1. What is labor discipline handling? Forms of labor disciplinary measures

Article 117 of the Labor Code 2019 defines: “Labor discipline means the regulations on compliance with working time, technology, and production and business management issued by the employer in the internal labor regulations and as prescribed by law.”

Accordingly, handling labor discipline refers to the employer’s application of disciplinary measures, in accordance with the law and the internal labor regulations, to employees who commit violations of labor discipline, in order to maintain order and discipline within the enterprise and enhance employees’ compliance awareness.

Pursuant to Article 124 of the Labor Code 2019, there are 04 forms of labor disciplinary measures, including:

• Reprimand;
• Deferral of wage increase for a period not exceeding 06 months;
• Demotion;
• Dismissal.

Among these, dismissal is the most severe form of labor disciplinary measure, resulting in the termination of the employment relationship. Therefore, the law provides strict regulations and only permits the application of dismissal where the employee falls into one of the following cases:

• The employee commits acts of theft, embezzlement, gambling, intentional infliction of injury, or use of drugs at the workplace;
• The employee discloses business secrets or technological secrets, infringes the employer’s intellectual property rights, causes serious damage or threatens to cause particularly serious damage to the employer’s property or interests, or commits sexual harassment at the workplace as prescribed in the internal labor regulations;
• The employee, having been subject to a disciplinary measure of deferral of wage increase or demotion, repeats the violation during the period in which the prior disciplinary record has not yet been expunged. A repeated violation means the employee repeats a violation for which disciplinary action has been taken and has not yet been expunged in accordance with Article 126 of the Labor Code 2019;
• The employee is absent from work without legitimate reasons for 05 cumulative days within a period of 30 days, or 20 cumulative days within a period of 365 days, calculated from the first day of absence. Legitimate reasons include natural disasters, fire, the employee or their relatives being ill with certification from a competent medical facility, and other cases as prescribed in the internal labor regulations.

2. Principles to be observed when handling labor discipline

When handling labor discipline, the employer must ensure that the disciplinary action does not:

• Infringe upon the health, honor, life, reputation, or dignity of the employee;
• Impose fines or salary deductions in lieu of disciplinary measures;
• Take disciplinary action against an employee for a violation that is not stipulated in the internal labor regulations, not agreed upon in the executed employment contract, or not provided for under labor laws.

In addition to the above prohibited acts, the employer must also comply with the following principles when handling labor discipline:

First, disciplinary action may only be taken when:

• The employer proves the fault of the employee;
• There is participation of the employee representative organization at the grassroots level of which the employee subject to disciplinary action is a member;
• The employee is present and has the right to defend themselves, or to have a lawyer or the employee representative organization provide defense; in the case of a person under 15 years of age, the participation of their legal representative is required;
• The handling of labor discipline is recorded in written minutes.

Second, multiple forms of disciplinary measures must not be applied to a single act of violation of labor discipline.

Third, where an employee commits multiple violations of labor discipline at the same time, only the highest disciplinary measure corresponding to the most serious violation shall be applied.

These principles are not merely procedural but are intended to ensure legality, fairness, and transparency throughout the disciplinary process. For example, requirements such as proving fault, ensuring the participation of the employee representative organization, and safeguarding the right to defense help prevent arbitrary or one-sided disciplinary actions by the employer. Accordingly, these principles serve as a “legal safeguard” to balance the interests of employers and employees, while minimizing the risk of disputes and ensuring sustainable human resource management within the enterprise.

3. Cases where labor disciplinary action must not be taken

In addition to complying with the fundamental principles, labor law also clearly provides for cases where labor disciplinary action must not be taken, in order to protect employees’ rights in special circumstances. Specifically, Article 122 of the Labor Code 2019 stipulates that an employer must not take disciplinary action against an employee during the following periods:

• Sick leave or convalescence; or leave approved by the employer;
• Being held in custody or under temporary detention;
• Awaiting the results of investigation, verification, and conclusion by a competent authority in respect of violations as prescribed in Clauses 1 and 2, Article 125 of the Labor Code 2019;
• Female employees who are pregnant; employees on maternity leave or raising a child under 12 months of age.

In addition, the employer must not take disciplinary action against an employee who commits a violation of labor discipline while suffering from a mental illness or another illness that deprives them of the ability to perceive or control their acts.

These provisions are intended to ensure humanitarian considerations and fairness in labor relations, where employees are in special circumstances and do not have sufficient physical or mental capacity to protect their own rights and interests. At the same time, the postponement or non-imposition of disciplinary measures in such cases helps ensure objectivity and accuracy in determining violations, thereby avoiding hasty or unfounded decisions by the employer.

4. Procedures for handling labor discipline in compliance with the law

Pursuant to Article 122 of the Labor Code 2019 and Article 70 of Decree 145/2020/ND-CP, the handling of labor discipline by an employer must be carried out in accordance with the following order and procedures:

Step 1: Identify and prove the employee’s violation

The employer must collect evidence to prove the employee’s fault in relation to the disciplinary violation.

• Where the violation is discovered at the time it occurs: The employer must prepare a record of the violation and notify the employee representative organization at the grassroots level of which the employee is a member, and the legal representative of the employee if the employee is under 15 years of age.
• Where the violation is discovered after it occurs: The employer must collect and verify evidence to clarify the employee’s fault before proceeding with the subsequent steps of the disciplinary process.

Note: The employer has the right to temporarily suspend the employee from work where the violation involves complicated circumstances and the employee’s continued presence at work may hinder the verification process. The period of temporary suspension must not exceed 15 days, and in special cases, must not exceed 90 days.

The temporary suspension of an employee may only be implemented after consultation with the employee representative organization at the grassroots level of which the employee subject to suspension is a member.

Step 2: Issue notice of the disciplinary hearing

The employer must conduct the disciplinary hearing within the statutory time limit of 06 months from the date of the violation. In cases where the violation is directly related to finance, assets, or the disclosure of technological secrets or business secrets of the employer, the statute of limitations is 12 months.

At least 05 working days prior to the date of the disciplinary hearing, the employer must notify the participants of the meeting, including the employee representative organization at the grassroots level, the employee subject to disciplinary action, and the employee’s representative (if any).

The notice must include: the time and venue of the meeting, the full name of the employee subject to disciplinary action, and the act of violation.

Step 3: Confirmation of attendance by relevant parties

The notified parties must confirm their attendance at the meeting. Where a party is unable to attend due to issues relating to time or venue, the parties may agree to reschedule. If no agreement can be reached, the employer shall decide the time and venue of the meeting.

Step 4: Conduct the disciplinary hearing

The employer shall conduct the disciplinary hearing at the notified time and venue.

The meeting shall still be conducted in cases where any of the parties fails to confirm attendance or is absent.

Step 5: Prepare minutes of the disciplinary meeting

The contents of the meeting must be recorded in written minutes, which must be approved prior to the conclusion of the meeting and signed by the participants.

Where any participant refuses to sign the minutes, the person recording the minutes must clearly state the full name of such person and the reason for refusal to sign (if any) in the minutes.

Step 6: Issue the disciplinary decision

The person competent to impose disciplinary measures on behalf of the employer must issue the disciplinary decision within the prescribed time limit and send such decision to all participants of the meeting (including those absent from the meeting).

5. Penalties for unlawful handling of labor discipline

If an employer fails to comply with the principles, order, and procedures for handling labor discipline as mentioned above, then pursuant to Article 19 of Decree 12/2022/ND-CP, the employer may be subject to the following penalties:

A fine ranging from VND 5,000,000 to VND 10,000,000 for one of the following acts:

• Handling labor discipline or compensation for damages not in accordance with the prescribed order, procedures, or statute of limitations under the law;
• Temporarily suspending an employee from work beyond the statutory time limit;
• Failing to consult the employee representative organization at the grassroots level of which the employee subject to temporary suspension is a member prior to imposing such suspension.

A fine ranging from VND 20,000,000 to VND 40,000,000 for one of the following acts:

• Infringing upon the health, honor, life, reputation, or dignity of the employee in the course of handling labor discipline, where such act does not reach the level of criminal liability;
• Imposing fines or salary deductions in lieu of disciplinary measures;
• Taking disciplinary action against an employee for a violation not stipulated in the internal labor regulations, not agreed upon in the executed employment contract, or not provided for under labor laws;
• Applying multiple disciplinary measures to a single act of violation of labor discipline;
• Taking disciplinary action against an employee during the following periods: sick leave; convalescence leave; leave approved by the employer; being held in custody; being under temporary detention; or awaiting the results of investigation, verification, and conclusion by a competent authority in respect of violations as prescribed in Clauses 1 and 2, Article 125 of the Labor Code 2019.

In addition to monetary fines, the employer may also be subject to remedial measures as follows:

• Reinstatement and back pay: The employer must reinstate the employee and pay full salary in accordance with the employment contract for the period during which the employee was not allowed to work, in cases where dismissal is imposed: (i) not in compliance with the prescribed order, procedures, or statute of limitations; or (ii) for violations not stipulated in the internal labor regulations, not agreed upon in the executed employment contract, or not provided for under labor laws;
• Payment of salary during suspension: The employer must pay full salary for the period of temporary suspension where: (i) the suspension exceeds the statutory time limit; or (ii) the employer fails to consult the employee representative organization at the grassroots level of which the employee subject to suspension is a member prior to imposing such suspension;
• Public apology and compensation: The employer must issue a public apology to the employee and pay all medical expenses and salary during the treatment period where the disciplinary action infringes upon the employee’s health, honor, life, reputation, or dignity and causes bodily injury requiring medical treatment;
• Refund or payment of deducted amounts: The employer must return any amounts collected or pay full salary to the employee in cases where fines or salary deductions are imposed in lieu of disciplinary measures.

6. Frequently asked questions regarding labor disciplinary actions

6.1. Is an employee entitled to salary during the period of temporary suspension for verification of a disciplinary violation?

The answer is yes.

Pursuant to Article 128 of the Labor Code 2019, during the period of temporary suspension, the employee is entitled to an advance payment of 50% of the salary received prior to the suspension. Upon expiry of the suspension period, the employer is responsible for reinstating the employee to work in accordance with regulations.

In the event that the employee is subject to disciplinary action, the employee is not required to refund the advanced salary. Conversely, if the employee is not subject to disciplinary action, the employer must pay the full salary for the entire period during which the employee was suspended from work.

6.2. Is dismissal permissible where an employee fails to meet KPI targets?

The answer is no.

Failure to meet KPI targets does not constitute a legal ground for dismissal as a disciplinary measure. Therefore, the employer is not entitled to apply dismissal in such circumstances.

Where the employer intends to consider this as a basis for unilateral termination of the employment contract, please refer to the following article for further details:
https://phong-partners.com/co-duoc-cham-dut-hop-dong-lao-dong-khi-nguoi-lao-dong-khong-hoan-thanh-kpi

6.3. Can an employee’s disciplinary record be expunged after disciplinary action has been imposed?

The answer is yes.

In accordance with Article 126 of the Labor Code 2019, an employee who has been subject to disciplinary action may have their disciplinary record expunged upon satisfying certain conditions.

Specifically, a reprimand shall be automatically expunged after 03 months; a deferral of wage increase shall be expunged after 06 months; and a demotion shall be expunged after 03 years, from the date of imposition, provided that no further violations are committed. In addition, in the case of deferral of wage increase, if the employee has served half of the disciplinary period and demonstrates improvement, the employer may consider reducing the duration of the disciplinary measure.