When an employee breaks the rules, many foreign managers reach instinctively for a “fine” or a salary deduction — the two responses Vietnamese labour law prohibits outright. Discipline here is a closed four-step ladder with strict limitation periods and procedure; pick the wrong step or skip the procedure and the decision can be annulled.
The four-step ladder in Article 124
Article 124 of the 2019 Labour Code permits exactly four disciplinary measures: (1) reprimand; (2) deferral of a wage raise for no more than six months; (3) demotion from a held position; and (4) dismissal. The list is closed — an employer may not invent alternatives such as monetary fines, salary cuts, grade reductions or forced unpaid leave, because Article 127 expressly forbids fines and pay cuts in lieu of discipline, and forbids disciplining conduct that the internal labour regulations do not cover.
The ladder’s graduation demands proportionality: a reprimand for a first minor breach; wage-raise deferral for repeated or medium-impact misconduct; demotion only for someone actually holding a position and for conduct tied to that position; and dismissal strictly as the last resort, confined to the cases enumerated in Article 125 — theft, embezzlement, disclosure of secrets causing serious damage, workplace sexual harassment as defined in the internal regulations, or unauthorised absence reaching the statutory day counts. Outside Article 125, no self-assessed “serious” reason justifies dismissal.
Limitation periods and mandatory procedure
Under Article 123, discipline must be imposed within six months of the misconduct; for breaches directly involving finance, assets or disclosure of technological and business secrets, the ceiling is twelve months. Miss the window without issuing a decision and the employer loses the right to sanction that conduct. Certain periods — sick leave, maternity, custody or detention — are carved out of the running of the clock as the rules prescribe.
Procedure under Article 122 is equally unforgiving: the employer must prove the employee’s fault; the employee’s workplace representative organisation must participate where the employee is a member; the employee must be present, may defend themselves or be defended by a lawyer or another person; and the session must be minuted. Omit one element — above all the representative organisation’s participation or proof of fault — and the decision is highly vulnerable to being declared void in a dispute.
Expungement, reduction and challenges
A sanction does not follow the worker forever: a reprimand lapses after three months, a wage-raise deferral after six months, and a demotion after half its term, provided there is no re-offending, under the detailed rules of Decree 145/2020/ND-CP — expungement is automatic, and the expunged record may not be recycled as a “repeat offence” foundation later. An employee showing progress may also be granted a reduction of the running term.
An employee who disagrees may challenge through the individual labour dispute channel: a labour mediator first, then a labour arbitration council or the People’s Court. A dismissal — in substance a termination of the labour contract — found unlawful obliges the employer to reinstate the employee, pay wages and social insurance for the period out of work, and compensate under Article 41 of the 2019 Labour Code.
Frequently Asked Questions
How many disciplinary forms are there?
Four, under Article 124 of the 2019 Labour Code: reprimand; deferral of a wage raise for up to six months; demotion; and dismissal. The list is closed — fines, salary deductions and home-made sanctions are not available, and Article 127 bans fines and pay cuts in place of discipline.
What is the limitation period?
Six months from the date of the misconduct; up to twelve months for breaches directly involving finance, assets or disclosure of technological or business secrets (Article 123 of the 2019 Labour Code). Once the period lapses, the employer can no longer sanction that conduct.
Does a sanction get expunged?
Yes, automatically: a reprimand after three months, wage-raise deferral after six months, demotion after half the term — provided no re-offence in the meantime, under Decree 145/2020/ND-CP. Employees who show progress may also have the term reduced.
How can an employee challenge it?
Through the individual labour dispute route: labour mediator, then a labour arbitration council or the court. If a dismissal is found unlawful, the employer must take the employee back, pay full wages and insurance for the period of exclusion, and compensate under Article 41 of the 2019 Labour Code.
This article has been quality-reviewed by the FLAW AI Legal Council