Judgement no. 14/2020/LD-PT dated december 24, 2020 regarding salary, social insurance, unilateral termination of labor contract

PEOPLE’S COURT OF BINH DUONG PROVINCE

JUDGEMENT NO. 14/2020/LD-PT DATED DECEMBER 24, 2020 REGARDING SALARY, SOCIAL INSURANCE, UNILATERAL TERMINATION OF LABOR CONTRACT

On December 24, 2020, at its headquarter, the People's Court of Binh Duong province is opening an appellate court to the public to try the labor case No. 13/2020/TLPT-LD entertained on October 22, 2020 regarding “Dispute over salary, social insurance and unilateral termination of labor contract”.

Owing to the preliminary ruling on labor No. 01/2020/LD-ST dated May 28, 2020 of the People’s Court of city T, Binh Duong province which is appealed and protested. 

Pursuant to the Decision to bring the case to the appeal hearing No. 18/2020/QD-PT dated December 2, 2020, and the Decision on adjournment of the court hearing No. 13/2020/QD-PT dated December 11, 2020, between litigants:

- Plaintiff: Mr. G.J.P, born in 1988; Nationality: China - Passport number: E47814710; residence address: city T, Binh Duong province; contact address: city T, Binh Duong province;

Plaintiff’s legal representative: Mr. P.T.T.T, born in 1983; residence address: city T, Binh Duong province; contact address: city T, Binh Duong province, is a representative authorized by the plaintiff (the power of attorney dated July 18, 2019).  (submitting the trial in absentia claim)

- Defendant: Company H; address: city T, Binh Duong province;

Defendant’s legal representative: Mr. H.T.V, born in 1976; residing at: Town D, Binh Duong province; contact address: Town D, Binh Duong province, is a representative authorized by the defendant (the power of attorney dated May 14, 2019).

- Persons with associated rights and obligations:  Social Security of city T, Binh Duong province; currently Social Security of Binh Duong province, address: City T, Binh Duong province. (According to the Notice of Merger No. 3247/TB-BHXH dated December 16, 2019). The legal representative: Mrs. N.T.M.H – Title: Deputy Head of the Inspection – Review Division of the Social Security of Binh Duong province is the authorized representative according to the power of attorney No. 42/UQ-BHXH dated December 10, 2020 of the Social Security of Binh Duong province.   (submitting the trial in absentia claim).

- Appellant:

+ Plaintiff Mr. G.J.P.

+ Defendant Company H.

- Protester: General Procurator of the People’s Procuracy of city T.

CASE DETAILS

* According to the petition to sue dated January 16, 2019, the supplementary petition to sue dated November 18, 2019, during the litigation process, the legal representative of the plaintiff, Mr. P.T.T.T, stated that: 

Mr. G.J.P and Company H signed a labor contract on August 1, 2015 with a term of 02 years for the title of sales manager. He was paid the monthly salary of VND 15,000,000 on the 15^th of each month. In addition, the contract had terms and conditions regarding social insurance and medical insurance benefits under law. The contract was concluded on a voluntary basis in compliance with laws. Mr. G.J.P was a foreign worker in Vietnam and was granted the labor permit as per law.  During the working period, Mr. G.J.P always successfully completes his assigned duties, complying with law and internal rules and regulations.

After expiry of the 2-year term of the contract on August 1, 2017, he continued to work here. Company H did not renew the labor contract, but applied for the labor permit for him. The labor permit clearly stated the term of work which started on October 2, 2017 and ended on September 30, 2019, and the workplace which is Company H’s premises. Mr. G.J.P continued to hold the previous post and was paid the same amount of salary.

However, on March 3, 2018, Mr. G.J.P was suddenly sacked. Company H had not sent Mr. G.J.P any written prior notification of this.  Company H asked Mr. G.J.P to hand over his assigned tasks and prohibited him from entering into workplace. Mr. G.J.P was informed of his dismissal in an oral manner.

On March 3, 2018, Mr. G.J.P came but Company H did not allow him in, so he went back to China. On March 6, 2018, Mr. G.J.P came back to Vietnam but Company H did not allow him in.

From August 1, 2015, his first day at work, till now, Mr. G.J.P has not received any salary yet. According to the contract, Company H has to pay Mr. G.J.P salary on the 15^th of each month. However, because he wished to receive the lump-sum payment of salary for his working period when he quits, he did not require Company H to pay him salary on a monthly basis. However, Company H’s unilateral termination of the labor contract in breach of law caused damage to Mr. G.J.P, and its refusal to pay salary and insurance contributions is not allowed by law.

Although the contract had arrangements about social insurance and medical insurance contributions, Company H failed to pay insurance contributions for Mr. G.J.P. This is an offence against law. During the working period, Mr. G.J.P did not know whether Company H had not paid insurance contributions for him.  When being sacked and requiring Company H to pay him salary and fulfill its insurance obligations to him, Mr. G.J.P came to know that Company H had not paid insurance contributions as legally required.

Due to that fact, Mr. G.J.P as the plaintiff sues to petition the Court to resolve his case as follows:

1. Compelling Company H to pay Mr. G.J.P the outstanding salary accrued from August 1, 2015 to July 3, 2018 during the period of his working at Company H (Mr. G.J.P quit on March 3, 2018). However, Mr. G.J.P requested the salary to be paid until July 3, 2018 which marked an additional period of 04 months from the date of his temporary leave to the beginning of March 2018 when he filed the lawsuit (which is dismissed according to the Decision on dismissal No. 01/2019/QDST-LD dated January 10, 2019). The salary amount is calculated as 15,000,000/month x 35 months = VND 525,000,000.

2. The amount of social insurance contributions accrued for a period of 35 months is determined as VND 15,000,000 x 22%/month x 35 months = VND 90,000,000 (though the amount may be more, Mr. G.J.P only claims VND 90,000. 000 to be paid in cash).

3. Total severance allowance accrued during the period of 03 years must be VND 22,500,000.

4. Amounts estimated for the period from the date on which he quit to the trial date due to Company H's unilateral termination of the labor contract in breach of laws (Mr. H did not allow Mr. G.J.P to enter workplace) comprise the followings: Salary, social insurance and health insurance contributions are counted during the days when Mr. G.J.P could not work. The period is from the date on which Mr. G.J.P temporarily quit from work to the date on which the Court heard the trial. After adding at least 02 months' salary according to the contract labor, the total is about VND 90,000,000.

5. The rent for 3 months is VND 3,000,000.

6. The amount of interest on the salary that Company H owed to Mr. G.J.P is estimated from August 15, 2015 to the trial is VND 321,732,000 (this amount is calculated based on the outstanding salary of VND 525,000,000).

In total, Company H must pay Mr. G.J.P VND 1,052,232,000 as an estimated amount.

Mr. G.J.P did not ask Company H to reinstate him because the work permit for his working at Company H was expired on September 30, 2019.

The plaintiff’s petition to sue encloses the following documents and evidences: passport, visa, work permit, labor contract, minutes of conciliation (photocopy), application for confirmation of work (original).

* According to the personal statement dated May 29, 2019, and during the litigation process, the legal representative of the plaintiff, Mr. H.T.V, represents that: 

Company H initially signed a labor contract with Mr. G.J.P on August 1, 2015 with a term of 02 years for the title of manager. He was paid the monthly salary of VND 15,000,000. After the labor contract was expired on August 1, 2017, parties did not renew their contract and Mr. Gan Jing Ping kept working at Company H.   After that, Company H successfully applied for the labor permit that lasts till September 30, 2019 and Mr. G.J.P kept taking the previous post and being paid the previous salary at Company H.

Till March 3, 2018, Mr. G.J.P, of his own accord, came back to his home country and neither returned to Company H to continue to work nor handed over his work.

Currently, Company H has not made any decision or taken any action to imply that it unilaterally terminated the labor contract with Mr. G.J.P. If Mr. G.J.P believes that Company H unilaterally terminated the labor contract, he must give evidence. Mr. G.J.P’s leaving work without the Company’s permission is the way of Mr. G.J.P’s unilateral termination of the labor contract with Company H.

With respect to his salary: During the working period, Company H still paid Mr. G.J.P a salary advance (advance living expenses) of VND 10,000,000/month (there is evidence that Mr. G.J.P received money according to pay checks). Mr. G.J.P’s claiming that he did not receive any salary is not true. If he did not receive a monthly salary, how can Mr. G.J.P afford for his daily living as he is a foreigner coming to work in Vietnam. Every month, Company H has advanced salary from the day Mr. G.J.P worked to the day Mr. G.J.P quit on March 3, 2018. Since Mr. G.J.P is a foreigner far from his home country, he only offered to receive an advance to spend on his living.

During the working period, Company H did not pay social insurance and health insurance contributions for him because Mr. G.J.P is a foreigner. Mr. G.J.P also did not request us to pay social and health insurance contributions for him. Concerning the petition to sue filed by Mr. G.J.P, Company H gave the following opinions:

1. Requesting the Court to apply the statute of limitations for initiating the lawsuit as prescribed in Article 184 of the Civil Procedure Code in Viet Nam regarding the salary and social insurance contributions requested by Mr. GJP but the statute of limitations for initiating a lawsuit from August 1, 2015 to March 2, 2017 is expired. Mr. G.J.P only has the right to claim the outstanding salary accrued during the period from March 3, 2017 to March 3, 2018 which was the date on which Mr. G.J.P quit his job.

2. Requesting the Court not to totally accept Mr. G.J.P’s claim for salaries, social insurance, health insurance contributions during the months including the days when Mr. G.J.P was not allowed to work, and the rents and severance allowances as well as interest on these sums were incurred.

- Company H only agrees to pay Mr. G.J.P the outstanding monthly salary of VND 5,000,000 (falling within the statute of limitations for initiation of legal proceedings) accrued from March 3, 2017 to March 3, 2018 (the date on which Mr. G.J.P quit). The sum is calculated as 12 months x VND 5,000,000 (minus the sum of VND 10,000,000 that Mr. G.J.P was advanced) = VND 60,000,000.

- Company H agrees to pay Mr. G.J.P the sum of social insurance and health insurance contribution that Mr. G.J.P claimed within the statute of limitations for initiation of legal proceedings from March 3, 2017 to March 3, 2018. The sum is calculated as 12 months x VND 15,000,000/month x 22% (the sum for which Company H is liable) = VND 39,600,000.

Total amount is VND 99,600,000, rounded to VND 100,000,000. Finally, Company H agrees to pay Mr. G.J.P VND 100,000,000.

Company H is rejecting all of other claims of Mr. G.J.P.

The defendant submits the following evidence: Labor contract, work permit (photocopy) and paychecks (translated into Vietnamese).

* Persons with associated rights and obligations of Social Security of city T (currently, Social Security of Binh Duong province) issue the statement No. 1678/CV-BHXH dated August 29, 2019, containing the following representations: Till now, the Social Security of city T has had no information on the payment and enjoyment of social insurance and health insurance contributions and benefits with Mr. G.J.P at the Social Security of city T. Company H’s list of employees participating in social insurance and health insurance contribution at Social Security of city T does not include Mr. G.J.P's name.

According to the preliminary ruling No. 01/2020/LD-ST dated May 28, 2019, the People’s Court of city T made the following decisions: 

1. Suspending a part of the petition to sue of the plaintiff, Mr. G.J.P, regarding "Dispute over salary, unilateral termination of labor contract, social insurance, health insurance, unemployment insurance" against the defendant, Company H, in terms of the salary accrued from August 1, 2015 to March 2, 2017.

2. Accepting a part of the petition to sue of the plaintiff, Mr. G.J.P, regarding "Dispute over salary, unilateral termination of labor contract, social insurance, health insurance, unemployment insurance" against the defendant, Company H.

Compelling Company H to be obliged to pay Mr. G.J.P the amount of VND 430,086,823 (four hundred thirty million, zero hundred, eighty-six thousand and eight hundred twenty-three Vietnamese dong).

Compelling Company H and Mr. G.J.P to be responsible for paying compulsory social insurance, compulsory health insurance, and unemployment insurance contributions from August 2015 to September 30, 2019. Total insurance contribution is VND 53,025,000 VND (fifty-three million and twenty five thousand Vietnam dong). In this sum, Mr. G.J.P must pay VND 18,375,000 (eighteen million, three hundred and seventy five thousand Vietnamese dong); Company H must pay VND 34,650,000 VND (thirty four million, six hundred and fifty thousand Vietnamese dong).

Mr. G.J.P's petition to sue against the defendant, Company H, for the amount of VND 569,120,177 (Five hundred and sixty nine million, one hundred and twenty thousand, one hundred and seventy seven Vietnamese dong) shall be rejected.

In addition, the preliminary ruling made an official pronouncement on obligations to defer execution of the ruling, court cost and the rights to appeal of litigants.

On June 1, 2020, the defendant, Company H, appealed against the preliminary ruling, arguing that the trial court's acceptance of the plaintiff's petition to sue for illegal unilateral termination of the contract was ungrounded. Also, requesting the Court of Appeal to review the unpaid salary.

On June 11, 2020, the Chief Procurator of the People's Procuracy of city T issued Decision No. 16/QDKNPT-VKS-LD, making a protest to overturn a part of the preliminary ruling with a view to pronouncing that there are no grounds to determine that the defendant unilaterally terminated the labor contract with the plaintiff in breach of law. The trial court’s ruling that the plaintiff and defendant were forced to pay social insurance contributions from August 2015 to September 30, 2019 is illicit, and that the court cost was charged based on the sum that the trial court forced the defendant to pay as social insurance contribution is incorrect and overlapping.

On June 12, 2020, the plaintiff, Mr. G.J.P, filed an appeal against the preliminary ruling stating that the trial court’s acceptance of a part of the plaintiff's petition to sue regarding unilateral termination of the labor contract with the defendant, and acceptance of a part of his petition to sue regarding salary, are not satisfactory; stating that the trial court’s refusal to compel the defendant to pay 17.5% of social insurance contributions to the plaintiff is not appropriate..

At the court of appeal, the plaintiff, though the plaintiff was absent, he filed the petition to review his repeal. The defendant upheld the petition to appeal and the representative of Binh Duong’s Provincial Procuracy upheld the petition to protest filed by the Chief Procurator of the People's Procuracy of city T.

After studying and examining documents and evidence and based on the arguments at the court session, the judicial of the appeal court has the following comments:

COURT’S JUDGEMENTS

[1] Regarding the legal process:

On June 1, 2020, the defendant filed an appeal against the preliminary ruling. On June 11, 2020, the General Procurator of the People’s Procuracy of city T issued the protest decision.  On June 12, 2020, the plaintiff filed an appeal against the preliminary ruling. According to the provisions of Clause 1 of Article 273 and Article 280 of the Civil Procedure Code, the litigants filed appeals and the Procuracy made a protest within the limitation period, and the defendant already paid the appellate court cost in advance as prescribed. The plaintiff who is an employee is exempt from paying the court cost in advance as prescribed at Point a, Clause 1, Article 12 of the Resolution No. 326/2016/UBTVQH14 in Viet Nam, but the trial court’s request for his advance on the appeal court cost was illegal. The court of appeal should still consider the plaintiff's appeal and refund the advance on the appeal court cost.

[2] Regarding case details:

In the light of the petitions to appeal of litigants and the protest of the Procuracy, the Court has the following judgements:

2.1. Regarding the plaintiff’s appeal related to the salary dispute:

It is irrelevant that the plaintiff's representative assumed that, because the plaintiff has not yet received the salary sum accrued for the period from the date of signing the contract which is August 1, 2015 to July 3, 2018 (this period includes 04 additional months starting from the date on which Mr. G.J.P quit), which is calculated as VND 15,000,000/ month x 35 months = VND 525,000,000, the company must pay such sum. The reason is that the defendant has requested application of the statute of limitations to initiate the lawsuit before the trial of the salary dispute. It is grounded that, when enforcing the statute of limitations according to Clause 2, Article 202 of the Labor Code in Viet Nam and Clause 2, Article 184 of the Civil Procedure Code, the preliminary ruling did not accept the plaintiff's claim. Therefore, the claim made in the appeal filed by the plaintiff’s representative is irrelevant. Thus, the salary paid during the plaintiff’s working period is calculated based on the statute of limitations from March 3, 2017 to March 3, 2018 is 12 months x VND 15,000,000 = VND 180,000,000. The plaintiff advanced the salary sum accrued during 07 months and the sum advanced in each month was 10,000,000 VND. So, the total is VND 70,000,000. So, the remaining salary the plaintiff would receive is VND 180,000,000 – VND 70,000,000 = VND 110,000,000.

2.2. Regarding the appeal against the plaintiff’s claim for the defendant’s payment of social insurance contribution at the rate of 17.5%:

According to the labor contract signed between two parties on August 1, 2015, they have an agreement on the payment of social insurance and health insurance contributions for the plaintiff. However, according to the provision of Article 2 in the 2014 Law on Social Insurance in Viet Nam (in force as of January 1, 2016), employees who are foreign nationals working in Vietnam and holding work permits or practicing certificates or licenses issued by Vietnamese competent authorities will be entitled to participate in the compulsory social security program in accordance with the Government's regulations in force.

Within the period from January 1, 2016 to earlier than October 15, 2018, the Government did not promulgate the Decree providing instructions about this regulation. The Government’s Decree No. 143/2018/ND-CP in Viet Nam dated October 15, 2018, elaborating on the implementation of the Law on Social Insurance and the Law on Occupational Safety and Hygiene regarding employees who are foreign nationals working in Vietnam (in force as of December 1, 2018).

However, on March 3, 2018, two parties terminated the labor relationship and, according to the above analysis, there is no grounds to accept the plaintiff's appeal request for compelling the defendant to pay social insurance contributions for the plaintiff for the period from August 1, 2015 to the expiration date of the work permit.

2.3. The defendant’s appeal and the protest of the Procuracy which establish that Company H did not unilaterally terminate the labor contract with the plaintiff Mr. G.J.P point out that:

According to the plaintiff's claim made in the appeal, during the course of working at the company, on March 3, 2018, the plaintiff was informed that the plaintiff was fired by the company and then the company did not allow the plaintiff to enter the workplace. The plaintiff did not receive any notice and decision on this from the company. Also that day, the plaintiff returned to China and then returned on March 6, 2018. The defendant reckoned that, though the plaintiff quit his job without being forced to do so, did not go to the company to work, the defendant did not issue any document to terminate the labor contract with the plaintiff.

Considering that the plaintiff claimed that, on March 3, 2018, he was fired by the company and not allowed to enter workplace, but the plaintiff did not provide any evidence to prove that the defendant terminated the labor contract with the plaintiff or the defendant prevented the plaintiff from working. On the other hand, as March 3, 2018 was also the date on which the plaintiff left for China, the claim that the plaintiff unilaterally terminated the labor contract illegally from March 3, 2018 is ungrounded, and the defendant's testimony about the plaintiff's voluntary resignation is relevant. When the defendant had not disciplined the plaintiff, the plaintiff filed a complaint against the defendant to the Sub-Department of Labor, Invalids and Social Affairs of city T.

The trial court’s ruling in which the plaintiff's petition to sue against the defendant for unlawful unilateral termination of the labor contract was accepted and it forced the defendant to pay compensation to the plaintiff is irrelevant. The defendant's appeal and the protest of the Chief Procurator of the People's Procuracy of city T against the preliminary ruling on this part are grounded and lawful.

[3] According to the aforesaid analysis, the court finds that it is grounded to accept the plaintiff's appeal; it is ungrounded to accept the defendant's appeal and the protest of the Chief Procurator of the People's Procuracy of city T; the Trial Panel decides to overturn a part of the preliminary ruling.

[4] In terms of court costs: Because the appeal is accepted, the defendant must pay appellate court costs according to the provisions of law. Due to the plaintiff’s enjoyment of exemption from court costs, his advance on court cost is repaid.

In light of the aforesaid arguments,

HEREBY DECIDES

Pursuant to Clause 2 of Article 148, Clause 2 of Article 308 and Article 309 in the Civil Procedures Code;

Pursuant to Clause 2, Article 29 in the Resolution No. 326/2016/UBTVQH14 dated December 30, 2016 of the National Assembly’s Standing Committee, stipulating amounts, reduction in amounts of, collection, payment, management and use of court costs and fees.

Making the following pronouncements:

I. Rejecting the plaintiff's claim made in the appeal.

II. Accepting the defendant’s appeal and the protest of the Chief Procurator of the People's Procuracy of city T; Modifying the preliminary labor ruling No. 01/2020/LD-ST dated May 28, 2020 of the People's Court of city T as follows:

1. Overturning a part of the petition to sue of the plaintiff, Mr. G.J.P, regarding "Dispute over the sum of salary, unilateral termination of labor contract, social insurance, health insurance and unemployment insurance contributions" against the defendant, Company H, which was accrued from August 1, 2015 to March 2, 2017.

2. Accepting a part of the petition to sue of the plaintiff, Mr. G.J.P, regarding "Dispute over the sum of salary” against Company H, which was accrued from March 2, 2017 to March 2, 2018.

Compelling Company H to be obliged to pay Mr. G.J.P the amount of VND 110,000,000 (One hundred and ten million Vietnamese dong).

3. Rejecting the petition to sue of the plaintiff, Mr. G.J.P, against Company H regarding "Dispute over salary, unilateral termination of labor contract, social insurance, health insurance, unemployment insurance, accommodation rent and severance pay”.

From the effective date of this judgment, if the obligee files a request for the court judgment execution and the obligor defers doing so, the sum of interest allowed according to Article 96 in the Labor Code in proportion to the amount and the period of deferral must be repaid.

In cases where the judgment is executed under the provisions of Article 2 in the Law on Civil Judgment Execution in Viet Nam, the obligee and obligor to execution of the judgment may negotiate about how the judgment is executed, the rights to request judgment execution, voluntary execution of the court judgement or shall be subject to law enforcement processes under Articles 6, 7 and 9 of the Law on Civil Judgment Execution. The limitation period for execution of the court judgement must be subject to regulations laid down in Article 30 in the Law on Civil Judgement Execution.

4. Regarding the trial court cost: Company H is liable for VND 3,300,000 (Three million and three hundred thousand Vietnamese dong).

III. Regarding the appellate court cost:

Litigants are exempted from paying this cost. The Subdepartment of Civil Judgment Execution of city T shall refund Mr. G.J.P the amount of VND 300,000 according to the receipt of advance payment of court cost and fee No. AA/2016/0050061 dated June 22, 2020, and reimburse Company H for VND 300,000 according to the receipt No. AA/2016/0050008 dated June 10, 2020.

The Appellate Judgement shall enter into force as from the pronouncement date./.