Shall the employer be allowed to cut pay and impose a fine for the employee violating company rules in Vietnam?
What are the regulations on disciplinary measures in Vietnam?
Pursuant to the provisions of Article 124 of the Labor Code 2019, disciplinary measures are as follows:
Article 124. Disciplinary measures
1. Reprimand.
2. Deferment of pay rise for up to 6 months.
3. Demotion.
4. Dismissal.
Thus, employers are not allowed to cut pay and impose a fine for employees.
What are the forbidden actions when imposing disciplinary measures in Vietnam?
According to the provisions of Article 127 of the Labor Code 2019, the forbidden actions when imposing disciplinary measures are:
Article 127. Forbidden actions when imposing disciplinary measures in the workplace
1. Harming the employee's health, life, honor or dignity.
2. Applying monetary fines or deducting the employee’s salary wage.
3. Imposing a disciplinary measure against an employee for a violation which is not stipulated in the internal labor regulations or employment contract or labor laws.
What is the penalty of employers cutting pay and imposing a fine for employees in Vietnam?
According to Article 19 of Decree 12/2022/ND-CP on penalties for administrative violations against regulations on labour, social insurance, and Vietnamese guest workers as follows:
Article 19. Violations against regulations on labour discipline and material responsibility
1. A fine ranging from VND 1.000.000 to VND 3.000.000 shall be imposed upon an employer for failing to make internal labour regulations publicly available to their employees or failing to post the major contents of the internal labour regulations at necessary sites at the workplace.
2. A fine ranging from VND 5.000.000 to VND 10.000.000 shall be imposed upon an employer for commission of one of the following violations:
a) Failing to apply written internal labour regulations when employing 10 employees or more;
b) Failing to follow procedures for registration of internal labour regulations as prescribed by law;
c) Failing to consult with the internal representative organization of employees (if any) before issuing or revising the internal labour regulations;
d) Applying the internal labour regulations which have not been yet in effect or have become null and void;
dd) Failing to follow processes, procedures and time limits set out in law when implementing disciplinary measures at work or paying compensation for damage;
e) Suspending employees from work for a duration exceeding the maximum suspension period prescribed by law;
g) Before suspending employees from work, failing to consult with the internal representative organization of employees to which the employee is a member.
3. A fine ranging from VND 20.000.000 to VND 40.000.000 shall be imposed upon an employer for commission of one of the following violations:
a) Harming the employee's health, life, honor or dignity when imposing disciplinary measures in the workplace if not liable to criminal prosecution;
b) Applying monetary fines or deducting the employee’s salary wage instead of disciplinary measures;
c) Imposing a disciplinary measure against an employee for a violation which is not stipulated in the internal labour regulations or employment contract or labour laws;
d) Imposing more than one disciplinary measure for one violation;
dd) Imposing disciplinary measures against an employee during the period when he/she is taking leave on account of illness or convalescence, or on other types of leave with the employer’s consent; he/she is being held under temporary custody or detention; he/she is waiting for verification and conclusion of the competent authority for acts of violations specified in Clause 1 and Clause 2 Article 125 of the Labour Code.
4. Remedial measures
a) The employer that commits the violation in Point dd Clause 2 or Point c Clause 3 of this Article is compelled to reinstate the employee and pay full salary as agreed in the employment contract to employee for the period during which the employee is dismissed by the employer for disciplinary reasons.
b) The employer that commits the violation in Point e or g Clause 2 of this Article is compelled to pay full salaries to employees during the period they are suspended from work.
c) The employer that commits the violation in Point a Clause 3 of this Article is compelled to issue public apology to the employee and fully pay treatment costs and salary to the employee during his/her treatment period if the employee is physically harmed to the extent that he/she must receive treatment at health facilities.
d) The employer that commits the violation in Point b Clause 3 of this Article is compelled to return collected amounts or pay full salaries to employees.
Thus, for your question, employers are not allowed to cut pay and impose a fine for employees. In case employers still imposes a fine or cuts the employee's salary, a fine of between VND 20 million and VND 40 million will be applied. In case employers is an organization, the fine will be twice the fine of the individual mentioned above. At the same time, employers must fullly return the collected amount or pay the employee.
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