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

May 26, 2016

Vietnam’s New Penal Code: Employers Face Increased Criminal Liability for Unlawful Dismissals

Subscribe to Updates
Tilleke & Gibbins

Under Vietnam’s new Penal Code No. 100/2015/QH13 (“new code”) coming into force on July 1, 2016, the dismissal of an employee will become more challenging because managers of companies will be exposed to greater risks of criminal liability than under the existing Penal Code No. 15/1999/QH10 as amended by Law No. 37/2009/QH12 (“old code”). This criminal liability would be imposed in addition to any civil liability that might be imposed under Vietnamese labor laws.

Specifically, under Article 128 of the old code, a person can incur criminal liability for unlawfully forcing laborers to leave their employment which causes “serious consequences,” whereas under Article 162 of the new code, the elements of the offense have been reworded to: “(a) unlawful dismissal of an employee, or (b) the use of force or threats to cause an employee to resign if such acts result in hardship for that employee or his/her family, or causes a strike.” In addition, under both laws, the acts must be carried out for “self-seeking purposes or private benefit,” though there has been no elaboration as to how this element might be met.

No detailed guidance was ever issued on the meaning of “unlawfully force laborers to leave their employment” or “serious consequences” under Article 128 the old code. Both terms were probably detrimental to the application of the law because the language, at face value, is vague. To our best knowledge, no one has ever been prosecuted under Article 128. Unlawful dismissals (wrongful termination) in an employment setting have only ended with civil liability.

By comparison, the language of Article 162 of the new code appears to be more precise and utilitarian. For example, if “unlawful dismissal” element can be fulfilled by non-compliance with existing labor laws, as is likely to be the case, there is a large body of existing law that sets out the legal grounds for dismissal and the procedures that must be followed. Hence, there is enough legal guidance to be able to determine if an unlawful dismissal has taken place. As a practical matter under the new code, an investigation into criminal liability might be triggered by the determination of civil liability under an unlawful dismissal case.

In addition to potentially greater exposure to criminal liability, there are enhanced penalties if liability is found. The criminal liability under the old code includes warning, non-custodial reform for up to one year, or imprisonment for a period of three months to one year. Under the new code, the warning is no longer an option and is replaced by a monetary fine from VND 10 million to VND 100 million (approximately USD 450 to USD 4,500). The other potential penalties (non-custodial reform for up to one year or imprisonment for a period of three months to one year) remain unchanged.

Moreover, there are enhanced penalties for aggravating circumstances under the new code that did not exist under the old code. Under the new code, where two or more employees are unlawfully dismissed or forced to resign; or the employee is a female employee who the offender knows is pregnant, or who is raising a child under 12 months of age; or the unlawful dismissal or forced resignation results in the suicide of the dismissed or resigned employee, the offender will be subject to a monetary fine of VND 100 million to VND 200 million (approximately USD 4,500 to USD 9,000) or imprisonment for a period of one to three years. In addition, the offender may also be banned from holding certain positions for a period from one to five years.

Under Vietnamese labor laws, normally only the legal representative of an organization has the authority to dismiss its employees. Hence, legal representatives will be especially vulnerable to liability under this new law.

Related Professionals

Practices

Employment

Location

RELATED INSIGHTS​ 

October 28, 2022
Tilleke & Gibbins employment specialists in Myanmar have contributed an updated Myanmar chapter to Employment and Employee Benefits Global Guide, a Thomson Reuters Practical Law online publication that provides an overview of employment and employee benefits in jurisdictions worldwide. The Myanmar chapter was written by members of Tilleke & Gibbins’ Yangon office, including Yuwadee Thean-ngarm, director; Nwe Oo, senior associate; Sher Hann Chua, consultant; and Kyaw Min Tun, consultant. The chapter covers a wide range of key employment topics, including employment status, background checks, regulation of the employment relationship, minimum wage, working hours and holidays, illness and injury of employees, discrimination and harassment, termination of employment, resolution of employer-employee disputes, redundancy/layoffs, employee representation and consultation, business transfer and insolvency, employee relocation, health and safety obligations, taxation of employment income, intellectual property issues, and more. Practical Law, produced by Thomson Reuters, is the world’s leading legal resource for business lawyers, publishing a huge range of guides for hundreds of jurisdictions and practice areas. The Employment and Employee Benefits Global Guide covers 46 jurisdiction around the world, with Tilleke & Gibbins also providing the Vietnam chapter of the guide. To view the latest version of the Myanmar chapter, please visit the Practical Law website.
Read More
October 10, 2022
Thailand’s recent removal of cannabis from the list of narcotics represents a significant development for the country, and it has some human resources teams wondering whether they should prepare certain measures in order to prevent detrimental incidents from happening in their organizations. For example, some employees could still be under the influence of cannabis because they used it before coming to work. In the past, this was rarely a consideration as cannabis was clearly banned. Using cannabis or possessing cannabis inside the employer’s premises subjected employees to criminal liability including imprisonment and fines. However, now that the government has removed cannabis from the narcotics list under the Narcotics Act, such incidents are more likely to occur. This likelihood has led to concern among many employers about how they can prevent or handle these incidents. An employer does have the right to prohibit any employee from bringing cannabis inside its premises, as it is the property of the employer. The employer has the management right to do this, particularly as an employee’s use of cannabis may very well disturb other employees. But if the employer would like to set penalties for breaching the prohibition, the picture is more complicated. Employers’ Work Rules Under the Labour Protection Act (LPA), an employer who has at least 10 employees must have Thai-language work rules. These work rules must include the following items: Specification of working days, regular working hours, and rest periods; Holidays and rules for taking holidays; Rules concerning overtime work and work on holidays; Arrangements for payment of wages (i.e., schedule and location); Overtime pay, holiday pay, and holiday overtime pay; Leave and rules for taking leave; Discipline and disciplinary actions; Submission of grievances; and Termination of employment, severance pay and special severance pay. To issue or amend work rules (e.g.,
Read More
October 7, 2022
On October 3, 2022, Thailand’s Ministry of Labour issued an announcement canceling the prohibition on lockouts and strikes, which had been in place since the onset of the COVID-19 pandemic. While this cancellation does not apply to ongoing labor disputes already being considered under the interim arrangements, it will apply to all other labor disputes from October 5, 2022, when it was published in the Government Gazette. Lockouts and strikes are basic rights of employers and employees under the Labour Relations Act B.E. 2518 (1975). However, these rights can be suspended—as they have been since May 8, 2020, when the Ministry of Labour announced that all labor disputes that could not be resolved through negotiation must be presented to the Labour Relations Committee in lieu of organizing strikes or lockouts. The announcement referred to the necessity of such special administration during the COVID-19 situation in order to prevent possible negative impacts on both employers and employees. On September 30, 2022, Thailand ended its COVID-19 emergency decree and dissolved the country’s Centre for COVID-19 Situation Administration. In light of this, the Ministry of Labour decided to end the requirement that unresolved labor disputes be sent to the Labour Relations Committee. The ministry’s cancellation of the prohibition will once again allow employers and employees to organize lockouts and strikes under the Labour Relations Act, starting October 5, 2022. For more details on this development, or for assistance with employment-related questions or disputes in Thailand, please contact Tilleke & Gibbins at [email protected] or +66 2056 5555.
Read More
August 30, 2022
On August 26, 2022, Thailand’s National Wage Committee voted to raise the minimum wage to THB 328–354 per day (USD 9.01–9.72)—an increase of approximately 5% from the previous range of THB 313–336. The decision to boost minimum wages, which were last increased in January 2020, came after a 14-year-high headline inflation rate of 7.61% in July 2022. The new minimum wages have been submitted to the cabinet for final approval and are expected to take effect on October 1, 2022, following publication in the Government Gazette. The exact minimum wage depends on the province in which the workplace is located, as shown in the table below. These minimum rates are for one working day, which consists of eight hours for normal work, or seven hours for work that may be harmful to the health and safety of the employee. Legal Requirements After the new minimum wages are announced in the Government Gazette, employers may not pay employees wages below the prescribed rates. Violations are punishable by imprisonment for up to six months, a fine of up to THB 100,000, or both. Regarding the question of whether employers can reduce the working hours in order to pay less than minimum wages (e.g., a prorated amount), based on past practice, the National Wage Committee’s announcement is expected to provide that a “day” refers to an employee’s normal working day, regardless of whether it is shorter than the “normal working hours” set by the employer under the Labor Protection Act. For example, an employee in Bangkok who earns the current minimum wage of THB 331 per day for normal working hours of eight hours a day would still be entitled to the full new rate of THB 353 per day in October 2022, even if the employer reduces the working hours. For
Read More