Precedent No. 70/2023/AL was adopted by the Council of Justices of the Supreme People’s Court on August 18, 2023, and was published under Decision No. 364/QD-CA dated October 1, 2023, of the Chief Justice of the Supreme People’s Court.
1. What is a precedent?
Precedents are arguments and rulings in legally effective judgments and decisions of the Courts regarding specific cases selected by the Council of Justices of the Supreme People’s Court and published by the Chief Justice of the Supreme People’s Court as precedents for Courts to study and apply in adjudication. (Article 1 of Resolution 04/2019/NQ-HDTP)
A selected precedent must meet the following criteria:
– Have value in clarifying legal provisions with different interpretations; analyze and explain legal issues and events; and indicate principles, handling directions, or legal norms to be applied in a specific case, or demonstrate equity regarding issues not yet specifically regulated by law;
– Be exemplary;
– Have value in guiding the uniform application of law in adjudication.
2. Precedent No. 70/2023/AL on the termination of employment contracts for employees who are part-time trade union officials
2.1. Source of the precedent
Cassation Decision No. 06/2022/LD-GDT dated September 26, 2022, of the High People’s Court in Ho Chi Minh City regarding the labor case “Dispute over unilateral termination of employment contract” between the plaintiff Mr. Vuong Quoc A and the defendant K Vietnam Company Limited.
Location of the precedent’s content:
Paragraphs 3 and 4 of the “Court’s Assessment” section.
2.2. Summary of the precedent’s content
– Precedent situation:
An employee and an employer entered into a fixed-term employment contract. During the term of the contract, the employee was elected as the Chairperson of the Grassroots Trade Union Executive Board, but the candidacy and election were invalid. Upon the expiry of the contract term, the employer issued a decision to terminate the employment contract with the employee.
– Legal solution:
In this case, the Court must determine that the employer’s termination of the employment contract with the employee was correct.
Legal provisions related to the precedent:
– Article 36 Labor Code of Vietnam 2012 (corresponding to Article 34 Labor Code of Vietnam 2019); Article 192 Labor Code 2012;
– Article 25 Law on Trade Unions 2012.
Keywords of the precedent:
“Employment contract”; “Termination of employment contract”; “Trade union official”.
CASE CONTENT:
The plaintiff, Mr. Vuong Quoc A, presented:
He was recruited by K Vietnam Co., Ltd. (Company K) to work in March 2015, with a 1-month probationary period, followed by a 12-month employment contract. After the contract expired, Company K extended it until November 25, 2016.
During his employment, Mr. A completed his duties and was not subject to any disciplinary action. On November 25, 2016, Company K served him with Decision No. 05/2016/QDNV-KD terminating the employment contract due to the expiry of the contract term; at this time, he was the Chairperson of the Grassroots Trade Union of the Company.
Feeling that Company K’s termination of his employment contract was incorrect, he filed a lawsuit requesting the Company to reinstate him, pay his salary, and provide compensation totaling 327,690,406 VND.
The representative for the defendant presented:
Company K signed an employment contract as Mr. A stated. Before the employment contract expired on March 24, 2016, the Company issued Decision No. 03/2016/QDNV-KD not to renew 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 Trade Union Executive Board term). On October 24, 2016, the Company continued to issue a Decision not to renew the employment contract with Mr. A, which was sent to Mr. A and the B Industrial Zone Trade Union.
Subsequently, the Company learned that the Grassroots Trade Union Executive Board held a Congress and elected Mr. A as Chairperson. The Company sent a document to the B Industrial Zone Trade Union regarding the termination of the employment contract with Mr. A, but it was not accepted. Company K continued to send a document to the Department of Labor, Invalids and Social Affairs of Dong Nai province and received guidance according to legal regulations. Since Company K terminated the employment contract with Mr. A in accordance with regulations, it did not agree with Mr. A’s lawsuit claims.
The person with related rights and obligations, Dong Nai Provincial Social Insurance: Requested to be absent and did not submit any presentation to the Court.
The person with related rights and obligations, the Trade Union of K Vietnam Co., Ltd., presented: The procedures for the congress were conducted in accordance with the guidelines.
In First-instance Judgment No. 21/2019/LD-ST dated November 21, 2019, the People’s Court of Bien Hoa City decided (summary):
To not accept the lawsuit request of Mr. Vuong Quoc A regarding the “Dispute over unilateral termination of employment contract” with K Vietnam Co., Ltd.
On December 05, 2019, Mr. Vuong Quoc A appealed the first-instance judgment.
In Appellate Judgment No. 19/2020/LD-PT dated July 30, 2020, the People’s Court of Dong Nai Province decided (summary):
To accept the appeal request of the plaintiff Mr. Vuong Quoc A, reversing the entire first-instance judgment.
To compel K Vietnam Co., Ltd. to pay the salary for the period Mr. Vuong Quoc A was not allowed to work from November 25, 2016, to the date of the 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 of 02 months’ salary due to the Company’s unilateral termination of the employment contract = 11,466,000 VND.
Total: 216,090,000 VND.
K Vietnam Co., Ltd. must pay full Social Insurance, Health Insurance, and Unemployment Insurance contributions for Mr. Vuong Quoc A from November 2016 to November 2019, based on a salary of 5,733,000 VND/month.
In addition, the Appellate Court also decided on the obligation for late payment, court fees, and the rights and obligations of the parties during the judgment enforcement phase.
On September 11, 2020, K Vietnam Co., Ltd. requested a review of the aforementioned appellate judgment under 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 protested the aforementioned appellate labor judgment. It was requested that the Judicial Council of the High People’s Court in Ho Chi Minh City conduct a cassation trial to annul Appellate Judgment No. 19/2020/LD-PT dated July 30, 2020, of the People’s Court of Dong Nai Province, and uphold 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 hearing, the representative of the High People’s Procuracy in Ho Chi Minh City expressed the opinion: To request the Trial Panel to accept the protest of the Chief Justice of the High People’s Court in Ho Chi Minh City.
COURT’S ASSESSMENT:
[1] Mr. Vuong Quoc A and K Vietnam Co., Ltd. (hereinafter referred to as Company K) signed employment contract No. 15/HDLD/KD.14 dated April 25, 2015, for a term of 12 months, expiring on April 25, 2016. While the employment contract was in effect, the Grassroots Trade Union of Company K was established, and Mr. Vuong Quoc A was elected as the Chairperson of the Provisional Executive Board according to Decision No. 111/QDCN-CDKCN dated November 25, 2015, with a term of 12 months to conduct a congress to elect the Grassroots Trade Union Executive Board before November 25, 2016. Therefore, Company K and Mr. A signed agreement document No. 137/HDLD/KD.16 regarding the extension of Mr. A’s employment contract until November 25, 2016, which explicitly stated “Extension of the period until the end of the Trade Union Executive Board term 25/11/2015-25/11/2016”. The aforementioned extension of the employment contract is consistent with the provisions of clause 6, Article 192 of the Labor Code 2012 and Article 25 of the Law on Trade Unions.
[2] Simultaneously with the extension of the employment contract with Mr. A until the end of the Trade Union Executive Board term as mentioned above, Company K also issued several written notices to Mr. A and the B Industrial Zone Trade Union stating that it would not renew the employment contract with Mr. A after the extension period expired, specifically: Decision No. 03/2016/QDNV-KD dated March 24, 2016; Documents dated October 24, 2016, November 07, 2016; Decision No. 05/2016/QDNV-KD dated November 25, 2016. At the appellate trial, Mr. A admitted receiving the Company K’s decisions and notices regarding the non-renewal of his employment contract.
[3] As of October 24, 2016, when the Provisional Trade Union Executive Board conducted the Congress, Mr. A’s employment contract had only 01 month remaining, yet Mr. A and the Industrial Zone Trade Union still included Mr. A in the list for election to the Grassroots Trade Union Executive Board. This is inconsistent with Guideline No. 398/HD-TLD dated March 28, 2012, of the Vietnam General Confederation of Labor, which states: “Participants in the Executive Board, besides meeting the criteria, must also satisfy the following conditions: regarding re-election to the executive board: Have enough working age to serve at least 1/2 of the term.” Therefore, Mr. A’s election as Chairperson of the Grassroots Trade Union Executive Board of Company K for the 2016-2021 term, as recognized by the Industrial Zone Trade Union’s Decision No. 138/QDCN-CDKCN dated October 27, 2016, was invalid regarding the criteria for candidates and elected persons.
[4] After the extension of the employment contract expired, Company K’s issuance of Decision No. 05/2016/QDNV-KD dated November 25, 2016, terminating the employment contract with Mr. A was in accordance with the provisions of clause 1, Article 36 of the Labor Code 2012. Therefore, Mr. A’s lawsuit claiming that Company K’s issuance of the Decision to terminate his employment contract was illegal is groundless. The First-instance Court’s rejection of Mr. A’s lawsuit claims is well-founded. The Appellate Court’s reversal of the first-instance judgment to accept Mr. A’s lawsuit claims was not in accordance with the law.
For these reasons,
DECISION:
Based on Article 337, Article 343, and Article 349 of the Civil Procedure Code.
1. Accept Cassation 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. Annul Appellate Judgment No. 19/2020/LD-PT dated July 30, 2020, of the People’s Court of Dong Nai Province, and uphold 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 issuance.
PRECEDENT CONTENT
“[3] As of October 24, 2016, when the Provisional Trade Union Executive Board conducted the Congress, Mr. A’s employment contract had only 01 month remaining, yet Mr. A and the Industrial Zone Trade Union still included Mr. A in the list for election to the Grassroots Trade Union Executive Board, which is inappropriate… Therefore, Mr. A’s election as Chairperson of the Grassroots Trade Union Executive Board of Company K for the 2016-2021 term, as recognized by the Industrial Zone Trade Union’s Decision No. 138/QDCN-CDKCN dated October 27, 2016, was invalid regarding the criteria for candidates and elected persons.
[4] After the extension of the employment contract expired, Company K’s issuance of Decision No. 05/2016/QDNV-KD dated November 25, 2016, terminating the employment contract with Mr. A was in accordance with the provisions of clause 1, Article 36 of the Labor Code. Therefore, Mr. A’s lawsuit claiming that Company K’s issuance of the Decision to terminate his employment contract was illegal is groundless. The First-instance Court’s rejection of Mr. A’s lawsuit claims is well-founded. The Appellate Court’s reversal of the first-instance judgment to accept Mr. A’s lawsuit claims was not in accordance with the law.”
