Unilateral termination of the labor contract and labor discipline – What options are available to the employer?

• Employees have the right to unilaterally terminate the labor contract in all cases where they no longer have the desire or wish to continue working with the employer.

• The employer has the right to unilaterally terminate the labor contract if it falls under one of the 06 cases allowed by labor law. 

The employer applies one of the labor discipline stipulated by law to handle the violation of the employee.  

In order to handle labor discipline, the employer needs to fulfill the following conditions: 

As for the statute of limitations for labor discipline (Article 123 of the Labor Code 2019). 

The employer must prove the employee’s fault (Article 122.1.a of the Labor Code 2019). 

Disciplinary action must be specified in the internal labor regulations or agreed upon in the signed labor contract or labor laws (Article 127.3 of the Labor Code 2019). 

Step 1: Preparing a record of the violation  

The employer collects evidence to prove the violation, prepares a record of the violation, and notifies the representative organization of the employee at the workplace where the employee is a member. 

Step 2: Notice of conducting the disciplinary hearing for labor discipline 

The invitation notice for the disciplinary meeting for labor discipline must be sent at least 05 working days prior to the scheduled date of the meeting. The content of the invitation notice must include the following information: 

• Content;

• Time; 

• Location of the meeting; 

• Full name of the employee subject to labor discipline; 

• The violation subject to labor discipline. 

Step 3: Conduct the meeting with the required participants as prescribed 

Step 4: Issue the decision on labor disciplinary 

The authorized person responsible for labor disciplinary measures action shall issue the decision on labor disciplinary action and send it to the required participants of the meeting. 

The decision on labor disciplinary action must be issued within the statute  of limitations of the labor disciplinary process or the extended time limit of the labor disciplinary process. 

Other issues to consider during the process of labor discipline are:   

 1. The individuals who are not subject to disciplinary action for a certain period of time are: 

1. Sick leave, nursing leave; resignation with the consent of the employer; 
2. Currently under temporary detention, temporary imprisonment; 
3. Awaiting the results of the competent investigative authority’s verification and conclusion regarding the violation specified in Article 125, clause 1 and 2 of the Labor Code 2019. 
4. Pregnant female employees; employees on maternity leave, breastfeeding their children under 12 months old.

2. Not applying prohibited behaviors as specified in Article 127 of the Labor Code 2019: 

1. Infringing upon the health, dignity, life, reputation, and human dignity of the employee; 
2. Imposing fines, wage deductions instead of implementing labor disciplinary measures. 
3. Applying labor discipline to employees for violation that is not specified in the labor regulations or agreed upon in the signed labor contract, or not regulated by labor laws. 

a. Performing the obligation of prior notification to the employer. Specifically:

i. At least 45 days if working under an indefinite-term labor contract; 

ii. At least 30 days if working under a fixed-term labor contract with a duration ranging from 12 months to 36 months; 

iii. At least 3 working days if working under a fixed-term labor contract with a duration of less than 12 months; 

iv. For certain industries, occupations, and specialized jobs, the advance notice period is implemented according to the regulations of the Government. 

b. In cases where the obligation of prior notification is not required: when one of the 07 cases specified in Article 35.2 of the Labor Code 2019 occurs.

a. Performing the obligation of prior notification to the employee. Specifically: 

i. Unilateral termination of the labor contract in cases specified in points a, b, c, d, and g clause  1, Article 36 of the Labor Code: 

+ At least 45 days for indefinite-term labor contract;

+ At lease 30 days for a fixed-term labor contract with a duration ranging from 12 months to 36 months;  

+ At least 03 working days for  a fixed-term labor contract with a duration of less than 12 months and for cases specified in point b, Article 36.1 of the Labor Code 2019. 

+ For certain industries, occupations, and specialized jobs, the advance notice period is implemented according to the regulations of the Government. 

ii. In cases where the obligation of prior notification is not required: 

+ When unilaterally terminating the labor contract as stipulated in points d and e of Article 36.1 of the Labor Code 2019. 

b. In cases where the right to unilaterally terminate the labor contract is not allowed: when one of the 3 cases specified in Article 37 of the Labor Code 2019 occurs. 

Legal consequences of non-compliance 

1. Disqualification from receiving severance benefits.

2. Compensation must be provided to the employer. 

a. Half a month’s salary according to the labor contract; and 

b. An amount equivalent to the salary according to the labor contract for the days without prior notice. 

3. Reimburse the training fees to the employer as stipulated in Article 62 of the Labor Code 2019. 

Case 1: If the employer accepts the employee’s return to work under the previously signed labor contract, the employer must pay the employee the following amounts:  

1. Wages, social insurance, health insurance, and unemployment insurance for the days when the employee was unable to work; 
2. A sum of money equal to at least 2 months’ wages as stipulated in the labor contract.
3. A sum of money corresponding to the wages as per the contract for the days without prior notice in case of violation of the prescribed notice period (if applicable). 

Case 2: If the employee does not wish to continue working, the employer must pay the employee the following amounts: 

1. The amounts mentioned in Case 

2. Severance allowance. 

Case 3: If the employer does not wish to rehire the employee and the employee agrees, the employer must pay the employee the following amounts: 

1. The amounts mentioned in Case 

2. Severance allowance. 

3. A sum of money equal to at least 2 months’ wages as stipulated in the labor contract.