Judgement no. 862/2017/LD-ST dated july 12, 2017 on dispute over unilateral termination of labor contract

THE PEOPLE’S COURT OF HO CHI MINH CITY

JUDGEMENT NO. 862/2017/LD-ST DATED JULY 12, 2017 ON DISPUTE OVER UNILATERAL TERMINATION OF LABOR CONTRACT

On July 12, 2017, the first-instance trial court was conducted at the office of People’s Court of Ho Chi Minh City to hear the case No. 08/2016/TLST-LD dated November 30, 2016 on: “Dispute over unilateral termination of labor contract” based on the Decision to Bring the Case to Trial No. 1239/2017/QDST-LD dated June 16, 2017, and Decision to Suspend the Court Hearing No. 2635/2017/QD-ST dated July 3, 2017, between litigants:

- Petitioner:  Mrs. Viviane C - born in 1978.

Address: Apartment 4A-14.02 T.E, Street H, Ward A, District H, Ho Chi Minh City.

Authorized legal representatives of plaintiff:

1. Ms. Le Thi My Y - born in 1985 (present)

(based on the Power of Attorney with the notarization number 005986 of volume 01 TP/CC-SCC/HDGD dated May 24, 2017, in Private Notary Office B)

2. Mr. Do Hoang S - born in 1991 (absent)

(based on the Power of Attorney with the notarization number 4538 of volume 08 STC/CK, DC dated August 1, 2016, in Private Notary Office B)

3. Mr. Nguyen Thanh N - born in 1982 (absent) (based on the Power of Attorney with the notarization number 005585 of volume 09-SCT.DC dated September 16, 2016, in Private Notary Office B)

4. Mr. Chu Xuan B - born in 1992 (absent)

(based on the Power of Attorney with the notarization number 005960 of volume 03 TP/CC-SCC/HDGD dated March 30, 2017, in Private Notary Office M)

Co-address: Room 6 Floor 15 Building AB, No. 76A Street L, Ward B, District M, Ho Chi Minh City
The protector of legitimate rights and interests of the plaintiff:

1. Lawyer Nguyen Xuan Q, born in 1983, Law firm L, Ltd (absent)

2. Lawyer Le Minh P, born in 1980, Law Firm L, Ltd (absent).

- Respondent:  Law Firm H.L Ltd

Address: Room 2, Floor 40, Building B.F, No. 02 Street H, Ward B, District M, Ho Chi Minh City.

Authorized legal representative of respondent:

1. Mrs. Anh Hong N - born in 1981 (present)

Address: 433/1 Street N, Ward M, District S, Ho Chi Minh City.

2. Mrs. Nguyen Hue C - born in 1981 (present)

Address: 9.18 Apartment Building 326/1 Street U, Ward M, District B, Ho Chi Minh City.

Based on the Power of Attorney dated May 18, 2017 made by the Director.

- Persons with related interests and obligations: Company D.M and S.I.L

Address: Unit 2505-6 25/F, 333 L road, W.C, Hong Kong.

FINDING THAT

Representation of the legal representative Mrs. Le Thi My Y on behalf of plaintiff Mrs. Viviane C:

On September 16, 2014, Mrs. Viviane C was issued with a foreign lawyer practice certificate in Vietnam. In Vietnam, she had worked for Company D.M and S.I.L (hereinafter referred to as H Hong Kong) without any labor contract since May 1, 2014.

On February 11, 2015, Mrs. Viviane C notified the legal representative of Law Firm H.L Co., Ltd (hereinafter referred to as HL Vietnam) of her pregnancy. On July 3, 2015, Mrs. Viviane C notified HR Department of HL Vietnam of her pregnancy and officially submitted the notice of maternity leave on August 6, 2015, specifying that she would start her maternity leave from September 21, 2015; then, she returned to work full time in HL Vietnam from November 30, 2015.

At the end of June, 2015, HL Vietnam requested Mrs. Viviane C to sign a 1-year labor contract before her maternity leave to ensure her job position in Vietnam until the contract renewal. Although the two parties agreed upon a 1-year labor contract, HL Vietnam changed it to a 10-month labor contract which expires on April 30, 2016. The contract number was 11/HDLD/HL-2015 dated July 1, 2015. This was the sole labor contract between them. The plaintiff signed the contract on the ground that HL Vietnam promised to renew her contract later.

On February 16, 2016, Mrs Viviane C was orally notified of the termination of the labor contract; on February 18, 2016, she kept receiving a written notice of non-renewal of the contract with HL Hong Kong (through an email of HL Vietnam, sent by Mr. Bastien T who is the Asean Executive Lawyer of HL Group). Because Mrs. V signed both contracts in Vietnam and Hong Kong at the same time, the contract signed in Vietnam expires on the same date April 3, 2016 with the contract signed in Hong Kong.

The plaintiff has worked as a lawyer as a job doing on a regular basis. With this kind of job, while the Labor Code 2012 requires the respondent to sign a labor contract of 1 year or more with the plaintiff, the respondent, in fact, only signed a 10-month labor contract with the plaintiff. This is considered as a violation against regulations. Besides, laying off the plaintiff while she was rearing her child under 12 months of age is also deemed as a violation against regulations. Therefore, Mrs. Viviane C requires HL Vietnam to make a lump-sum restitution of VND 146,880,000 for the damage caused by the termination of the labor contract dated April 30, 2014 as quickly as possible when the judgment takes effect, including:

+ A restitution of 2 months’ salary for the non-performance of work (from April 30, 2016 to June 30, 2016) equivalent to VND 20,400,000;

+ A restitution of 12 months’ salary for the illegal termination of labor contract by HL Vietnam equivalent to VND 122,400,000.

+ A payment of 12 days’ salary for the leave which she has not used up under the labor contract No. 11/HDLD/HLG-2015 dated July 1, 2015 equivalent to VND 4,080,000.

Furthermore, the plaintiff withdraws the following request, not requiring further settlement:

+ Request the respondent to accept her return to work and make an additional restitution of 12 months’ salary and a severance pay of VND 127,500,000 if HL Vietnam refuses to accept her return to work.

+ A payment of annual fee payable to Quebec Bar Association incurred by Mrs. Viviane C from April 1, 2016 to June 30, 2016 (3 months) with the amount of VND 12,103,303 equivalent to CAD 710.92 and from July 1, 2016 to June 30, 2017 (12 months) with the amount of VND 48.413,381 equivalent to CAD 2,843.68.

+ A payment of health insurance in May, June 2016 of VND 1,224,000 and the severance pay of VND 3,876,000, totaling VND 5,100,000.

Representation of the respondent of Law Firm H.L through the legal representatives who are Mrs. Anh Hong N and Mrs. Nguyen Hue C:

On February 25, 2014, Mrs. Viviane C and Company D.M and S.I.L signed a 2-year labor contract from May 1, 2014 to April 30, 2016 (hereinafter referred to as Hong Kong contract) in order for Mrs. Viviane C to work for H.L Group worldwide, in specific: After-tax salary: HKD 38,500/month; working place: in companies of the Group worldwide, but mostly working in Ho Chi Minh City (Vietnam); occupational subsidy: the company will pay for annual lawyer fees at the Quebec Bar Association and other related occupational fees; the Hong Kong contract will be governed by the law of Hong Kong and under the jurisdiction of procedural authorities of Hong Kong.

On July 1, 2015, Law Firm H.L (a foreign law firm incorporated in Vietnam by H.L) and Mrs. Viviane C signed a 10-month labor contract from July 1, 2015 to April 30, 2016 (hereinafter referred to as Vietnam contract), in specific: Salary: VND 10,200,000 /month; working place: Ho Chi Minh City, Hanoi, Da Nang or another place upon request by the company; her job assignment is a lawyer; the working time is 8 hours per day, 5 days per week; rest periods and social insurance schemes: as prescribed by law of Vietnam.

For the period of time from July 1, 2015 to April 30, 2016, the Hong Kong contract still take effect simultaneously with the Vietnam contract. When entering into a labor contract in Vietnam, Mrs. C did not have any dissenting opinion against the contract duration.

In March 2015, Mrs. Viviane C notified the group leader of her pregnancy and they signed the Vietnam contract without any change to the Hong Kong contract. On August 20, 2015, Mrs. Viviane C took her maternity leave and then returned to work full time at Law Firm H.L on November 30, 2015. On February 18, 2016, the group leader notified Mrs. Viviane C in advance that April 30, 2016 would be the Hong Kong contract expiry and would not renew the labor contract. After receiving such a notice, Mrs. Viviane C did not give any opinion and the work transfer upon termination of contract still occurred normally (with her signature in the transfer note).

HL Vietnam terminated the Vietnam contract with Mrs. Viviane C due to the contract expiry and ensure any benefits of the plaintiff as prescribed by law (make contributions of health insurance until June 2016 and gave Mrs. Viviane C the insurance card, gave notice and completed procedures with social security agency of Ho Chi Minh City and the Ministry of Justice in terms of performance of foreign lawyers in the company), and did not unilaterally terminate the labor contract with the plaintiff. Therefore, the plaintiff did not accept the lawsuit filed against them. The company agrees to support the plaintiff additional 2 months’ salary of Vietnam contract from May 1, 2016 to June 30, 2016 of VND 20,400,000 and 12 days’ salary for the leave which she has not used up under the Vietnam contract equivalent to VND 4,080,000.

At the court hearing, litigants uphold their opinions and requests. The plaintiff's representative does not request the lawyer Le Minh P and lawyer Nguyen Xuan Q to attend the court hearing to protect the interests; and request the court to try in the absence of Mr. Nguyen Thanh N, Do Hoang S and Chu Xuan B.

Opinions of the representative of the People’s Procuracy of Ho Chi Minh City: During the lawsuit settlement process and at the today’s court hearing, presiding officers and procedural participants have complied with laws and regulations. The Trial Panel should suspend lawsuit requests that the plaintiff's legal representative withdrew under general regulations and refuse the lawsuit request of plaintiff as there is no ground regarding claims for a restitution for non-performance of work of 2 months’ salary and a restitution for illegal termination of labor contract because the two parties signed a 10-month labor contract on the voluntary basis and completely performed the labor contract, and the respondent confirmed that the termination of the labor contract was based on the expiry in accordance with Article 36 of the Labor Code 2012. Particularly the respondent’s assistance of VND 20,400,000 equivalent to 2 months’ salary, which is considered as an advantage, for the plaintiff, the Trial Panel should recognize it.

CONSIDERING THAT

After consideration of the case files assessed and the adversarial process at the court hearing, the Trial Panel judges as follows:

[1] With reference to jurisdiction:

Pursuant to Clause 1 Article 32, Point a Clause 1 Article 37, Point a Clause 4 Article 38 of the Civil Procedure Code 2015, the dispute between the litigants which is a dispute over unilateral termination of the labor contract involved by Company D.M and S.I.L located in Unit 2505-6 25/F, 333 L road, W.C, Hong Long falls under jurisdiction of the People’s Court of Ho Chi Minh City.

[2] In terms of court procedures:

- Authorization procedures: The plaintiff simultaneously authorizes 4 people who are Mr. Do Hoang S, Mrs. Le Thi My Y, Mr. Nguyen Thanh N and Mr. Chu Xuan B, in which Mrs. Y, Mr. S, Mr. N who are authorized to participate in legal proceedings and settle the entire case, and Mr. B is authorized to work with the court to participate in legal proceedings. During the lawsuit settlement, Mr. S and Mrs. Y have appeared in court to participate in legal proceedings, Mr. N and Mr. B have been absent; Mrs. Y explained that because they have jointly worked for Law Firm L located at 76B Street L, District M and Mr. S, N, B have been busy participating in other cases, they could not appear in court despite being summoned by the court; as authorized by the plaintiff, she requests the court to try in absence of the above-mentioned people; at the court hearing on July 3, 2017, the plaintiff’s legal representative was absent, the court suspended the court hearing in accordance with Clause 1 Article 227 of the Civil Procedure Code 2015 and kept summoning Mr. S, N and B to appear in court hearing at 7:30 on July 12, 2017; However, at today’s court hearing, Mr. S, N, B are still absent; it is considered as waiver of representation right as prescribed in Clause 2 Article 227 of the Civil Procedure Code 2015; the plaintiff only has Mrs. Y as the only legal representative appeared in court, therefore, the Trial Panel decides to try in the absence of the above-mentioned people. At the court hearing, Mrs. Y confirms not request a lawyer to participate in the court hearing to protect the plaintiff’s interests, therefore, the Trial Panel adjudicates the case under general regulations.

-  Procedural participants:  As represented by the plaintiff, the lawsuit filed by the plaintiff involves Company D.M and S.I.L located in Hong Kong, the case was referred to People’s Court of Ho Chi Minh City to settle under their jurisdiction; on June 9, 2017, the plaintiff withdrew lawsuit requests in conjunction with this Company, and agreed with the respondent not to bring this Company into the legal proceedings as a person with related rights and obligations in this case. Deeming that the plaintiff signed 2 labor contracts with two different juridical persons, in which the respondent Law Firm H.L is a company incorporated and operating under the law of Vietnam (based on the establishment license of foreign law firm No. 85/BTP/GP dated August 23, 2010 of the Ministry of Justice of the Socialist Republic of Vietnam - case file p.64). However, the labor contract signed between the plaintiff and Company D.M and S.I.L which is governed by the law of Hong Kong (case file p.61) does not fall under jurisdiction of the court of Vietnam. Therefore, the Trial Panel accepts the withdrawal of lawsuit request involving Company D.M and S.I.L and agreements made by the litigants not to bring this Company into the legal proceedings. However, pursuant to Article 471 of the Civil Procedure Code 2015, once a civil case or matter involving foreign elements was accepted to adjudicate by the court of Vietnam in accordance with the Civil Procedure Code, the case must be kept adjudicating regardless of the agreement made between the litigants as the new fact.

- Prescriptive period to file the lawsuit: The plaintiff quit the job on April 30, 2016 and filed a lawsuit petition against unilateral termination of labor contract on July 28, 2016, this lawsuit petition was filed within the prescriptive period as prescribed in Clause 2 Article 202.

[3] Regarding lawsuit request of the plaintiff:

- Considering the format aspect, the labor contract No. 11/HDLD/HLG-2015 concluded between the plaintiff Viviane C and Law Firm H.L dated July 1, 2015 is a labor contract made in writing, on the basis of the voluntary agreement between the contracting parties, not being forced or for the purpose of hiding other acts, as shown as below:  after signing the contract, the contracting parties both finished performing the contract, transferred the work upon completion of the contract on April 30, 2016 without a claim, objection, change, or opinion made by any party concerning the format and content of this contract, this is one of matters mutually agreed by the litigants at the court hearing.

Regarding entities, the labor contract No. 11/HDLD/HLG-2015 dated July 1, 2015 was concluded between the plaintiff Mrs. Viviane C and Law Firm H.L in which, Mr. Jean-Francois  H who is the Director cum legal representative of the respondent and Mrs. Viviane C are both lawyers, having full legal capacity to enter into and perform the contract.

Regarding the contents, the labor contract No. 11/HDLD/HLG-2015 dated July 1, 2015 indicating adequate required contents of a labor contract in accordance with Article 23 of the Labor Code 2012; regarding the performance of contract: based on the statements of the litigants and items of evidence in the case file, after signing the contract, both parties have performed the contract until its completion on April 30, 2016 as stated above.

Regarding duration of contract: the labor contract No. 11/HDLD/HLG-2015 dated July 1, 2015 concluded between the plaintiff Mrs. Viviane C and Law Firm H.L with the 10-month duration from July 1, 2015 to April 30, 2016. Pursuant to Clause 3, Article 22 of the Labor Code 2012, it is prohibited to enter into a seasonal or work-specific labor contract of under 12 months for a regular job which has a duration of more than 12 months. The purpose of this regulation is to protect the legitimate interests of employers, but there is no provision compelling an employee not to have a right to waive his/her rights; in this case, Mrs. Viviane C herself is a lawyer, she was issued with a lawyer practicing certificate in Vietnam in accordance with regulations made on September 16, 2014. So, she surely had ability, awareness to know the said regulation and should have signed a labor contract with a duration of at least 12 months; on the other hand, as represented by the plaintiff’s representative at the court hearing, at first the respondent intended to conclude a 12-month contract with the plaintiff but changed to a 10-month contract then; however, Mrs. Vivance, despite clearly knowing this matter, still agreed to conclude the contract; moreover, she even performed the labor contract with the respondent without any objection, complaint. This is considered as a waiver of her rights. Therefore, there is no ground for determining that the 10-month labor contract between the respondent and the plaintiff was made illegally.

During the lawsuit settlement process and at the court hearing, the respondent determines that the termination of labor contract with the plaintiff was due to the expiry of the contract, this is one of the apparent grounds for termination of labor contracts in accordance with Clause 1f Article 36 of the Labor Code 2012. Pursuant to Clause 1 Article 47 of the Labor Code 2012, at least 15 days before the date of expiry of a definite-term labor contract, the employer shall give a written notice of the time of termination of the contract to the employee concerned. According to representations of the litigants and evidence of the case file, on February 18, 2016, the respondent notified the plaintiff in advance that the labor contract would not be renewed and would expire on April 30, 2016, the plaintiff, however, did not give any opinion; therefore, upon the termination of the labor contract due to expiry, the respondent fulfilled the obligation to give advanced notice of termination of labor contract within 2 months 10 days, almost 2 months sooner than the regulation, which is deemed as an advantage for the plaintiff.

The Trial Panel considers that: The labor contract No. 11/HDLD/HLG-2015 dated July 1, 2015 concluded between the plaintiff Mrs. Viviane C and Law Firm H.L is an effective and legal contract, in accordance with laws and regulations as stated above. The respondent has a valid ground for terminating the labor contract with the plaintiff due to expiry, giving notice in advance as prescribed and not unilaterally terminating the labor contract illegally, and the plaintiff has no reasonable ground for determining that the respondent illegally terminated the labor contract while the plaintiff was raising her child under 12 months of age. Considering that the ground for determining that the respondent illegally terminated the labor is not valid and, as prescribed in Article 41 of the Labor Code 2012, only cases of termination of labor contract not in accordance with Article 37, Article 38, Article 39 of the Labor Code 2012 are illegal unilateral termination of labor contract. Therefore, there is no basis for accepting the lawsuit request of the plaintiff concerning the claim for a restitution of non-performance of work equivalent to VND 122,400,000, a restitution of 2 months’ salary due to illegal unilateral termination of labor contract as proposed by the representative of the People’s Procuracy of Ho Chi Minh City at the court hearing.

Regarding the claim for annual leave which she has not used up equivalent to VND 4,080,000, as confirmed before, the respondent must make the payment of such annual leave to the plaintiff as prescribed and as agreed in the labor contract dated July 1, 2015. The lawsuit request which was voluntarily and illegally withdrawn should be accepted as per the law.

[4] Regarding first instance labor court fee: a part of the plaintiff’s request is not accepted but she has not to pay a first instance labor court fee. The respondent has to pay a first instance labor court fee calculated according to the amount payable to the plaintiff of VND 4,080,000 as per the law.

[5] Regarding the right to appeal: The litigants have right to appeal the Judgment as prescribed.

Based on the above-mentioned facts and matters,

HEREBY DECIDES

- Pursuant to Clause 1 Article 32, Point a Clause 1 Article 37, Point a Clause 4 Article 38 Article 147, Clause 2 Article 227, Article 271, Article 273, Article 471 of the Civil Procedure Code 2015;

- Pursuant to Clause 22 Article 25, Clause 1 Article 36, Article 41, Clause 1 Article 47, Clause 3 Article 155, Article 201, Clause 2 Article 202 of the Labor Code 2012;

- Pursuant to Article 357, Article 468 of the Civil Code 2015;

- Pursuant to the Law on Civil Enforcement;

- Pursuant to Ordinance on Court Fees and Charges 2009.

1. Accept a part of the lawsuit petition of the plaintiff.

Force the respondent Law Firm H.L to pay the plaintiff Mrs. Viviane C 12 days’ salary for the annual leave which she has not used up under the labor contract No. 11/HDLD/HLG-2015 dated July 1, 2015 equivalent to VND 4,080,000.

Recognize the voluntariness of Law Firm H.L to support Mrs. Viviane C an amount of VND 20,400,000, equivalent to 2 months’ salary under the labor contract No. 11/HDLD/HLG-2015 dated July 1, 2015.

From the date on which the plaintiff filed a request for judgment enforcement, if the respondent has not enforced the judgment, the respondent must pay the plaintiff an interest according to the interest rate in accordance with Article 468 of the Civil Code 2015, in specific, the respondent has to pay an interest on the late payment. The interest rate accruing due to late payment shall be determined according to the agreement between both parties but not exceeding 20% per year of the debt; if they have no agreement, the interest rate is 10% per year based on the debt in arrear at the repayment time.

The Judgment shall be enforced promptly after the it takes effect, under the supervision of the competent civil enforcement agency.

2. Do not accept the lawsuit request of Mrs. Viviane C claiming Law Firm H.L for a restitution of 2 months’ salary due to illegal unilateral termination of labor contract of VND 20,400,000 and a restitution of 12 months’ salary of VND 122,400,00 due to illegal unilateral termination of labor contract.

3. Suspend the following lawsuit requests of Mrs. Viviane C:

+ Request Law Firm H.L to accept her return to work and make an additional restitution of 12 months’ salary and a severance pay of VND 127,500,000 if HL Vietnam refuses to accept her return to work.

+ Request Law Firm H.L to pay the annual fee payable to Quebec Bar Association incurred by Mrs. Viviane C from April 1, 2016 to June 30, 2016 (3 months) with the amount of VND 12,103,303 equivalent to CAD 710.92 and from July 1, 2016 to June 30, 2017 (12 months) with the amount of VND 48.413,381 equivalent to CAD 2,843.68.

+ Request Law Firm H.L to make a payment of health insurance in May, June 2016 of VND 1,224,000 and the severance pay of VND 3,876,000, totaling VND 5,100,000.

4. First instance labor court fee: the plaintiff has not to pay the first instance labor court fee and the respondent has to pay VND 200,000 of first instance labor court fee.

5. Litigants may rightfully appeal this judgment within 15 days from the judgment announcement.

In case the judgment or court decision is enforced as per regulations in Article 2 of the Law on enforcements of civil judgments, the judgment creditor and judgment debtor are lawfully allowed to reach an agreement on judgment enforcement, request judgment enforcement, be subject to voluntary execution or coercive judgment enforcement in compliance with regulations in Article 6, 7 and 9 of the Law on enforcement of civil judgments, and the effective period of judgment enforcement shall comply within provisions in Article 30 of the Law on enforcement of civil judgments./.