Are Vietnamese employees susceptible to dismissal due to changes in the Company's structure?

To better understand this issue, let's find out at the Judgment  21/2017/LD-PT  dated December 1, 2017 on the dispute over the unilateral termination of the labor contract. The contents of the judgment are as follows:

“From January 24, 2011, Ms. Hoang Thi Phuong L signed an indefinite-term labor contract with the title of purchasing specialist at H International Hospital for Obstetrics and Gynecology Joint Stock Company is now the Joint Stock Company of International General Hospital H.

On February 17, 2016, the Company informed Ms. L about the arrangement of personnel structure at the company. The company requires Ms. L to write her resignation letter, otherwise, the company will make a decision to quit her job on the grounds of restructuring or reducing personnel. On February 24, 2016, Ms. L received Notice No. 01 HCNS/T2-2016 about the human resources department requesting Ms. L to sign the notice of staff reduction due to restructuring and rearrangement of staff. Accordingly, Ms. L will work until the end of April 25, 2016. On May 1, 2016, the Company issued a decision to unilaterally terminate the labor contract with Ms.

The company said that: at the beginning of 2016, the Company realized that the business situation was not effective, it was necessary to rearrange the personnel structure while the labor demand of the departments was full. Therefore, the Company considers the plan to reduce personnel. Initially, the company planned to cut two employees, including Ms. Hoang Thi Phuong L. However, after that, there was an employee who applied for her own leave, so the number of employees that had to be cut by one was Ms. Hoang Thi Phuong L.

The plaintiff said that after letting Ms. L quit her job, the Company recruited another person (Ms. Nguyen Thi Kim Th) to replace Ms. L's position, but in fact, the documents and evidence submitted by the plaintiff's representative showed Mrs. Th joined the Company before Ms. L quit. The plaintiff's representative also said that it was not true that the defendant presented the company's business situation as difficult because the company was profitable. Meanwhile, the defendant's representative presented the cause of the labour restructuring to ensure the Company's business operations more effectively.

In addition, during the settlement of the case, the defendant's representatives all agreed to present: Due to the ineffectiveness of the Company's operation, it had to restructure the labour force, and rearrange the departments within the company. The company should have the respondent carry out the procedure to cut some employees, not have a sudden loss as stated by the plaintiff's representative.

Thus, in the above case, it is clear that the company does not make a loss, but only needs to prove that the company has restructured its employees (even if it is only 1 or 2 employees), it can also dismiss the employee without doing so. unlawful.

The employer's dismissal of employees due to structural change is specified in Articles 36 and 44 of the 2012 Labor Code of Vietnam

Article 36. Cases of termination of labour contracts

1. The labor contract expires, except the case specified in Clause 6, Article 192 of this Code.

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10. The employer unilaterally terminates the labor contract under Article 38 of this Code; the employer lays off the employee due to structural or technological changes or because of economic reasons, merger, consolidation or division of the enterprise or cooperative.

Article 44. Obligations of an employer in case of changing structure, technology or economic reasons

1. In case there is a change in the structure or technology that affects the employment of many employees, the employer shall elaborate and implement a labor utilization plan in accordance with Article 46 of this Code. In case new jobs are created, priority must be given to re-training these employees for continued employment.

In case the employer cannot create new jobs and have to dismiss employees, the employer shall pay job-loss allowances to the employees in accordance with Article 49 of this Code.

…

3. The dismissal of more than one employee in accordance with this Article may be implemented only after discussion with the representative organization of the grassroots-level employees’ collective and notification 30 days in advance to the provincial-level state management agency of labor.

The structural change specified in Clause 1, Article 44 above is guided by Clause 1, Article 13 of Decree No. 05/2015/ND-CP

Article 13. Change of structure, technology and economic reasons

"1. Changes in structure and technology specified in Clause 1, Article 44 of the Labor Code include the following cases:

a) Changing organizational structure, reorganizing labor;

b) Change of product, product structure;

c) Change in production and business processes, technology, machinery and equipment associated with the employer's production and business lines."

Therefore, only because of the structural change that causes many employees to lose their jobs, the new employer must develop and implement a labor use plan (the procedure is quite cumbersome and time-consuming) and if only 1 employee is dismissed, the employer does not need to develop any labor plan, just need to notify in advance, make a decision to terminate the job, and pay compensation (simple, easy and fast).

Through the legal regulations as well as the judgment mentioned above, it is found that the company can use the excuse to change the structure to let the employee quit easily. There is no need to prove the fault of the employee, no need to conduct disciplinary action in the correct order and cumbersome procedure, but only need to: Prove that the company's operations are not effective (can prove that the development plan is not achieved, the profit level is not as expected ...) absolutely does not need to prove that the company is at a loss. At that time, the company was able to propose a plan to restructure the labour force; thereby terminating the contract with the desired employee without the employee having to do anything wrong.

According to the author's point of view, this is one of the gaps and limitations of the labour law as well as the reality of trial in court, when the company just needs to be able to let the employee quit based on structural change. I say the gap because the company can completely take the initiative in the company to come up with a labour restructuring plan, maybe that department needs 7 people to work effectively but the company is still ready for one person who is not. Satisfied in the break room. And to avoid trouble, the company will not immediately hire another person into the office but can hire 1 or 2 months before, or it can also hire workers with a different name but work for the room where the employee is injured. quit the other job... Those things are completely simple, within the reach of the employer.

There are many opinions that, when an employee has signed an indefinite-term labor contract, the possibility of being dismissed is very low, but in reality, it is difficult to predict what.

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