Judgment no. 04/2017/LD-PT dated november 30, 2017 on dispute over unilateral termination of labour contract

THE PEOPLE’S COURT OF HAI PHONG CITY

JUDGMENT NO. 04/2017/LD-PT DATED NOVEMBER 30, 2017 ON DISPUTE OVER UNILATERAL TERMINATION OF LABOUR CONTRACT

Because the first-instance judgment No. 02/2017/LD-ST dated June 27, 2017 on labour dispute pronounced by the People’s Court of Ngo Quyen District, Hai Phong City was appealed, on November 30, 2017, the appellate trial was conducted at the courtroom of the People's Court of Hai Phong City to hear in the public the handled case No. 05/2017/TLPT-LD dated August 09, 2017 on dispute over unilateral termination of labour contract according to the Decision to bring the case to the appellate trial No. 735/2017/QD-PT dated August 31, 2017, the Decision on trial delay No. 795/2017/QD-PT dated September 19, 2017, the Decision on trial delay No. 820/2017/QD-PT dated September 27, 2017 and the Notice of resumption of the trial No. 954/TB-TA dated October 27, 2017, and the Notice of change of scheduled court date dated November 20, 2017, between the following litigants:  

- Plaintiff:  Mr. Dang Vu T; residence:  No. 8/40, A street, B ward, C district, Hai Phong City; absent.

Person defending legitimate rights and interests of the plaintiff:  Mr. Bui Quoc T, Lawyer of N Law Office that is a member of Hai Phong City Bar Association (refused to defending legitimate rights and interests of Mr. Dang Vu T).

- Defendant: C Co., Ltd.; headquarters:  C street, E ward, C district, Hai Phong City.

Legal representative of the defendant:  Mr. Ta Van N, position:  Deputy General Director of C company, who is the authorized representative (according to the power of attorney dated November 11, 2016 of the General Director of C Company); present.

Person defending legitimate rights and interests of the defendant:  Mr. Nguyen Thanh D, Lawyer of Hoi An Law Office that is a member of Hai Phong City Bar Association; present.

- Entity having duties and interests from the lawsuit:  C Corporation; headquarters: No. 172, Ngoc Khanh Street, Ba Dinh District, Hanoi City.

Legal representative of the entity having duties and interests from the lawsuit: Mrs. Tran Thi Ph, position:  Deputy Head of Organization, Personnel and Training Department, acting as the authorized representative (according to the power of attorney dated November 22, 2017 of General Director of C Corporation – SBIC); present.

- Appellant:  C Co., Ltd., also the defendant.

- The procuracy filing appeal:  Director of the People’s Procuracy of Hai Phong City.

CONTENTS OF THE CASE

According to the petition dated May 05, 2016 and statements of the plaintiff, Mr. Dang Vu T stated:

C Vietnam Corporation (Vinashin), currently Shipbuilding Industry Corporation (SBIC), is a party of the Joint Venture Agreement dated May 05, 1995 on establishment of Shell Gas Hai Phong Co., Ltd. (currently, C Co., Ltd.).

On October 24, 2005, Vinashin issued a Decision No. 1924/CNT/TCCB-LD on appointment of Mr. Dang Vu T to the Board of Directors of Shell Gas Hai Phong Co., Ltd. for managing Vinashin’s stake in this company.  On the same day, October 24, 2005, Shell Gas Hai Phong Co., Ltd. made a written approval that Mr. Toan will be the new Deputy General Director of the joint venture, and will work in the capacity of a member of Shell Gas Hai Phong Co., Ltd. from October 24, 2005.

On April 10, 2006, Shell Gas Hai Phong Co., Ltd. entered into an indefinite-term labour contract No. SHG/2006/71 with Mr. Dang Vu T, which indicates his professional title as Deputy General Director and salary as VND 21,200,000/ month. Additionally, this labour contract also includes provisions on the responsibility of Shell Gas Hai Phong Co., Ltd. to pay social insurance and health insurance premiums, bonus, time of rest, leave and other benefits of Mr. Toan.  

During the employment at Shell Gas Hai Phong Co., Ltd., Mr. Toan received neither salary nor any benefits from Vinashin.  Salary and other benefits of Mr. Toan were paid by Shell Gas Hai Phong Co., Ltd. according to terms and provisions laid down in the labour contract No. SGH/2006/71. According to payrolls from January 2014 to January 2015 of Shell Gas Hai Phong Co., Ltd., the salary enjoyed by Mr. Toan is VND 35,510,000/ month. After deduction of compulsory amounts of social insurance and health insurance premiums, the remaining salary actually received by Mr. Toan is VND 31,565,749.

On December 25, 2014, SBIC issued a Decision No. 1089/QD-CNT on termination of appointment of Mr. Dang Vu T as a representative managing its stake in Shell Gas Hai Phong Citygas Co., Ltd.

On December 26, 2014, SIBC provided Shell Gas Hai Phong Co., Ltd. with a Document No. 3600/CNT-TCNS on change of representative of its stake in Shell Gas Hai Phong Co., Ltd..

Based on the above-mentioned document of SBIC, on December 31, 2014, the Board of Directors of Shell Gas Hai Phong Co., Ltd. passed a resolution on personnel matters, approving the dismissal of Mr. Toan from the Board of Directors and the position of Deputy General Director of Shell Gas Hai Phong Co., Ltd. from December 31, 2014.  

On January 23, 2015, Shell Gas Hai Phong Co., Ltd. issued an Official Dispatch No. 05-2014/CV requesting Mr. Toan to hand over his duties and deliver assets under his management during his employment at Shell Gas Hai Phong Co., Ltd. by January 31, 2015. Shell Gas Hai Phong Co., Ltd. had immediately taken back all working tools and equipment of Mr. Toan such as termination of phone agreement and blocking of his Mai Linh Taxi card, and appointed Mr. Ta Van N to use the office of Mr. Toan as a new representative of SIBC. At the same time, Shell Gas Hai Phong Co., Ltd. declared and calculated salary and other allowances for Mr. Toan up to January 31, 2015.  

Mr. Toan believed that the fact the Company did not assign works to him, did not pay salary, bonus and social insurance premiums, and prevented him from entering the Company by means of the Official Dispatch No. 05-2015/CV dated Janaury 23, 2015 regarding "handover of duties" as of January 31, 2015 is considered to unilaterally terminate the labour contract signed with him before its expiry.  The company has committed violations against the Labour Code because it failed to give him a prior notice before terminating the labour contract as regulated.

Then, Mr. Toan had made complaints about his labour contract improperly terminated by the Company many times, and requested the Company to continue performing the signed labour contract as well as pay salary and other benefits to him but the Company had refused his request.

On January 24, 2016, Mr. Toan submitted another written request to Shell Gas Hai Phong Co., Ltd. requesting this Company to continue performing the signed labour contract and pay salary, social insurance premiums, bonus and unused annual leave days in 2014 and 2015. According to the Official Dispatch No. 58/CTGN-BC dated February 02, 2016, the Company only agreed to pay unused annual leave days in 2014 to Mr. Toan.

Because of disagreeing with the Company’s response, on May 09, 2016, Mr. Toan filed a lawsuit against Shell Gas Hai Phong Co., Ltd. over unilateral termination of the labour contract signed with him inconsistently with applicable law, including the following requests:

1. Allow Mr. Dang Vu T to continue his employment according to the signed labour contract.

2. Make payment of the following amounts:

- Salary for the period in which is banned from working:  VND 532,650,000;

- Social insurance and health insurance premiums payable by the Company for the period from February 2015 to May 2016:  VND 89,700,000;

- Unused annual leave days in 2014 and 2015: VND 48,422,727;

- 13th-month salary in 2015: VND 35,510,000;

- Unpaid bonus in 2014: VND 136,000,000;

- Salary of 02 months as agreed upon in the labour contract:  VND 71,020,000;

- Salary compensation due to breach of prior notification period as 41 days = VND 66,177,723;

- Interest (calculated by adopting the bank’s deposit interest rate as 9% per year) on late payment of salaries: VND 27,964,125; late payment of insurance premiums: VND 4,709,250; late payment of bonus in 2014: VND 12,240,000 and late payment on unused annual leave days in 2014: VND 181,585; Total amount payable by Shell Gas Hai Phong Co., Ltd. as requested by Mr. Toan: VND 1,024,575,410.

During the procedural process, the legal representative of C Company stated:

The conclusion of the labour contract No. SHG/2006/71 dated October 24, 2006 between Mr. Toan and Shell Gas Hai Phong Co., Ltd. is not consistent with Article 12 of the Law on foreign investment in Vietnam in 1996, Clause 2 Article 2 of the Government’s Decree No. 44/2003/ND-CP dated May 09, 2003 and Article 10 of the Company’s Charter signed on May 05, 1995; because Mr. Toan holds the position of Deputy General Director and member of the Board of Directors, the conclusion of labour contract with him is not required.  Shell Gas Hai Phong Co., Ltd. did not make document or decision on termination of labour contract signed with Mr. Toan, so the Company neither unilaterally terminated the labour contract nor violated the regulation on time limit for prior notification of termination of labour contract.   Dismissal of Mr. Toan from the Board of Directors and the position of Deputy General Director by Shell Gas Hai Phong Co., Ltd. was made on the basis of the Decision No. 1089/QD-CNT dated December 25, 2014 and Document No. 3600/CNT-TCNS dated December 26, 2014 of SBIC, and absolutely conformable with Article 7 and Article 10 of the Company’s Charter.

In response to Mr. Toan’s request, Shell Gas Hai Phong Co., Ltd. only agreed to pay his unused annual leave days in 2014 with an amount:  (VND 35,510,000 /22 days) x 17 days = VND 27,439,545. The Company also requested Mr. Dang Vu T to return laptop and mobile phone to the Company. If Mr. Toan failed to return these things, the Company shall deduct their value from the amount to be paid to Mr. Toan as regulated.

Shell Gas Hai Phong Co., Ltd. refused other requests of Mr. Toan.

During the procedural process, the legal representative of Vinashin stated:

On October 20, 2005, Vinashin and Mr. Dang Vu T entered into the labour contract No. 50/HDLD dated October 20, 2005 (with the term of 04 years as of October 20, 2005) and then this labour contract is changed into an indefinite-term labour contract.  Until October 24, 2005, Vinashin issued a Decision to appoint Mr. Toan to the Board of Directors of Shell Gas Hai Phong Co., Ltd. for managing Vinashin’s stake in this company.  On the same day, October 24, 2005, Shell Gas Hai Phong Co., Ltd. made a written approval on request of Vinashin for appointment of Mr. Toan to the position of Deputy General Director.

SIBC was not informed of the conclusion of labour contract between Mr. Toan and C Company.  When acting as the representative of SBIC’s stake in Citygas, Mr. Toan received salary and other benefits from Citygas as agreed.  After SBIC terminated the appointment of Mr. Toan as the representative of SBIC’s stake at Citygas, salary and benefits of Mr. Toan were paid by SBIC.

On November 03, 2016, SBIC issued a decision on termination of labour contract signed with Mr. Toan, and SBIC agreed to pay redundancy compensation and other benefits to Mr. Toan.  However, until now SBIC has not made  payment to Mr. Toan.

At the first-instance trial, the plaintiff has withdrawn a part of his request for social insurance and health insurance premiums, bonus in 2014 and interest on late payments; total amount is VND 270,794,960.

According to the first-instance judgment No. 02/2017/LD-ST dated June 27, 2017 of the People’s Court of Ngo Quyen District, the court decided:

1. To accept the petition of Mr. Dang Vu T.

C Co., Ltd. is forced to continue performing the labour contract signed with Mr. Dang Vu T.

C Co., Ltd. must pay the compensation of VND 1,107,670,864 to Mr. Dang Vu T.

2. To delay the resolution of Mr. Toan’s request for an amount of VND 270,794,960, including social insurance and health insurance premiums, bonus in 2014 and interest on late payment.

Additionally, the first-instance judgment also includes decisions on the court fees and the rights to appeal against the judgment of the litigants.

After the first-instance trial, on June 29, 2017, C Co., Ltd. appealed against the entire first-instance judgment on the following basis:

Mr. Toan is an employee of SBIC and is appointed to act as a member of the Board of Directors and Deputy General Director of the joint venture (C Co., Ltd.).  According to the Official Dispatch No. 284/TTrSLDTBXH Hai Phong dated December 29, 2015 of Department of Labour, War Invalids and Social Affairs of Hai Phong City on response to Mr. Toan complaint against the Company:  The labour contract signed between C Co., Ltd. and Mr. Toan does not establish the labour relation because the labour contract was signed inconsistently with applicable laws and the Company's Charter.  The signed labour contract does not specify specific job duties, C Co., Ltd. paid salary and other benefits to Mr. Toan according to Regulations on financial management of state-owned companies.

C Co., Ltd. issued the Notice No. 05/2015/CV dated January 23, 2015 according to the Decision on change of representative of capital of SBIC but Mr. Toan thought that the Company unilaterally terminated the labour contract signed with him, and so he complained to the Company.  The Company issued the Decision No. 28/QD-CTGN dated July 14, 2015 on settlement of Mr. Toan’s complaint. Because Mr. Toan did not make the second complaint, this Decision was effective.  Clause 1 Article 33 of the Government's Decree No. 119/2014/ND-CP dated December 17, 2014 stipulates “the decision on settlement of the first complaint shall take legal effect if after 30 days from the date of issue of such decision, the complainant neither makes the second complaint nor initiate a lawsuit at the Court as regulated in Point a Clause 2 Article 10 of this Decree”.  

On May 05, 2016, Mr. Toan filed a lawsuit to the Court and the fact that the People’s Court of Ngo Quyen District accepted and handled the case is not true because all issues have been settled by an effective decision, the persons concerned are not entitled to initiate a lawsuit as regulated in Point a Clause 2 Article 10 of Decree No. 119/2014/ND-CP in Viet Nam.

The Company requested the appellate court to review all contents of the first-instance judgment and not to accept the plaintiff’s petition.

On July 26, 2017, the People's Procuracy of Hai Phong City appealed and believed that the first-instance court has made mistakes in examining evidences resulting in improper application of law regulations.

The first-instance judgment indicates that Mr. Toan entered into the labour contract before he was appointed to manage the Corporation's stake in the Company. The first-instance judgment does not reveal equitable and comprehensive truths of the case because of the following reasons:

Mr. Toan has worked at Shell Gas Hai Phong Co., Ltd. in the capacity of Deputy General Director and member of the Board of Directors, representing the capital contributed by Vinashin to this Company from October 24, 2005 but until April 10, 2006, Mr. Toan and Shell Gas Hai Phong Co., Ltd. concluded the labour contract.  The content of the first-instance judgment that “when the labour contract is signed on April 10, 2006 between Citygas and Mr. Toan, according to the document dated October 24, 2005 of Citygas, Mr. Toan is not a member of the Board of Directors of Citygas because until November 07, 2007, Vinashin issued the document No. 3554 to appoint Mr. Toan to attend the Board of Directors of Citygas for replacing Mr. Nguyen Quoc Anh” is not true.  

The conclusion of the labour contract No. SGH/2006/71 dated April 10, 2006 is not conformable with Article 12 of the Law on foreign investment in Vietnam in 1996, Clause 2 Article 2 of the Government’s Decree No. 44/2003/ND-CP in Viet Nam dated May 09, 2003 and Article 10 of the Charter of Citygas:

According to the joint venture agreement dated May 05, 1995 on establishment of Shell Gas Hai Phong Co., Ltd.,  "General Director and Deputy General Director shall be appointed by the Board of Directors in accordance with the law of Vietnam".

On October 24, 2005, Vinashin decided to appoint Mr. Toan to the Board of Directors of Shell Gas Hai Phong Co., Ltd., and Shell Gas Hai Phong Co., Ltd also sent an Official Dispatch to Vinashin on the same day, including the following content:  “….After interviewing Mr. Dang Vu T, a candidate for the position of Deputy General Director of Shell Gas Hai Phong Co., Ltd. as appointed by Vinashin, Shell Gas Hai Phong Co., Ltd. accepts Vinashin’s appointment”.

Because Mr. Toan holds the position of Deputy General Director and member of the Board of Directors, the conclusion of labour contract with Mr. Toan is not required.

Regarding dismissal of Mr. Dang Vu T from the position of Deputy General Director:

Clause 7.5 Article 7 of the Charter of Shell Gas Hai Phong Co., Ltd. stipulates:  “The party of the joint venture is entitled to discharge and dismiss the individual that it appointed to the Board of Directors, and entitled to replace her/him by another”.  Article 10 of the Charter of Shell Gas Hai Phong Co., Ltd. stipulates:  “…..Deputy General Director shall be appointed for a fixed period determined by the Board of Directors and may be dismissed by the Board of Directors at any time by a written resolution”.

The dismissal of Mr. Toan from the position of Deputy General Director by the Board of Members of Shell Gas Hai Phong Co., Ltd. according to the Decision No. 1089/QD-CNT dated December 25, 2014 and Document No. 3600/CNT-TCNS dated December 26, 2014 of SBIC is conformable with Article 7 and Article 10 of the Company’s Charter.

Thus, the fact the first-instance court judged that C Company has unilaterally terminated the labour contract inconsistently with the law and requested the Company to make compensation for Mr. Toan is not unreasonable. The first-instance court should not accept the petition of the plaintiff.  

At the appellate trial, the plaintiff requested for trial delay. Deeming that the plaintiff is not the appellant, the trial has been delayed two times.  Pursuant to Article 296 of the Civil Procedure Code, the Trial panel decides to hear the case in absence of the plaintiff.  Because the plaintiff is absent from the trial, the person defending legitimate rights and interests of the plaintiff also refuses to defend legitimate rights and interests of the plaintiff.

The defendant keeps its appeal unchanged and refuses to reach an agreement on handling of the case with the plaintiff. The procuracy also keeps its appeal unchanged.

Legal representative and person defending legitimate rights and interests of C Co., Ltd. stated:

In implementation of the agreement between C Vietnam Corporation and Shell Gas Hai Phong Co., Ltd. (two parties of the joint venture on establishment of Shell Gas Hai Phong Co., Ltd.), at the meeting held on October 14, 2005 and October 24, 2005, C Vietnam Corporation issued a Decision No. 1924/CNT/TCCB-LD on appointment of Mr. Dang Vu T to the Board of Directors of Shell Gas Hai Phong Co., Ltd. to manage the Corporation’s stake at this company.

On October 24, 2005, Chairperson of the Board of Directors of Shell Gas Hai Phong Co., Ltd. issued a notice of appointment of Mr. Dang Vu T, a candidate for the position of Deputy General Director of Shell Gas Hai Phong Co., Ltd. as recommended by Vinashin, as Deputy General Director of Shell Gas Hai Phong Co., Ltd. (this notice was also sent to Vinashin).

On October 24, 2005, General Director of Shell Gas Hai Phong Co., Ltd. issued a notification that:  According to the Decision No. 1924 of SBIC, Mr. Toan will officially take up the appointment as Deputy General Director of Shell Gas Hai Phong Co., Ltd. as from October 24, 2005. Mr. Dang Vu T has officially worked at Shell Gas Hai Phong Co., Ltd. from October 24, 2005. Specific job duties of Mr. Dang Vu T will be assigned by General Director and the Board of Directors of Shell Gas Hai Phong Co., Ltd.

Regarding reports submitted by Mr. Dang Vu T to Vinashin:  According to Vinashin’s decision and the notice of Shell Gas Hai Phong Co., Ltd., Mr. Dang Vu T submitted reports to Vinashin according to the relationship established between Vinashin and Mr. Dang Vu T, Shell Gas Hai Phong Co., Ltd. is not entitled to make intervention.  At the same time, Mr. Toan did not provide Shell Gas Hai Phong Co., Ltd. with reports submitted to Vinashin for retention.

After General Director of Shell Gas Hai Phong Co., Ltd. entered into the labour contract No. SGH/2006/71 with Mr. Dang Vu T, Shell Gas Hai Phong Co., Ltd. did not notify Vinashin of such labour contract.

On November 07, 2007, Vinashin issued a Decision No. 3554/QD-CNT-TCCB-LD, indicating that:  “Mr. Dang Vu T - the first Deputy General Director of Shell Gas Hai Phong Co., Ltd. (formerly, a specialist of Department of Business & External Affairs of Vinashin) is appointed to manage Vinashin’s stake at Shell Gas Hai Phong Co., Ltd. and as member of the Board of Directors of Shell Gas Hai Phong Co., Ltd. as a replacement for Mr. Nguyen Quoc Anh”.

According to the Document No. 3117/CNT-TCNS dated November 20, 2015 of Vinashin, Vinashin asserted that:  “Since Mr. Toan is dismissed from the position of SBIC’s representative (according to the Decision No. 1089/QD-CNT dated December 25, 2014 of the Corporation on change of representative of SBIC’s stake at C Co., Ltd.), the Corporation takes charge of arranging and assigning new duties to Mr. Toan under the agreement made between the Corporation and Mr. Dang Vu T.”

Mr. Dang Vu T has rights, benefits and obligations towards Vinashin according to Vinashin’s regulations and relevant laws.

Vinashin has been informed of the payment of salary by Shell Gas Hai Phong Co., Ltd. to Mr. Dang Vu T at the document dated October 24, 2005 sent by the Chairperson of the Board of Directors of Shell Gas Hai Phong Co., Ltd. to Vinashin.

The recognition of the validity of the labour contract No. SGH/2006/71 signed on April 10, 2006 by the first-instance court is contrary to the Official Dispatch No. 284/TTrSLDTBXH dated December 29, 2015 on response to the complaint of Mr. Dang Vu T against C Co., Ltd. over its unilateral termination of labour contract, which indicates that this labour contract does not establish any labour relationship between the parties because it is concluded inconsistently with applicable laws and the Company’s Charter.

After the first-instance trial, according to the petition dated October 26, 2017, Mr. Dang Vu T stated:  Mr. Toan worked as Deputy General Director of Shell Gas Hai Phong Co., Ltd. from November 11, 2005 and concluded the labour contract No. SGH/2006/71 with Shell Gas Hai Phong Co., Ltd. as of April 10, 2006. According to this labour contract, salary of Mr. Toan is paid under agreements with Shell Gas Hai Phong Co., Ltd..  On January 26, 2006, the Board of Directors of Shell Gas Hai Phong Co., Ltd. issued the Resolution on the list of members of the Board of Directors, including 8 members, and the list of holders of executive positions, including 03 persons, in which Mr. Toan is listed as Deputy General Director.  Until November 07, 2007, Vinashin made a document appointing Mr. Toan to the Board of Directors of Shell Gas Hai Phong Co., Ltd. as a replacement for Mr. Nguyen Quoc Anh, and Mr. Toan accepted this appointment which was also approved by the Board of Directors of Shell Gas Hai Phong Co., Ltd..

Thus, from November 11, 2005 to November 07, 2007, Mr. Toan has been not a member of the Board of Directors of Shell Gas Hai Phong Co., Ltd.. When concluding the labour contract with Shell Gas Hai Phong Co., Ltd., Mr. Toan was Deputy General Director of Shell Gas Hai Phong Co., Ltd. and not a member of the Board of Directors as concluded by the Procuracy. The labour contract No. SGH/2006/71 dated April 10, 2006 includes no provisions on duties, remuneration, income or obligations of a member of the Board of Directors.  Both Law on foreign investment in Vietnam and the Company’s Charter only govern the relationship between investors or shareholders contributing capital and not govern the relationship between the employee and the employer.

Mr. Toan is an employee appointed by Vinashin to manage its stake at Shell Gas Hai Phong Co., Ltd. The conclusion of an indefinite-term labour contract between Shell Gas Hai Phong Co., Ltd. and him is absolutely conformable with applicable laws.  He only entered into the labour contract to take the position of Deputy General Director. He did not enter into the labour contract to undertake the position of a member of the Board of Directors. And at the time of concluding the labour contract, on April 10, 2005, he did not yet join the Board of Directors of Shell Gas Hai Phong Co., Ltd..  For these reasons, the recognition of validity of this labour contract by the first-instance court is reasonable.

The legal representative of SIBC stated:

Mr. Toan is an employee of SIBC, and is appointed to manage SIBC’s stake at reasonable. Thus, the conclusion of labour contract between Mr. Toan and Shell Gas Hai Phong Co., Ltd. is illegitimate and infringes the Company’s Charter.  The labour contract signed between Mr. Toan and Shell Gas Hai Phong Co., Ltd. is not legally effective.  C Company has fully paid salary, bonus and other benefits to Mr. Toan in accordance with laws.  On January 23, 2015, C Company requested Mr. Toan to hand over his duties undertaken at C Company, this request was made according to the Decision No. 1089/QD-CNT dated December 24, 2014 and Document No. 3600/CNT-TCNS dated December 26, 2014 of SBIC. Thus, the petition filed by Mr. Toan against Citygas over the unilateral termination of labour contract was completely unfounded.

The representative of the People’s Procuracy of Hai Phong City expresses the opinions about the case as follows:  The Judge and the Trial panel have strictly complied with regulations laid down in the Civil Procedure Code; the litigants have properly exercised and performed their rights and obligations, and attended the trial in accordance with regulations laid down in the Civil Procedure Code.

Regarding the appeals made by the defendant and the Procuracy:  Pursuant to Clause 2 Article 308 of the Civil Procedure Code, the appellate court is requested to accept the appeals made by the defendant and the Director of the People’s Procuracy of Hai Phong City, and alter the first-instance judgment by refusing the petition of the plaintiff.

JUDGMENTS OF THE COURT 

After investigating documents in the case file, which have been verified at the trial, and based on the arguments at the trial, the Trial panel finds that: 

[1] Regarding disputed legal relationship:  The fact that the People’s Court of Ngo Quyen District determined that this is a dispute over the unilateral termination of labour contract, and handled the case is conformable with Clause 1 Article 32 of the Civil Procedure Code in Viet Nam.

[2] Regarding reasons for appeals made by the defendant and the Director of the People’s Procuracy of Hai Phong City:

2.1. Regarding the appeal filed by the defendant that believed that the People’s Court of Ngo Quyen District has improperly handled the case because according to Clause 1 Article 33 of Decree No. 119/2014/ND-CP dated December 17, 2014, the complaint of Mr. Toan over the unilateral termination of labour contract has been settled by C Co., Ltd. through the effective Decision No. 28/QD-CTGN dated July 14, 2015;  Point a Clause 1 Article 33 of the Government's Decree No. 119/2014/ND-CP dated December 17, 2014 stipulates that:

The Decision on settlement of the first complaint shall take legal effect if:   After 30 days from the date of issue of such decision, the complainant neither makes the second complaint nor initiate a lawsuit at the Court as regulated in Point a Clause 2 Article 10 of this Decree; Point a Clause 2 Article 10 of this Decree stipulates that:  The complainant is entitled to initiate a lawsuit at the Court in accordance with regulations laid down in the Civil Procedure Code in the following circumstances:  There are grounds for presuming that the decision or behavior of the employer, the organization or individual providing vocational training course, or the organization or individual sending Vietnamese workers working abroad under employment contracts is unlawful and directly infringes his/her legitimate rights and benefits.

Because this is a labour case, the prescriptive period for initiating a lawsuit shall conform to Clause 2 Article 202 of the Labour Code:  The prescriptive period for requesting the Court to solve a personal labour dispute is 01 year commencing from the date of detection of the behavior deemed that it infringes legitimate rights and benefits of each party of the dispute.

On the same day, May 07, 2015, Mr. Toan filed complaint to both C Co., Ltd. and Department of Labour, War Invalids and Social Affairs of Hai Phong City.  On July 14, 2015, C Co., Ltd. issued a Decision No. 28/QD-CTGN responding to the complaint of Mr. Toan.  On December 29, 2015, the Chief Inspector of the Department of Labour, War Invalids and Social Affairs of Hai Phong City issued the Document No. 234/TTrSLDTBXH responding to the complaint of Mr. Toan. Disagreeing with the Decision on complaint settlement, on May 05, 2016, Mr. Toan initiated a lawsuit at the Court. Thus, his petition is made within the prescriptive period as regulated.  The People’s Court of Ngo Quyen District has handled the case in accordance with Point c Clause 1 Article 35 of the Civil Procedure Code and Clause 2 Article 202 of the Labour Code.

Hence, C Company’s appeal indicating that the Decision No. 28/QD-CTGN dated July 14, 2015 of C Company on settlement of complaint made by Mr. Toan is legally effective is completely unfounded.

2.2. Regarding the appeal made by the People’s Procuracy of Hai Phong City and of the defendant over the legality of the labour contract No. 71 dated April 10, 2016:

C Corporation is a party of the joint venture as defined in the signed joint venture agreement on establishment of Shell Gas Hai Phong Co., Ltd.

On October 20, 2005, C Vietnam Corporation and Mr. Dang Vu T have concluded the labour contract No. 50/HDLD-2005, with a term of 04 years commencing from October 20, 2005, in which Mr. Dang Vu T has the professional title of a specialist and job duties, including: perform duties according to responsibilities and professional skills of a specialist of the Department of Business & External Affairs, and perform other duties as assigned by the Head of this Department of Business & External Affairs.  

On October 24, 2005, C Vietnam Corporation issued a Decision No. 1923/CNT/TCCB-LD asserting that Mr. Dang Vu T takes up the new assignment at the Department of Business & External Affairs as of the date on which this Decision is signed.  On the same day, October 24, 2005, C Vietnam Corporation issued a Decision No. 1924/CNT/TCCB-LD on appointment of Mr. Dang Vu T to the Board of Directors of Shell Gas Hai Phong Co., Ltd. for managing C Vietnam Corporation’s stake at this company.

And on this day, October 24, 2005, Shell Gas Hai Phong Co., Ltd. issued a document approving that Mr. Toan shall work as a new Deputy General Director of Shell Gas Hai Phong Co., Ltd. as from October 25, 2005. Section 7 of this document stipulates:   .... “However, in the capacity of a representative of Vinashin, Mr. Toan is entitled to submit any reports to Vinashin according to internal regulations of Vinashin”.  According to the work record dated March 22, 2017, representative of C Corporation confirmed:  Mr. Toan is transferred to C Company because of SBIC’s appointment.  After Mr. Toan was admitted as a member of the Board of Directors of C Company, SBIC has appointed Mr. Toan to hold the position of Deputy General Director of C Company and such appointment was also accepted by C Company.  All benefits of Mr. Toan were covered by C Company.

Thus, Mr. Toan has been an employee of Vinashin as of October 20, 2005, has been appointed by Vinashin to Shell Gas Hai Phong Co., Ltd. as of October 24, 2005 and has officially worked at Shell Gas Hai Phong Co., Ltd. as of October 25, 2005 for managing Vinashin’s stake at this company.  The document dated October 24, 2005 of Shell Gas Hai Phong Co., Ltd. also certified that Mr. Dang Vu T was a representative of Vinashin. And on January 26, 2006, the Board of Directors of Shell Gas Hai Phong Co., Ltd. has approved the Resolution on the list of the Company’s executive members, in which Mr. Dang Vu T was listed as Deputy General Director.

Because Mr. Toan is an employee of SBIC and is appointed by SBIC to manage its stake at Shell Gas Hai Phong Co., Ltd., the fact that Mr. Hoang Giang, General Director of Shell Gas Hai Phong Co., Ltd. entered into the labour contract No. SGH/2006/71 on April 10, 2006 with Mr. Dang Vu T infringes Article 2 of the Resolution of the Board of Directors of Shell Gas Hai Phong Co., Ltd. dated July 18, 2005 on authority of Mr. Hoang Giang, and infringes Article 7.1 of the Charter of Shell Gas Hai Phong Co., Ltd. On the other hand, the labour contract No. SGH/2006/71, in which the professional title of Mr. Toan is “Deputy General Director” and the term of contract is “indefinite term”” has been concluded inconsistently with Article 10 of the Charter of Shell Gas Hai Phong Co., Ltd., stipulating that:  “…..General Director and Deputy General Director shall be appointed for a fixed period determined by the Board of Directors and may be dismissed by the Board of Directors at any time by a written resolution…..”.  And the conclusion of the labour contract No. SGH/2006/71 without the approval and unanimous consent by members of the Board of Directors is not conformable with Article 9 of the Charter of Shell Gas Hai Phong Co., Ltd.

On November 04, 2007, C Vietnam Corporation issued a Decision No.3554/QD-CNT-TCCB-LD to appoint Mr. Dang Vu T - the first Deputy General Director of Shell Gas Hai Phong Co., Ltd. (formerly, a specialist of Department of Business & External Affairs of the Corporation) to manage Vinashin’s stake at Shell Gas Hai Phong Co., Ltd. and to join the Board of Directors of Shell Gas Hai Phong Co., Ltd. as a replacement for Mr. Nguyen Quoc Anh. On December 25, 2014, C Corporation, pursuant to the Resolution No. 296/NQ-CNT dated December 16, 2014 of the Board of Members of the Corporation, issued a Decision No. 1089/QD-CNT on replacement of representative of C Corporation’s stake and termination of appointment of Mr. Dang Vu T as representative of C Corporation’s stake. And on November 03, 2016, C Corporation issued a Decision No. 493/QD-CNT on termination of labour contract signed with Mr. Dang Vu T - a specialist of Department of Business & External Affairs of C Corporation as from November 15, 2016. These Decisions are considered grounds for determining that Mr. Dang Vu T is an employee of SBIC and works under the management and direction of SBIC. 

Deeming that the labour contract No. SGH/2006/71 dated April 10, 2006 signed between Shell Gas Hai Phong Co., Ltd. and Mr. Toan is also a formal contract and improperly signed. Thus, its validity is not accepted.  This labour contract cannot be considered as the sole basis for establishing the labour relationship between Mr. Toan and C Company. Only C Corporation has the right to govern and manage Mr. Toan.

The basis for making appeal of the People’s Procuracy of Hai Phong City believing that because Mr. Toan is a member of the Board of Directors of Shell Gas Hai Phong Co., Ltd, as of October 24, 2005, pursuant to Article 12 of the Law on foreign investment in 1996 and Clause 2 Article 2 of the Government’s Decree No. 44/2003/ND-CP dated May 09, 2003, the conclusion of labour contract with Mr. Toan is not required, for determining the legality of the labour contract No. SGH/2006/71 dated April 10, 2006 is not plausible.

2.3. Regarding dismissal of Mr. Dang Vu T:

Clause 7.5 Article 7 of the Charter of Shell Gas Hai Phong Co., Ltd. stipulates:  “The party of the joint venture is entitled to discharge and dismiss the individual that it appointed to the Board of Directors, and entitled to replace her/him by another”.

Article 10 of the Charter of Shell Gas Hai Phong Co., Ltd. stipulates:   “…..General Director and Deputy General Director shall be appointed for a fixed period determined by the Board of Directors and may be dismissed by the Board of Directors at any time by a written resolution…..”.

Because Mr. Dang Vu T is an employee of C Vietnam Corporation and is appointed by this Corporation to manage its stake at C Co., Ltd., join the Board of Directors and act as Deputy General Director of this C Co., Ltd., and C Corporation has issued the Decision No. 1089/QD-CNT dated December 25, 2014 and the Official Dispatch No. 3600/CNT-TCNS dated December 26, 2014 on replacement of representative of its stake, by which the appointment of Mr. Dang Vu T as representative of stake of C Corporation is terminated, the fact the Board of Directors of C Co., Ltd. issued the Resolution on dismissal of Mr. Toan from the Board of Directors according to two above-mentioned documents is reasonable.  On the same day, on January 23, 2015, the fact the Company has sent the Notice No. 04/2015/CV requesting C Corporation to assign duties and pay benefits to Mr. Dang Vu T, and made the Notice No. 05/2015/CV requesting Mr. Toan to hand over his duties by January 31, 2015, is conformable with Clause 7.5 Article 7 and Article 10 of the Charter of C Co., Ltd.

During the employment of Mr. Dang Vu T at C Co., Ltd., Mr. Toan has his rights, salary and other benefits covered by C Co., Ltd., has his salary raised annually and social insurance and health insurance paid as regulated.  Mr. Toan has salary paid until the end of January, 2015. From February, 2015, his salary and other benefits have been paid by C Corporation.

Thus, the fact that Mr. Dang Vu T believed that as of January 23, 2015, C Co., Ltd.’s failure to assign duties and pay salary and social insurance premiums for him infringes the labour contract No. SGH/2006/71 dated April 10, 2006 and his legitimate rights and benefits is unfounded.  C Co., Ltd. must not make compensation of salary to Mr. Toan.

The fact that the first-instance court recognized the legality of the labour contract, determined that C Co., Ltd. has unilaterally terminated the labour contract signed with Mr. Toan inconsistently with law, and forced C Co., Ltd. to continue performing the labour contract signed with Mr. Toan and make compensation according to Article 42 of the Labour Code is not reasonable.  Actually, two parties did not perform this labour contract because the labour contract No. SGH/2006/71 does not indicate the contents of work and only specifies the job duties of Mr. Toan as “according to the job description” but Mr. Toan is unable to provide the said job description and actually, no job description is made by Citygas.

Mr. Toan stated that during his employment at Shell Gas Hai Phong Co., Ltd., he received neither salary nor any benefits from Vinashin.  Salary and other benefits of Mr. Toan are paid by Shell Gas Hai Phong Co., Ltd. according to the labour contract No. SGH/2006/71. However, he is the representative of SBIC in charge of managing SBIC’s stake at Shell Gas Hai Phong Co., Ltd., so the fact that Shell Gas Hai Phong Co., Ltd. pays salary, bonus and other benefits to the representative is conformable with Article 47 of the Regulations on financial management of state-owned companies and management of state funding invested in other enterprises enclosed with the Government’s Decree No. 199/2014/ND-CP dated December 03, 2004. Article 47 stipulates salary, bonus and benefits of the representative as follows:

1. A representative joining the managing or executive board of another enterprise is entitled to receive salary, allowances, bonus and other benefits paid by that enterprise according to regulations laid down in its Charter.

2. If a representative in another enterprise does not have his/her salary, allowances, bonus and other benefits paid by that enterprise, he/she shall have these amounts paid by the representative of capital’s owner.

A representative is not allowed to receive salary, allowances, bonus and other benefits from both sides.

From October 25, 2005, when the labour contract is not yet signed, Mr. Toan has worked and received salary from Shell Gas Hai Phong Co., Ltd. as recommended by Vinashin.  This means that on October 24, 2005, Shell Gas Hai Phong Co., Ltd. sent a written notification to Vinashin of approving Mr. Dang Vu T as Deputy General Director of Shell Gas Hai Phong Co., Ltd. as of October 24, 2005. After receiving this document, Vinashin gave no dissenting opinion.

Thus, actually Shell Gas Hai Phong Co., Ltd. does not have the right to make decision on the position of Deputy General Director and only approves this position as appointed by Vinashin. This is conformable with Clause 7.3 Article 7 of its Charter and the joint venture agreement dated May 05, 1995 signed between Vinashin and foreign partners (parties of the joint venture).

[3] Regarding Mr. Toan’s request for payment of unused annual leave days in 2014 and 2015 as VND 48,422,727:

C Company agreed to pay unused annual leave days in 2014 to Mr. Toan as follows: (VND 35,510,000/ 22 days) x 17 days = VND 27,439,545. This payment is conformable with Article 111 and Article 112 of the Labour Code as Mr. Toan has still worked at C Company in 2014. Although the amount of unused annual leave days in two years requested by Mr. Toan is VND 48,422,727, C Company only agreed to pay unused annual leave in 2014 to Mr. Toan with an amount of VND 27,439,545. The Trial panel accepts the solution of C Company in favor of Mr. Toan.  So C Company is forced to pay unused annual leave in 2014 to Mr. Toan with an amount of VND 27,439,545.

With regard to unused annual leave days in 2015: Because Mr. Toan has returned to SIBC, any benefits of Mr. Toan are covered by SIBC.

The fact that Mr. Toan believed that C has unilaterally terminated the labour contract signed with him on the basis of the labour contract No. SGH/2006/71 dated April 10, 2006 signed with Shell Gas Hai Phong Co., Ltd. is unfounded.  C Company has fully paid benefits of Mr. Toan during his employment at this Company/  Thus, Mr. Toan’s request for compensations from C Company is not accepted.

From the above analysis, pursuant to Clause 2 Article 308, and Clause 1 Article 309 of the Civil Procedure Code, the appellate trial panel alters the first-instance judgment as follows:  Only a part of contents in the petition of Mr. Toan is accepted; a part of the appeal filed by C Company is accepted; and the appeal made by the People’s Procuracy of Hai Phong City is also accepted.

[4] Other decisions specified in the first-instance judgment against which no appeal is made shall remain valid.

[5] Regarding the court fees for solving the first-instance labour case:  The court fee for solving the first-instance labour case paid by C Co., Ltd. is altered. Mr. Dang Vu T is completely exempted from payment of the court fees for solving first-instance labour case.

[6] Regarding the court fees for solving the appeal labour case:  Because the first-instance judgment is altered, C Co., Ltd. shall pay the court fees for solving the appeal labour case.

For the said reasons;

THE COURT DECIDES

Pursuant to Point a Clause 1 Article 32, Clause 1 Article 147, Clause 2 Article 148, Clause 2 Article 308 and Clause 1 Article 309 of the Civil Procedure Code;

Pursuant to Article 30, Article 38, Article 41, Article 42, Article 111, Article 112 of the Labour Code in Viet Nam;

Pursuant to Clause 2 Article 29 and Article 48 of the Resolution No. 326/2016/UBTVQH14 in Viet Nam dated December 30, 2016 of Standing Committee of the National Assembly on court fees and charges, collection, exemption, reduction, transfer, management and use thereof;

Pursuant to Clause 2 Article 11 of the Ordinance No. 10/2009/UBTVQH12 in Viet Nam dated February 27, 2009 of the Standing Committee of the National Assembly on the court fees and charges;

The first-instance judgment is altered as follows:

 [1] A part of the appeal filed by C Co., Ltd. is accepted and the appeal made by the People’s Procuracy of Hai Phong City is also accepted.

 [2] A part of contents of the petition of Mr. Dang Vu T is accepted:  C Company is forced to pay unused annual leave in 2014 to Mr. Toan with an amount of VND 27,439,545.

From the date on which the judgment takes its legal effect (in case the judgment enforcement authority is entitled to actively make decision on judgment enforcement) or from the date on which the judgment creditor submits the petition for judgment enforcement (with regard to amounts payable to the judgment creditor) until all amounts are fully paid, the judgment debtor must monthly incur interests on outstanding judgment debt arrears according to the basic interest rate announced in Clause 2 Article 468 of the Civil Code in 2015 in Viet Nam.

 [3] The resolution of the request of Mr. Dang Vu T requesting C Co., Ltd. to pay social insurance, health insurance, bonus in 2014, interests on late payment of these amounts, total amount as VND 270,794,960 (two hundred seventy million seven hundred ninety four thousand nine hundred sixty dongs) is delayed.

 [4] Regarding the court fees for solving the first-instance labour case:

The content about the court fees for solving the first-instance labour case is altered as follows:  C Co., Ltd. must pay VND 1,371,977 (one million three hundred seventy one thousand nine hundred seventy seven dongs) of the court fees for solving the first-instance labour case.

Mr. Dang Vu T is completely exempted from payment of the court fees for solving first-instance labour case.

 [5] Regarding the court fees for solving the appeal labour case:  C Co., Ltd. must not pay the appellate court fees. An amount of appellate court fees of VND 300,000 (three hundred thousand) temporarily paid under receipt No. 001895 dated July 18, 2017 of the Civil Judgment Enforcement Department of Ngo Quyen District is refunded to C Co., Ltd.

The judgment of the appellate court comes into force from the date on which it is pronounced.

In case the judgment is enforced as per regulations in Article 2 of the Law on enforcement of civil judgments in Viet Nam, 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 Articles 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.  


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Judgment no. 04/2017/LD-PT dated november 30, 2017 on dispute over unilateral termination of labour contract

Số hiệu:04/2017/LD-PT
Cấp xét xử:Phúc thẩm
Agency issued: Tòa án nhân dân Hải Phòng
Field:Lao động
Date issued: 30/11/2017
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