This article provides an in-depth look at the legal framework and practical practices for employee dismissal in Vietnam. As an overseas company, understanding and complying with Vietnamese labor laws is crucial to safeguarding the company’s interests. We will analyze in detail the conditions, processes and precautions for legal dismissal, and provide practical risk management advice. Through case analysis and expert interpretation, this article aims to provide comprehensive dismissal management guidelines for companies operating in Vietnam and help companies develop steadily in a complex labor law environment.

Basic provisions of Vietnamese labor law on dismissal

Vietnam’s labor law has strict regulations on employee dismissal, which aims to protect the rights and interests of workers while also providing employers with ways to legally dismiss employees. According to the Labor Law (Law No. 45/2019/QH14) promulgated on November 20, 2019, employers must have sufficient legal basis for dismissal of employees. Article 36 of the law clearly stipulates the circumstances under which the employer may unilaterally terminate the labor contract, including when employees frequently fail to perform their job duties, are unable to work for a long time due to illness or accidents, and when the employer must reduce production and lay off employees due to force majeure.

It is important to note that employers must follow strict procedures when terminating employees. Article 41 of the Labor Law stipulates that employers must notify employees in advance. The notice period depends on the type of employment contract : 45 days for an open-term contract, 30 days for a fixed-term contract , and 3 working days for seasonal or specific work contracts of less than 12 months. This provision gives employees reasonable time to adjust their work and life arrangements.

In addition, the Labor Law also specifically protects certain groups of employees. For example, Article 140 stipulates that an employer may not fire a female employee who is pregnant, on maternity leave, or raising a child under 12 months of age, unless the business ceases operations. For trade union cadres, Article 177 also provides special protection, stipulating that the employer may not unilaterally terminate the labor contract with the trade union cadres without the consent of the superior trade union organization or the labor management agency of the provincial people’s committee.

In terms of dismissal procedures, Government Resolution No. 145/2020/ND-CP promulgated on November 10, 2020 provides more detailed guidance on the implementation of the Labor Law. Article 38 of the agreement stipulates that employers must conduct interviews with employees and keep records of the interviews. If both parties cannot reach an agreement, the employer must notify the labor management department. Only after completing these steps can the employer issue a dismissal decision.

Vietnam’s labor law is relatively strict in protecting workers’ rights and interests, but it also provides employers with ways to legally dismiss employees. Enterprises must fully understand these regulations and strictly abide by legal procedures when dismissing employees to avoid potential labor disputes and legal risks.

Specific grounds and conditions for lawful dismissal

Article 36 of Vietnam’s 2019 Labor Law details the circumstances under which the employer may unilaterally terminate the labor contract. An employee’s poor job performance is a major legitimate reason for dismissal. “Poor performance” here is not a subjective judgment , but based on objective criteria. The law requires employers to establish a clear job evaluation system, including detailed job descriptions, performance indicators and evaluation methods. If an employee continues to fail to meet these preset standards within a certain period, the employer can consider dismissal. It is worth noting that before formal dismissal, the employer should give the employee an opportunity to improve, including providing necessary training and guidance. Only if, after multiple attempts at evaluation and improvement, the employee still fails to meet the requirements, the employer can initiate dismissal procedures.

Long-term inability to work due to health problems is another legitimate reason for dismissal, but here “long-term” has a clear time limit. For non-fixed-term contracts or fixed-term contracts with a term of more than 3 years, employees can only be considered for dismissal if the continuous treatment period exceeds 12 months; for fixed-term contracts from 12 months to 36 months, this time limit is 6 months; and for employees with less than 12 months of continuous treatment, dismissal For a 12-month contract, it is half the contract period. However, even if an employee’s sick leave reaches these time limits, the employer cannot fire them immediately. The law requires employers to first try to adjust an employee’s job or duties to accommodate the employee’s medical condition. Dismissal may only be considered if suitable work cannot be arranged despite attempts at adjustment. At the same time, the employer needs to provide detailed medical certificates and records of work adjustment attempts to justify the dismissal.

Layoffs due to financial reasons are a more complex ground for dismissal. Legal dismissals can be carried out when a company must lay off employees due to economic crisis, technological changes or organizational restructuring. But this process requires the employer to provide sufficient evidence to prove the necessity of layoffs. This includes financial statements, market analysis reports, technical transformation plans and other documents. At the same time, employers must prove that they have taken all possible measures to avoid layoffs, such as cutting other expenses, suspending new recruitment, shortening working hours, etc. After deciding to lay off employees, the employer needs to formulate a detailed layoff plan, including the number of layoffs, affected departments, selection criteria, etc., and conduct full consultations with labor unions or employee representatives. The law also stipulates that within a certain period of time after layoffs, if companies recruit again, they must give priority to laid-off employees.

Serious misconduct by an employee may also result in summary dismissal without prior notice. Such conduct includes theft, corruption, vandalism of company property, disclosure of trade secrets, workplace violence, etc. However, employers must have conclusive evidence to prove employee misconduct, such as surveillance videos, witness statements, financial records, etc. At the same time, the handling process must strictly comply with the company’s disciplinary regulations and procedures, which usually require formal investigations and hearings. Employers should also consider the seriousness of the misconduct and ensure that the penalty of dismissal is commensurate with the seriousness of the conduct.

An employee’s absence without authorization may also be grounds for dismissal. Specifically, if an employee is absent from work for five consecutive working days without reason, the employer has the right to terminate the labor contract. But before that, employers are obliged to try multiple ways to contact employees, including phone calls, text messages, emails, home visits, etc., and record these attempts in detail. Employers should also give employees a reasonable opportunity to explain and consider possible special circumstances, such as emergency family matters or unexpected events.

It is worth emphasizing that dismissal in certain circumstances is strictly prohibited. For example, employees cannot be fired because they are pregnant, on maternity leave, or raising a baby under 12 months of age, unless the company ceases operations entirely. Likewise, employees may not be dismissed for taking sick leave, annual leave or participating in trade union activities. In addition, if employees complain to relevant departments or file lawsuits due to labor disputes, employers are not allowed to dismiss them on this basis. These regulations are intended to protect the legitimate rights and interests of employees and prevent employers from abusing their dismissal rights.

Vietnamese law stipulates the grounds and conditions for legal dismissal in very detailed and strict terms. When considering dismissing an employee, an employer must ensure there is a sufficient legal basis and strictly follow relevant procedures. It is recommended that employers fully communicate with legal counsel and carefully review all relevant evidence and documents before implementing any dismissal decision to ensure that every step complies with legal requirements. At the same time, employers should establish a sound human resources management system, including clear work standards, performance evaluation systems and disciplinary regulations. This will not only help prevent unnecessary dismissals, but also provide a solid foundation for legal dismissals when necessary.

Dismissal process and precautions

According to Vietnam’s 2019 Labor Law and relevant implementation rules, employers must strictly follow a series of steps and procedures to ensure the legality of dismissal. The following is the detailed dismissal process and precautions:

The first step in the dismissal process is adequate assessment and preparation. Before considering terminating an employee, an employer must conduct a thorough internal review. This includes a detailed review of an employee’s entire employment history, including entry documents, past performance reviews, training records, disciplinary records, etc. If the reason for dismissal is poor performance, the employer needs to ensure that there are detailed records of multiple consecutive appraisal cycles to demonstrate that the employee’s performance continues to fall below expectations and that the employee has been given opportunities and support to improve. This may include documented evidence of attempts to develop performance improvement plans, provide additional training, adjust job responsibilities, etc. If the dismissal is due to disciplinary violations, it is necessary to collect all relevant evidence, such as witness statements, surveillance videos, electronic communication records, etc., and ensure that the collection process of these evidences complies with legal regulations and company policies.

Before officially initiating the dismissal procedure, the employer should hold an internal meeting and invite the participation of the human resources department, legal department, relevant department heads, etc. to comprehensively assess the necessity and potential risks of dismissal. This meeting should discuss in detail the legal basis for the dismissal, possible alternatives, the potential impact on the company’s operations and reputation, and possible legal challenges. The conclusions of the meeting should be recorded in writing as an important basis for the decision-making process.

Next comes the formal interview with the employee, which is one of the most critical and sensitive aspects of the dismissal process. The interview should be conducted in a private setting, preferably in the morning or midday on a weekday, and avoid Fridays or the eve of holidays to give the employee enough time to process the news. The interview team should typically include the direct supervisor, a human resources representative, and, if possible, a neutral third party (such as a union representative) present. The interview should begin with a clear statement of the purpose of the meeting, followed by a detailed explanation of the reasons for considering dismissal. It is important to give employees ample opportunity to express their views and defend themselves. Interviewers should remain professional and empathetic, listen carefully to employee feedback, and take detailed notes.

If it is decided after the interview to proceed with the dismissal process, the employer will need to prepare a formal dismissal notice. This document needs to be prepared with great care as it may become key evidence in future legal proceedings. The notice should include the following detailed information: the specific reasons and legal basis for the dismissal, the effective date of the dismissal, the notice period or the amount in lieu of notice, the detailed calculation of the employee’s rights and interests (such as untaken annual leave compensation, dismissal compensation, etc.), and the employee’s needs Perform handover responsibilities. The notice should also describe procedures for how employees can appeal or challenge the decision. It is recommended that the legal department review the content of the notice to ensure that the wording is accurate and meets legal requirements.

During the notice period, employers need to pay special attention to several aspects. First, ensure that employees can still work normally and receive all their due rights during this period. If safety or confidentiality considerations require an employee to leave immediately, the employer should pay appropriate wages and benefits. Secondly, it is necessary to properly arrange the work handover, including preparing a detailed handover list to ensure that important projects, customer relationships and company assets are properly handed over. In addition, relevant departments need to be notified in a timely manner, such as the IT department logging off employees’ system access rights, and the finance department preparing the final settlement, etc.

For special circumstances, such as the dismissal of union officials or large-scale layoffs, the procedures will be more complicated. Dismissal of trade union officials not only requires approval from the superior trade union organization or labor management department, but may also require the provision of more detailed reasons and evidence. Large-scale layoffs require the formulation of a comprehensive layoff plan, including layoff standards, compensation plans, reemployment support plans, etc., and multiple rounds of negotiations with labor unions or employee representatives. This process can take weeks or even months, and employers need to handle each step patiently and carefully.

After the dismissal takes effect, the employer also faces a number of important tasks. This starts with settling all payables promptly and accurately. This includes not only basic salary and compensation, but may also involve the calculation of complex items such as bonuses, commissions, unused paid time off, etc. It is recommended that the financial department calculate it carefully and provide detailed calculation instructions. Secondly, the employer needs to handle various paperwork, including issuing separation certificates, work experience certificates, social security settlements, etc. The timely provision of these documents is not only a legal requirement, but also reflects the employer’s professionalism and integrity.

It is important to maintain clear and complete documentation throughout the dismissal process . This includes not only the formal dismissal documents, but also all relevant email correspondence, meeting minutes, phone call records, etc. These records should be archived in chronological order and kept securely for possible future legal proceedings.

Employers also need to consider the impact of dismissal on remaining employees. An internal communications meeting may need to be scheduled to explain the context of the termination decision (without violating privacy) , answer employee concerns, and reiterate the company’s direction and commitment to employees. This helps maintain employee morale and company reputation.

Employee dismissal in Vietnam is a complex process that requires a high degree of caution and professionalism. Each step may involve legal risks and operational challenges. Therefore, employers are strongly encouraged to work closely with experienced employment law experts throughout the entire process to ensure that every decision and action is fully considered and legally scrutinized. At the same time, employers should consider dismissal as a last resort and fully explore other possible solutions before doing so, such as job adjustments, additional training, or internal transfers. Dismissal procedures should only be implemented with caution if it is absolutely impossible to continue the employment relationship.

Consequences and risks of illegal dismissal

Illegal dismissal may bring serious consequences and risks in Vietnam, which not only involves legal penalties, but may also have a profound impact on the company’s reputation and operations. The following is a detailed explanation of the consequences and risks of illegal dismissal:

From a legal perspective, unlawful dismissal can result in the employer facing serious legal sanctions. Under Vietnamese labor law, if a court or labor arbitration institution determines that the dismissal is illegal, the employer may be required to reinstate the employee. This means that the employer not only needs to rehire the laid off employee, but also pay back all wages and social security expenses incurred during the layoff period. In some cases, if an employee is unwilling to return to their original job, the employer may be required to pay additional compensation, which is usually calculated based on the employee’s years of service and monthly salary. In addition, the court may require the employer to pay additional compensation to cover the emotional distress and reputational damage suffered by the employee as a result of the unlawful dismissal.

Unlawful dismissal may trigger an investigation by the labor inspectorate. Vietnam’s labor inspection agency has the power to conduct surprise inspections of companies suspected of violating the law and comprehensively review the company’s labor management practices. This kind of investigation will not only focus on specific dismissal cases, but may also extend to the company’s overall employment system, salary payment, social insurance payment, etc. If other violations are discovered, the company may face multiple administrative penalties, including fines, rectification within a time limit, and in serious cases, it may even be required to suspend business activities.

From a financial perspective, unlawful dismissal can place a huge financial burden on a company. In addition to the compensation and damages mentioned above, the company also needs to bear high litigation costs, including attorney fees, litigation costs and possible expert witness fees. These costs may significantly exceed those incurred in normal dismissal proceedings. More importantly, long-term legal disputes may distract the company’s management and affect normal operating decisions and business development.

Unlawful dismissal can also cause serious damage to a company’s reputation. In today’s social environment where information is highly transparent, labor disputes can easily become the focus of media attention. Negative news reports can spread quickly, damaging a company’s image with the public, customers and partners. This reputational damage may lead to the loss of customers, hindered business cooperation, and even affect the company’s performance in the capital market. For listed companies, negative news caused by illegal dismissal may even cause the stock price to fall.

From the perspective of human resources management, illegal dismissal may seriously affect the company’s employee relations and team atmosphere. Other employees may feel insecure at work, which may reduce work motivation and may even lead to more labor disputes. This unstable atmosphere may lead to the loss of core talents and affect the company’s long-term development. At the same time, the company may also encounter difficulties in future recruitment, and excellent job applicants may choose other employers due to the company’s negative evaluation.

In addition, illegal dismissal may affect the company’s relations with government departments and labor unions. In Vietnam, good government-enterprise relations and labor-management relations are crucial to the smooth operation of the company. Frequent labor disputes may lead government departments to adopt stricter regulatory measures on companies, and labor unions may also adopt a more aggressive attitude to protect employees’ rights and interests. This may cause the company to face more challenges and restrictions in its daily operations.

For multinational companies, illegal dismissals in one region can trigger chain reactions around the world. Headquarters may lose trust in the local management team, leading to personnel changes or a reduction in management authority. In extreme cases, companies may even re-evaluate their investment strategies in the region, affecting future business expansion plans.

To sum up, the consequences and risks of illegal dismissal are multifaceted, involving legal, financial, reputation, human resources management and many other levels. These risks may not only bring short-term economic losses to the company, but may also affect the company’s long-term development strategy. Therefore, when considering dismissing employees, employers must exercise caution, strictly follow legal procedures, and fully assess potential risks. It is recommended that before making a dismissal decision, you consult a professional labor legal advisor to fully understand the relevant legal provisions and formulate a legal and compliant dismissal plan. At the same time, companies should establish a sound human resources management system, focus on employee relationship management, try to resolve labor conflicts through communication, training, job transfers, etc., and use dismissal as the last option. Only in this way can we minimize the risk of illegal dismissal and protect the company’s legitimate rights and long-term development.

Dismissal processing under special circumstances (such as probation period, pregnant employees, etc.)

In the Vietnamese labor law system, special caution is required when handling dismissal under special circumstances, especially when it involves probationary employees, pregnant employees, employees on maternity leave and other groups. Dismissals in these exceptional circumstances not only need to follow general dismissal procedures, but also need to take into account additional legal protections and special provisions. The methods and precautions for handling dismissal under these special circumstances will be elaborated below.

Although the law gives employers greater flexibility in dismissing employees during their probationary period, certain rules still need to be followed. The purpose of the trial period is for the employer and employee to get to know each other and assess whether they are suitable for a long-term partnership. According to Vietnamese labor law, the probation period cannot exceed a maximum of 60 days (can be extended to 180 days for senior management positions). During the probation period, if the employee’s work performance does not meet requirements, the employer may terminate the employment relationship without giving advance notice or compensation. However, this does not mean that employers can fire probationary employees at will. The employer still needs to have a good reason to prove that the employee does not meet the job requirements, such as failure to complete assigned tasks, low quality work, and inability to adapt to the work environment. At the same time, employers need to keep detailed evaluation records, including work assignments, performance evaluations, feedback communications, etc., to prevent possible labor disputes. It is important to note that even during the probationary period, employers may not fire employees for discrimination, retaliation or other unlawful reasons.

The law provides special protection against dismissal of pregnant employees. Vietnam’s labor law clearly stipulates that employers are not allowed to fire female employees due to pregnancy. This protection extends from the beginning of pregnancy until the child reaches 12 months of age. During this period, even if the company needs to lay off employees due to operating difficulties, pregnant and breastfeeding employees should be given priority to retain. If it is true that appropriate work cannot be arranged due to company structural adjustments or technological changes, the employer must also negotiate with employees. Possible solutions include paid leave, adjustment of job positions or working hours, etc. Only after exhausting all possible options and the parties still cannot reach a consensus on continued employment, the labor contract can be considered to be terminated. But even in this case, additional compensation needs to be paid and ensure that it does not affect the employee’s right to enjoy maternity leave and related social security benefits.

The law also provides strict protection for employees who are on maternity leave. During maternity leave, the employer may not fire or terminate the labor contract for any reason. Even if a fixed-term contract expires during maternity leave, it should be automatically extended until the end of maternity leave. After maternity leave ends, employees have the right to return to their original jobs. If the original position no longer exists, the employer must arrange other suitable jobs and ensure that the salary and benefits are not lower than the level before the maternity leave. Only in extreme cases where the company completely ceases business activities, it may consider terminating the labor relationship with an employee on maternity leave, but special compensation will also need to be paid in this case.

Dismissal also requires special caution for employees who have a long-term illness or are being treated for a work-related injury. According to Vietnam’s labor law, employers are not allowed to fire employees due to illness or work-related injuries, unless a medical institution certifies that the employee has lost the ability to work. Even in this case, dismissal needs to follow specific procedures, including full communication with employees and their families, providing reasonable compensation packages, etc. Employers also need to bear additional responsibilities for employees who are injured at work, such as ensuring that they receive appropriate medical treatment and rehabilitation training, and providing work suitable for their physical condition if conditions permit.

In addition, the dismissal of union officials or employee representatives also requires special attention. Such employees usually enjoy additional legal protections to ensure that they are free to exercise their duties on behalf of employees’ interests. Dismissal of trade union officials requires not only sufficient reasons, but also approval from the superior trade union organization or labor management department. Even if approved, the dismissal process needs to be more careful and may need to be supported by more evidence and documentation.

Employers also need to pay attention to the following points when dealing with dismissals in these special circumstances: First, be transparent and fair. Even in the face of special protection groups, if there is indeed a serious violation of discipline or other legitimate reasons for dismissal, the employer still has the right to dismiss according to law, but the procedure must be more rigorous. Second, strengthen communication and documentation. Adequate communication and detailed documentation can greatly reduce potential legal risks when handling these sensitive cases. Again, seek professional advice. Given the complexities of these unique situations, it is strongly recommended to consult with an experienced employment law expert before making any decisions.

Employers should establish a sound human resources management system, including a clear performance evaluation system, fair disciplinary procedures, flexible work arrangement options, etc. Not only will this help prevent potential industrial disputes, but it will also provide a solid basis for dismissal decisions if necessary. At the same time, employers should cultivate an inclusive and supportive corporate culture and respect the legitimate rights and interests of employees, which will help establish harmonious labor relations and reduce the need for extreme measures such as dismissal.

How to calculate dismissal compensation

In Vietnam, the calculation of dismissal compensation is a complex and important process that not only involves legal provisions but also requires consideration of multiple factors and specific circumstances. The purpose of severance compensation is to provide laid-off employees with a certain level of financial security and help them through the transition period to find a new job. The following is a detailed explanation of the calculation method of severance compensation:

We first need to be clear that not all dismissal situations require the payment of compensation. According to Vietnamese labor law, dismissal compensation is only required under certain circumstances. These situations mainly include: layoffs due to structural adjustments and technological changes; the employer’s inability to provide jobs due to force majeure factors; the employer’s unilateral termination of the labor contract (except when the employee is at serious fault), etc.

Where compensation is payable, the calculation is based on two key factors: the employee’s length of service and the average monthly salary. Specifically, the basic calculation formula for severance compensation is: half a month’s average salary as compensation for each year of service. It should be noted here that the working years refer to the time an employee has actually worked in the company, including the probation period, apprenticeship period, and the period of the previously signed labor contract. If the working period is less than one year, the calculation shall be based on the proportion of actual working months.

There are also specific rules for calculating average monthly salary. Usually it is the average salary earned during the 6 consecutive months of employment before dismissal. This includes fixed income such as basic salary, allowances, and subsidies, but does not include non-fixed income such as overtime pay and bonuses. If the employee has worked for less than 6 months, the calculation will be based on the average salary during the actual working period.

For example, assume that an employee has worked for the company for 5 years and 3 months, and his average monthly salary in the last 6 months is VND 10 million. Then his severance pay is calculated as follows:

• Compensation for 5 years: 5 × 0.5 × 10 million = VND 25 million
• Compensation for 3 months: (3/12) × 0.5 × 10 million ≈ 1.25 million VND
• Total compensation: 25 million + 1.25 million = 26.25 million VND

However, reality is often more complex than this basic formula. For example, an employer is not required to pay severance compensation for years of service in which unemployment insurance has been collected. This means that if an employee has been covered by unemployment insurance while working for the company, the actual severance compensation payable may be significantly reduced.

In addition, certain special circumstances may require additional compensation. For example, for pregnant employees or employees on maternity leave, if they are indeed unable to continue their employment, in addition to the normal dismissal compensation, they will also need to pay compensation for an additional two months of wages. For employees who are injured at work or suffer from occupational diseases, if they must be dismissed, in addition to the normal compensation, additional compensation must be paid according to the degree of disability.

The calculation of severance compensation also needs to consider tax issues. According to Vietnamese tax law, the portion of dismissal compensation equivalent to six months’ salary and below is exempt from personal income tax, and the portion in excess is subject to tax. Therefore, this factor also needs to be taken into account when calculating the actual amount paid to employees.

In some cases, a company may choose to pay compensation above the statutory standard to demonstrate good faith or avoid potential disputes. In this case, the additional compensation can be determined through negotiation between the parties and clearly agreed in the separation agreement. In addition, the calculation of dismissal compensation also needs to consider the settlement of other related expenses, such as unused annual leave pay, settlement of current month’s salary, etc. These all need to be dealt with in the final settlement.

It needs to be emphasized that accurate calculation and timely payment of severance compensation is not only a legal requirement, but also an important measure to safeguard the company’s reputation and avoid labor disputes. Therefore, it is recommended that when the company calculates dismissal compensation, it is best to have the human resources department and the financial department jointly calculate it. If necessary, it can consult a professional labor legal consultant to ensure the accuracy and compliance of the calculation.

Although there are basic formulas to follow for calculating dismissal compensation, many factors need to be considered in actual operation, including the specific reason for dismissal, the employee’s special circumstances, the company’s compensation policy, etc. Accurate and fair calculation and payment of severance compensation not only protects the legitimate rights and interests of employees, but also helps the company maintain a good employer image and labor relations.

Analysis of common dismissal dispute cases

Dismissal disputes are a common and complex issue in labor relations in Vietnam. By analyzing some typical cases, we can better understand the legal issues that may be encountered during the dismissal process and how to deal with them. These cases not only provide valuable lessons for employers, but also help employees better protect their rights and interests. Below we will discuss several representative dismissal dispute cases in detail.

The first case involves the layoffs of a foreign-funded enterprise due to business adjustments. The company suddenly laid off 50 employees, including several pregnant and lactating female employees, without sufficient evidence to prove operating difficulties. The company only provided a simple written notice and did not follow legal consultation procedures. The dismissed employees collectively filed a complaint with the Labor Arbitration Commission. Ultimately, the arbitration panel ruled that the company’s dismissal was illegal. Not only are companies required to pay additional compensation to all fired employees, but they are also required to reinstate pregnant and breastfeeding employees. This case highlights the importance of strict compliance with statutory procedures when undertaking large-scale redundancies. Employers need to provide sufficient evidence of operating difficulties, negotiate with trade unions or employee representatives, formulate detailed layoff plans, and pay special attention to the protection of special groups.

The second case concerns wrongful dismissal. A sales manager who had worked for 8 years was fired by the company because his performance was not up to standard. However, the employee had just received the Employee of the Quarter award a month before being fired. The employee believed that the real reason for his dismissal was that he had questioned certain improper practices of the company. During the labor dispute mediation process, the company was unable to provide sufficient evidence to prove that employee performance continued to decline, nor could it explain why the best employees became candidates for dismissal in the short term. Ultimately, the mediation committee recommended that the company reach a settlement with the employees and pay compensation equivalent to 18 months’ wages. This case highlights the need to have solid, objective reasons for terminating an employee and to keep complete records of performance evaluations. At the same time, it also warns employers not to use dismissal as a means of retaliation for employees’ legitimate opinions.

The third case involved the dismissal of a probationary employee. A technology company informed a programmer at the end of his probation period that he had failed his probation and needed to leave immediately. The employee believed that he had successfully completed all assigned tasks and that the company’s sudden dismissal was not justified. During the arbitration process, the company was unable to provide clear evaluation criteria for the probation period and specific performance evaluations of the employee. The tribunal held that although the standards for probationary dismissal are looser, the employer still needs to have a reasonable assessment process and clear reasons for disqualification. Ultimately, the company was required to pay the employee the difference in salary during the probation period and additional compensation. This case reminds employers that even during the probation period, they need to establish a clear evaluation system, keep evaluation records, and give employees timely feedback.

The fourth case concerns dismissal due to disciplinary violations. A worker at a manufacturing company was fired for repeated lateness and absenteeism. The company produced attendance records and multiple warning notices. However, the worker argued that his tardiness and absenteeism were due to the need to care for a sick child and that he had verbally requested leave from his immediate supervisor, but the company had no formal leave process. After investigation, the labor inspection department believed that although the employee did have attendance problems, the company did not fully consider the employee’s special situation before dismissal, nor did it provide sufficient opportunities for correction. In the end, the two parties reached an agreement under the mediation of the supervisory department, and the company agreed to give employees a chance to make corrections and improved the leave system. This case illustrates that even when an employee has clearly violated discipline, the employer needs to fully consider the situation when making a dismissal decision, follow a progressive disciplinary procedure, and give the employee a reasonable opportunity to defend himself and make corrections.

The final case involves dismissals resulting from corporate restructuring. A multinational company’s subsidiary in Vietnam restructured its business and decided to lay off 30% of its employees. The company notified all employees three months in advance and provided a compensation package that was higher than the legal standard. However, some employees still question the selection criteria for the layoff list, arguing that there is age discrimination. After multiple rounds of negotiations with the local labor department and labor unions, the company agreed to adjust the layoff plan, increase the option of voluntary resignation, and provide additional vocational training subsidies for employees over 45 years old. This case illustrates how potential discrimination issues can exist even in large-scale layoffs that appear to be legal. Employers need to set fair and transparent layoff standards and maintain full communication with employees and relevant departments during the process.

By analyzing these cases, we can draw several important insights:

• Regardless of the reason for dismissal, legal procedures must be strictly followed and complete documentation must be maintained.
• Before making a dismissal decision, the employee’s specific situation should be fully considered and reasonable opportunities for defense and correction should be given.
• For employees from special groups, such as pregnant women, lactating women, trade union officials, etc., extra caution and stricter procedures need to be followed when dismissing them.
• When making redundancies, it’s crucial to set fair, transparent criteria and maintain good communication with employees.
• Even in seemingly justified dismissal situations, there may be potential legal risks, so it is recommended to consult professional employment law counsel before making important decisions.

Dismissal is a complex and sensitive process that requires the employer to fully respect the rights and interests of employees and comply with relevant laws and regulations while protecting the company’s interests. By studying these cases, employers can better prevent and handle possible labor disputes and maintain good labor relations.

Management advice to reduce the risk of dismissal

In Vietnam’s business environment, effectively managing dismissal risks is not only about the company’s legal compliance, but also the key to maintaining corporate reputation and maintaining good labor relations. By taking a series of preventive measures and establishing a sound management system, companies can significantly reduce the legal risks and potential disputes related to dismissal. Below is some comprehensive and detailed management advice designed to help companies better deal with the sensitive topic of dismissal.

Establishing a sound human resources management system is the basis for reducing the risk of dismissal. This system should include clear company policies, employee handbooks, job descriptions, performance evaluation criteria, etc. In particular, detailed disciplinary procedures should be developed to clearly define how various disciplinary infractions will be dealt with, from verbal warnings to written warnings and ultimately dismissal. Such a system not only provides a basis for management decisions, but also gives employees a clear understanding of the company’s expectations and possible consequences. It is important that these policies and procedures comply with Vietnamese labor laws and be regularly updated to adapt to changes in the law.

Strengthening employee training and communication is an important means to prevent the risk of dismissal. The company should organize regular training to let employees fully understand company policies, work requirements and codes of conduct. This includes not only onboarding, but also regular refresher and refresher training. At the same time, it is also important to establish open and transparent communication channels. Managers are encouraged to have regular one-on-one conversations with employees to provide timely feedback on work performance and point out areas for improvement. This ongoing communication can help identify and resolve problems early, before minor issues turn into larger issues that require firing.

Implementing a fair and objective performance review system is also key to reducing the risk of dismissal. The system should be based on clear, measurable criteria, evaluated regularly, and detailed records of evaluations maintained. The evaluation results should be communicated to employees in a timely manner. For employees with poor performance, specific improvement plans should be formulated and reasonable time and resource support should be provided. This will not only help employees improve their performance, but also provide sufficient evidence to support possible dismissal.

When dealing with employee disciplinary issues, a progressive disciplinary approach can effectively reduce the risk of dismissal. Unless there is a serious disciplinary breach, a verbal warning should be given first, followed by a written warning, and finally considered for dismissal. Every step must be recorded in detail, including the specific circumstances of the disciplinary violation, the handling process, correction requirements, etc. Giving employees sufficient opportunities to make corrections not only reflects the company’s humane care, but also legally proves that the company has done its best.

For layoffs that may be necessary, it is crucial to have detailed plans in place in advance. This plan should include the reasons, scope, standards, compensation plan, etc. for layoffs. Before implementation, full consultation with labor unions or employee representatives should be conducted to listen to opinions and make appropriate adjustments. At the same time, consider taking other alternative measures, such as adjusting working hours, temporarily reducing wages, encouraging voluntary departures, etc., to minimize the number of involuntary dismissals. It is important to be transparent and fair throughout the process to reduce employee dissatisfaction and potential legal risks.

For special groups of employees, such as pregnant women, lactating women, trade union officials, etc., it is necessary to formulate special management policies and dismissal review procedures. These policies should clearly set out the circumstances under which these specially protected employees may be considered for termination and the additional procedures that need to be followed. For example, approval from the superior union or labor management department may be required. When dealing with such sensitive cases, it is recommended to consult professional employment legal counsel to ensure the legality of the process.

Establishing internal grievance and mediation mechanisms is also an effective way to reduce the risk of dismissal. This mechanism allows employees to have a formal channel to express their opinions and seek internal resolution when they feel they are being treated unfairly. Not only does this allow potential disputes to be identified and resolved early, it also shows that the company is willing to listen to and value employee voices. In some cases, effective internal mediation can prevent issues from escalating to the point of requiring dismissal or legal action.

It is also very important to strengthen the training of managers. Ensure managers at all levels are fully aware of labor regulations, company policies and proper management practices. Especially when dealing with employee issues and making termination decisions, managers should know how to properly document issues, how to communicate effectively, and when to seek assistance from human resources or legal counsel.

It is also necessary to establish a multi-departmental review mechanism before any dismissal occurs. This mechanism can include representatives from the human resources department, the legal department, relevant business departments, etc. A multi-faceted review ensures that the dismissal decision is based on sufficient reasons and evidence and complies with all relevant laws and company policies.

Finally, continuing to monitor and adapt to changes in the law is also an important aspect of reducing the risk of dismissal. The labor legal environment in Vietnam is constantly evolving, and companies need to designate dedicated personnel to track the latest legal developments and adjust company policies and practices in a timely manner. Regularly inviting legal experts for training or consultation can help companies better understand and respond to new legal requirements.

To sum up, reducing the risk of dismissal requires enterprises to take comprehensive and systematic management measures. This includes not only establishing sound systems and processes, but also strengthening daily management practices and cultivating an open and fair corporate culture. Through these efforts, companies can not only reduce the legal risks caused by dismissal, but also establish more harmonious labor relations and improve employee loyalty and productivity. Importantly, these measures should not be viewed as stand-alone projects but should be integrated into the day-to-day operations of the business and become part of the company culture and management philosophy. When faced with inevitable dismissal situations, these preparations will provide the company with a solid backing and help handle this sensitive issue in a more legal, reasonable and humane way.