted as 3 months. The court bases this on the date the employee has a new job and receives compulsory social insurance contributions.

(ii) For an indefinite-term labor contract

Unlike a labor contract that defines a predefined term for the date of termination of the contract, the number of days that the employee is not allowed to work in an indefinite-term contract will be determined as follows:

  • From the date the employer issues a decision on termination of the labor contract with the employee (in the form of disciplinary dismissal) effective to the date the employee has a new job and is entitled to social insurance contributions; or
  • From the date the employer issues a decision on the termination of the labor contract with the employee (in the form of disciplinary dismissal) effective up to the date of the first instance trial hearing, if the employee initiates an individual labor dispute about the illegal dismissal decision.

The number of days the employee is not allowed to work will include the statute of limitations for initiating a lawsuit on an individual labor dispute along with the time for a first-instance trial at a competent court. With the current long backlog of cases in the Courts, the employee’s time not being able to work will unintentionally add up to a similar amount.

Note that the calculation above applies only to valid contracts that were illegally terminated.

The above is not official advice from BLawyers Vietnam. If you have any questions or suggestions about the above, please contact us at consult@blawyersvn.com. We would love to hear from you.

Date: 05 December 2023

Writer: Minh Truong

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