What are the regulations on compensation for damage when an employee causes damage? What are the regulations on time limits for claiming compensation in Vietnam?
What are the regulations on compensation for damage when an employee causes damage?
Pursuant to Article 129 of the 2019 Labor Code of Vietnam providing for compensation for damage at work as follows:
- An employee who causes damage to equipment or otherwise damages the employer’s assets shall have to pay compensation in accordance with labor laws or the employer’s internal labor regulations.
- In case the damage caused by an employee is not serious, not deliberate and is worth less than 10 months’ region-based minimum wage announced by the Government, the employee shall have to pay a compensation of not more than his/her 03 months’ salary, which shall be monthly deducted from his/her salary in accordance with Clause 3 Article 102 of the 2019 Labor Code of Vietnam as follows: Any monthly deduction shall not exceed 30% of the net monthly salary of the employee, after the payment of compulsory social insurance, health insurance, unemployment insurance premiums and personal income tax.
- An employee who loses the employer’s equipment or assets, or consumes the materials beyond the set limits shall pay a compensation for damage in full or in part at the market price or as stipulated in the internal labor regulations or the responsibility contract (if any).
In case this is caused by a natural disaster, fire, war, major epidemic, calamity, or another force majeure event which is unforeseeable and insurmountable, and all necessary measures and possibilities for avoidance have been taken, the compensation shall not be required.
What are the regulations on compensation for damage when an employee causes damage? What are the regulations on time limits for claiming compensation in Vietnam?
What are the regulations on time limits for claiming compensation in Vietnam?
Pursuant to the provisions of Article 72 of Decree No. 145/2020/ND-CP on the time limits for claiming compensation at work as follows:
- The time limit for claiming compensation is 06 months from the day on which the employee causes damages or loses an asset of the employer or otherwise causes damage to the employer’s assets or exceeds the consumption limit.
- Compensation shall not be claimed against employees during the periods in the cases specified in Clause 4 Article 122 of the 2019 Labor Code of Vietnam:
+ The employee is taking leave on account of illness or convalescence; or on other types of leave with the employer’s consent;
+ The employee is being held under temporary custody or detention;
+ The employee is waiting for verification and conclusion of the competent agency for acts of violations, stipulated in Clause 1 and Clause 2 Article 125 of the 2019 Labor Code of Vietnam:
++ The employee commits an act of theft, embezzlement, gambling, deliberate infliction of injuries or uses drug at the workplace;
++ The employee discloses technological or business secrets or infringing the intellectual property rights of the employer, or commits acts which are seriously detrimental or posing seriously detrimental threat to the assets or interests of the employer, or commits sexual harassment in the workplace against the internal labor regulations;
+ The employee is pregnant, on maternal leave or raising a child under 12 months of age.
- At the end of the period specified in Clause 4 Article 122 of the 2019 Labor Code of Vietnam, if the time limit for claiming compensation has not expired or the remaining time is shorter than 60 days, the time limit may be extended for up to 60 more days from the end of the period specified in Clause 4 Article 122 of the Labor Code.
What are the compensation procedures for damage at work?
Compensation procedures for damage at work are specified in Article 71 of Decree No. 145/2020/ND-CP as follows:
- In cases where an employee causes damages or loses an asset assigned by the employer or otherwise causes damage to the employer’s assets or exceeds the consumption limit, the employer will request the employee to prepare a written report on the incident.
- Within the time limit for claiming compensation specified in Article 72 of this Decree, the employer shall conduct a compensation hearing as follows:
+ At least 05 working days before the compensation hearing is held, the employer shall notify the participants, including:
++ The persons specified in Point b and Point c Clause 1 Article 122 of the 2019 Labor Code of Vietnam and the valuer (if any).
++ Make sure these participants receive the notification before the hearing takes place.
The notification shall specify the hearing time and location, full name of the employee that causes the damage and the damage caused by him/her;
+ Upon receipt of the employer’s notification, the mandatory participants mentioned in Point a of this Clause shall send the employer confirmation of their participation.
In case any of the mandatory participants cannot participate in the hearing, the employee and the employer shall reach an agreement on change of time and/or location of the hearing. In case such an agreement cannot be reached, the employer shall make the final decision;
+ The employer shall conduct the compensation hearing at the time and location mentioned in Point a and Point b of this Clause.
In case any of the mandatory participants mentioned in Point a of this Clause does not confirm his/her participation or is not present, the employer shall still conduct the hearing.
- Minutes of the compensation hearing shall be taken and ratified before the end of the hearing. The minutes shall bear the signatures of the participants as prescribed in Point a Clause 2 of this Article. In case a person refuses to sign the minutes, the minutes taker shall specify his/her full name and reasons for refusal in the minutes.
- The compensation decision shall be issued within the time limit for claiming compensation; specify the damage caused and the causes of damage; the compensation level; deadline and method of compensation payment.
- Other cases of compensation for damage shall comply with regulations of the Civil Code.
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