Vietnam: Enhanced Criminal Liability for Unlawful Dismissals Has Been Delayed

December 2, 2016

Vietnam: Enhanced Criminal Liability for Unlawful Dismissals Has Been Delayed

Taylor Vinters – International Employment Law Update

On June 29, 2016, the National Assembly of Vietnam passed a resolution to delay the implementation of Vietnam’s new Penal Code (“New Code”) allegedly due to the discovery of numerous errors contained within the New Code.

As a result of the resolution, enhanced criminal liability for unlawful dismissals under the New Code will not apply until an amended version of the New Code takes effect. Until then, the provisions of the current Penal Code (“Current Code”), containing less severe penalties, will continue to apply.

In Vietnam, criminal liability for unlawful dismissal can be imposed in addition to any civil liability the employer might face under local labor laws. Under the Current Code, a person can incur criminal liability for “unlawfully forcing an employee to leave his or her job, causing serious consequences,” whereas under the New Code, the elements of the offense have been reworded to include “the unlawful dismissal of an employee” or “the use of force or threats to cause an employee to resign,” if such an act “results in hardship for that employee or his/her family, or leads to a strike.”

No detailed guidance has been issued on the meaning of “serious consequences,” or what constitutes “unlawfully forcing,” under the Current Code. The language of the New Code, in comparison, appears to be somewhat clearer. For example, it is likely that the “unlawful dismissal” element can be fulfilled by noncompliance with existing labor laws which set out clear legal grounds for dismissal and the procedures that must be followed. Thus, although the meaning “hardship” remains vague, there appears to be enough legal guidance to be able to determine if an unlawful dismissal has taken place.

Penalties under the New Code include a monetary fine ranging from VND 10 million (approximately EUR 400) to VND 100 million (approximately EUR 4,000), a non-custodial sentence of up to one year, or a period of imprisonment of between three months and one year.

The penalties for aggravating circumstances, as defined in the New Code, include a monetary fine ranging from VND 100 million (approximately EUR 4,000) to VND 200 million (approximately EUR 8,000), a period of imprisonment of between one and three years, and a prohibition on individual offenders from holding certain positions for one to five years.

Comment

Employers should be aware that implementation of the New Code has been delayed and that the provisions of the Current Code continue to apply. Employers should also note (in addition to the provisions set out herein), that when the New Code comes into force, both legal representatives and general directors may incur enhanced penalties if they are liable for unlawful dismissal under the New Code.

Related Professionals

Annika Svanberg

Registered Foreign Attorney

Vietnam

+84 28 628 45678

Email

Kien Trung Trinh

Partner

Vietnam

+84 24 3772 5567

Email

RELATED INSIGHTS

April 12, 2024

Thailand Sets New Minimum Wage for Certain Hotels

On April 10, 2024, new minimum wage rates for workers in certain hotels in Thailand were published in the Government Gazette, taking effect on April 13, 2024. Under the Notification of the National Wage Committee on Minimum Wage Rate for the Hotel Industry, the new minimum wage rate is THB 400 per day, applicable to employees working in four-star (and above) hotels that have at least 50 employees and are located in the following specific areas: Bangkok: Pathumwan and Wattana districts Krabi: Ao Nang Subdistrict Administrative Organization areas Chon Buri: Pattaya city Chiang Mai: Chiang Mai municipality Prachuap Khiri Khan: Hua Hin municipality Phang-nga: Khukkhak sub-district municipality Phuket: Whole province Rayong: Phe subdistrict Songkhla: Hat Yai municipality Surat Thani: Koh Samui municipality Rationale The increase in the minimum wage is to drive and stimulate the economy in Thailand’s tourism industry, which is critical to the overall economy of the country. The ten areas identified above are those that earn a significant portion of their revenue from tourism. The decision underwent a public hearing process involving stakeholders. Although there were objections from some hotels claiming they were not yet ready to bear the increased costs, the law was enacted, taking effect on April 13, 2024. For more information on Thailand’s minimum wage regulations, or on any aspect of employment law in Thailand, please contact Pimvimol (June) Vipamaneerut at [email protected], Ketnut Pukahuta at [email protected], Dusita Khanijou at [email protected], or Chomanut Arif at [email protected].

March 27, 2024

Cambodia Clarifies Compensation Due for Employment Contract Termination

Cambodia’s Ministry of Labor and Vocational Training issued the Notification on the Compensation for Terminating an Employment Contract on March 21, 2024, clarifying the compensation due to employees upon the termination of their employment contracts. The notification outlines different requirements depending on the nature of the termination and the type of employment contract, as laid out below. Termination without Valid Reason and in Absence of Serious Misconduct If an employment contract has been terminated by an employer without a valid reason and the employee did not commit any serious misconduct as defined under the relevant article of the Labor Law, the employer must compensate the employee as follows: Fixed-Duration Contract: Wages that have not yet been paid; Unused and unpaid annual leave through the termination date; Severance payment equal to at least 5% of the wages paid to the employee during the length of the contract; and Damages for being laid off before the expiration date of the fixed-duration contract, at least equal to the wages the employee would have received had he or she completed the original contracted term of employment. Unspecified-Duration Contract: Wages that have not yet been paid; Unused and unpaid annual leave through the termination date; Compensation in lieu of notice if the employer did not give prior notice in accordance with the Labor Law; Seniority indemnity for the semester that the employee is terminated and total seniority back payments that have not been paid; and Damages for being laid off, in an amount equal to the seniority payment received during the employment contract. Termination in Cases of Serious Misconduct Employees who commit any serious misconduct as defined under the Labor Law (regardless of whether they are under a fixed-duration or unspecified-duration contract) are entitled only to the following compensation: Wages that have not yet

March 18, 2024

Practical Law: Employment and Employee Benefits in Vietnam 2024

Lawyers from Tilleke & Gibbins’ labor and employment team have contributed a new Vietnam chapter to Thomson Reuters Practical Law’s Employment and Employee Benefits Global Guide. The guide provides a high-level comparative overview of employment laws and regulations across various jurisdictions around the world. Tilleke & Gibbins also contributed the Myanmar chapter of the guide. The Vietnam chapter covers a wide range of typical employment matters, such as limitations on working hours, paid leave requirements, minimum wage, and health and safety obligations. In addition, the guide provides insight on a number of topics of special interest to foreign investors doing business in Vietnam, including the following: Mandatory contents of a labor contract; Visas and permits required for expatriate employees; Employers’ obligations for protecting employees’ privacy and personal data; Procedural requirements for the dismissal of an employee; Employer and parent company liability. To read the Vietnam chapter, please visit the Practical Law website (subscription required) or click on the button below for a PDF.

February 28, 2024

Myanmar Takes Steps to Enable Online Applications for Foreign Experts and Employees

The Myanmar Investment Commission (MIC) has announced the opening of the trial period for MIC-permitted or MIC-endorsed companies to reenter investment data for using the Myanmar Investment Online (MyInO) system. The trial period is open until June 30, 2024. The MyInO system allows for the submission and recordal of applications for investment under the Myanmar Investment Law. With the implementation of phase 2 from September 1, 2023, applications for the appointment or resignation of foreign experts and employees within MIC-permitted or MIC-endorsed companies can now be submitted manually or through the Investment Monitoring System available on MyInO. To initiate the application process in MyInO, applicants are required to create an account on the platform. Subsequently, companies holding an MIC permit or endorsement must reenter all investment-related data since the obtaining of the relevant permits/endorsements, in compliance with the announcement. Following this data update, applications can be filed through MyInO. After this trial period, the submission of applications for appointments will be available online. The benefit of using MyInO to submit a foreign expert or employee appointment or resignation application is that the application can be submitted within 30 days of the foreign expert’s arrival in Myanmar. In contrast, hard copy applications must be submitted within seven working days of arrival. According to the Myanmar Investment Law, a foreign expert is one who qualifies as a senior manager, technical or operational expert, or advisor in permitted or endorsed companies within Myanmar. For assistance with completing the investment data reentry process or filing applications for appointment or resignation of foreign experts or employees, or for further details on any aspect of the Investment Monitoring System under MyInO, please contact Tilleke & Gibbins at [email protected].

You are using an outdated browser and your browsing experience will not be optimal. Please update to the latest version of Microsoft Edge, Google Chrome or Mozilla Firefox. Install Microsoft Edge

Industries

Practices

December 2, 2016