Precedent No. 70/2023/AL on termination of labor contracts for employees who are part-time union officials in Vietnam

Overview of the content of the Precedent:

- Precedent situation:

The employee and the employer sign a definite-term employment contract. During the contract term, the employee is elected Chairman of the Executive Committee of the grassroots trade union, but his candidacy and election are invalid. At the end of the contract term, the employer issues a decision to terminate the employment contract with the employee.

- Legal solutions:

In this case, the Court must determine that it is correct for the employer to terminate the employment contract with the employee.

Legal provisions related to Precedent:

- Article 36 of the Labor Code 2012 (corresponding to Article 34 of the Labor Code 2019); Article 192 of the Labor Code 2012;

- Article 25 of the Law on Trade Union 2012.

Keywords of Precedent:

“employment contract”; “Termination of employment contract”; "Union officials".

CONTENTS OF THE CASE:

Plaintiff Mr. Vuong Quoc A presented:

He was hired by K Vietnam Company Limited (K Company) in March 2015, took a 1-month probationary period, and then signed a 12-month employment contract. After the contract expired, Company K extended it until November 25, 2016.

During work, Mr. A completed his tasks and was not disciplined. On November 25, 2016, company K gave him Decision No. 05/2016/QDNV-KD to terminate the employment contract on the grounds that the employment contract expired. At this time, he was the Chairman of the Company's grassroots Trade Union.

Realizing that Company K improperly terminated the employment contract with him, he sued to request that the Company accept him back to work and pay his salary and compensation totaling 327,690,406 VND.

The defendant's representative stated:

Company K has signed a employment contract, as Mr. A presented. Before the employment contract expired on March 24, 2016, the Company issued Decision No. 03/2016/QDNV-KD not to re-sign the employment contract with Mr. A. The company extended the employment contract with Mr. A from April 26, 2016 to November 25, 2016 (the end of the term of the Trade Union Executive Committee). On October 24, 2016, the Company continued to issue a Decision not to re-sign the employment contract with Mr. A, sent to Mr. A and the Trade Union of Industrial Park B.

After that, the Company learned that the Executive Committee of the grassroots Trade Union held a congress and elected Mr. A as President of the Trade Union. The company sent a document to the Trade Union of Industrial Park B to terminate the employment contract with Mr. A, but it was not accepted. Company K continues to send documents to the Department of Labor, War Invalids, and Social Affairs of Dong Nai Province for guidance according to the provisions of the law. Because Company K terminated the employment contract with Mr. A in accordance with regulations, it did not agree with Mr. A's lawsuit requests.

Persons with related rights and obligations to Dong Nai Provincial Social Insurance: Please be absent and have no statements sent to the Court.

Persons with related rights and obligations of the Trade Union of K Vietnam Co., Ltd. presented: The order and procedures of the congress are in accordance with regulations and instructions.

In First Instance Judgment No. 21/2019/LD-ST dated November 21, 2019, the People's Court of Bien Hoa City decided (summary):

Do not accept Mr. Vuong Quoc A's request to sue regarding "Dispute on unilateral termination of employment contract" with K Vietnam Company Limited.

On December 5, 2019, Mr. Vuong Quoc A appealed the first-instance verdict.

In Appeal Judgment No. 19/2020/LD-PT dated July 30, 2020, the People's Court of Dong Nai province decided (summary):

Accept the appeal request of plaintiff Mr. Vuong Quoc A and amend the entire first instance judgment.

Forcing K Vietnam Co., Ltd. to pay wages during the period Mr. Vuong Quoc A was not allowed to work from November 25, 2016 to the date of first instance trial on November 21, 2019, which is 35 months and 18 days (5,733,000 VND/month x 35 months + 5,733,000 VND/month : 26 days x 18 days) = 204,624,000 VND.

Compensation for 02 months' salary due to the company unilaterally terminating the employment contract = 11,466,000 VND.

Total: 216,090,000 VND.

K Vietnam Company Limited must pay Social Insurance, Health Insurance, and Unemployment Insurance for Mr. Vuong Quoc A in full from November 2016 to November 2019. The salary used as a basis for payment is 5,733,000 VND/month.

In addition, the Court of Appeal also decides on late payment obligations, court fees, and the rights and obligations of litigants during the judgment enforcement phase.

On September 11, 2020, K Vietnam Company Limited requested to reconsider the above appeal judgment according to cassation procedures.

In Decision No. 01/2022/KN-LD dated April 22, 2022, the Chief Justice of the High People's Court in Ho Chi Minh City appealed the above appeal labor judgment. Recommend that the Judges Committee of the High People's Court in Ho Chi Minh City conduct a cassation trial to annul the Appeal Judgment No. 19/2020/LD-PT dated July 30, 2020 of the People's Court of Dong Nai Province, upholding the First Instance Judgment No. 21/2019/LD-ST dated November 21, 2019 of the People's Court of Bien Hoa city, Dong Nai province.

At the cassation trial, the representative of the High People's Procuracy in Ho Chi Minh City expressed his opinion: Recommend that the Trial Council accept the appeal of the Chief Justice of the High People's Court in Ho Chi Minh City.

COURT'S OPINION:

[1] Mr. Vuong Quoc A and K Vietnam Company Limited (hereinafter referred to as Company K) signed employment contract No. 15/HDLD/KD.14 dated April 25, 2015, period of 12 months, expiring on April 25, 2016. During the effective period of the employment contract, the Grassroots Trade Union of Company K was established, and Mr. Vuong Quoc A was elected as the Chairman of the Provisional Executive Committee according to Decision No. 111/QDCN-CDKCN dated November 25, 2015; there is a 12-month period to conduct a congress to elect the Grassroots Trade Union Executive Committee before November 25, 2016. Therefore, Company K and Mr. A signed document agreement No. 137/HDLD/KD.16 on extending Mr. A's employment contract until November 25, 2016; which clearly states "Extension of time until the end of the term of the Trade Union Executive Committee from November 25, 2015 to November 25, 2016". The above agreement to extend the employment contract is in accordance with the provisions of Clause 6, Article 192 of the Labor Code and Article 25 of the Law on Trade Union.

[2] In parallel with extending the employment contract with Mr. A until the end of the term of the Trade Union Executive Committee as mentioned above, company K also has many documents informing Mr. A and Industrial Park B Trade Union that it will not re-sign the employment contract with Mr. A after the expiration of the extension period, specifically: Decision No. 03/2016/QDNV-KD dated March 24, 2016; Documents dated October 24, 2016, November 7, 2016; Decision No. 05/2016/QDNV-KD dated November 25, 2016. At the appeal hearing, Mr. A admitted that he had received decisions and notices from Company K about not re-signing the employment contract with him.

[3] On October 24, 2016, when the Provisional Trade Union Executive Committee held the Congress, Mr. A's employment contract was only valid for 1 month, but Mr. A and the Industrial Park Trade Union still put Mr.A of the Vietnam General Confederation of Labor as follows: "Participants in the Executive Committee, in addition to meeting the standards, must also meet the following conditions: regarding re-election to the Executive Committee: must be of sufficient working age to serve at least 1/2 term of office. Therefore, Mr. A was elected Chairman of the Executive Committee of the Grassroots Trade Union of Company K for the 2016-2021 term, and the Industrial Park Trade Union issued Decision No. 138/QDCN-CDKCN dated October 27, 2016, which was recognized as invalid in terms of candidate and elected candidate standards.

[4] After the expiration of the employment contract extension, company K issued Decision No. 05/2016/QDNV-KD dated November 25, 2016 to terminate the employment contract with Mr. A in accordance with the provisions of Clause 1, Article 36 of the Labor Code. Therefore, Mr. A's lawsuit claims that Company K's issuance of a Decision to terminate the employment contract with him illegally has no basis for acceptance. The first-instance court did not accept Mr. A's request to sue as well-founded. The Court of Appeal revised the first-instance judgment and accepted Mr. A's request to sue as not in accordance with the law.

For the above reasons,

DECISION:

Pursuant to Article 337, Article 343, and Article 349 of the Civil Procedure Code.

1. Accept Protest No. 01/2022/KN-LD dated April 22, 2022, of the Chief Justice of the High People's Court in Ho Chi Minh City.

2. Cancel Appeal Judgment No. 19/2020/LD-PT dated July 30, 2020 of the People's Court of Dong Nai Province, upholding the First Instance Judgment No. 21/2019/LD-ST dated November 21, 2019 of the People's Court of Bien Hoa city, Dong Nai province.

3. The cassation decision takes legal effect from the date of the decision.

CONTENTS OF PRECEDENT

"[3] On October 24, 2016, when the Provisional Trade Union Executive Committee held the Congress, Mr. A's employment contract was only valid for 1 month, but Mr. A and the Industrial Park Trade Union still put Mr. A on the election list for the Grassroots Trade Union Executive Committee, which is not appropriate... Therefore, Mr. A was elected Chairman of the Executive Committee of the Grassroots Trade Union of Company K for the 2016-2021 term, and the Industrial Park Trade Union issued Decision No. 138/QDCN-CDKCN dated October 27, 2016, which was recognized as invalid in terms of candidate and elected candidate standards.

[4] After the expiration of the employment contract extension, company K issued Decision No. 05/2016/QDNV-KD dated November 25, 2016 to terminate the employment contract with Mr. A in accordance with the provisions of Clause 1, Article 36 of the Labor Code. Therefore, Mr. A's lawsuit claims that Company K's issuance of a Decision to terminate the employment contract with him illegally has no basis for acceptance. The first-instance court did not accept Mr. A's request to sue as well-founded. The Court of Appeal revised the first instance judgment and accepted Mr. A's request to sue, which is not in accordance with the law."

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