In the labor lawsuits companies lose, dismissal discipline annulled for procedural errors overwhelmingly outnumbers cases wrong on substantive grounds. A reality many managers have not absorbed: in labor discipline, “proper procedure” matters no less than “the right person, the right matter”. A dismissal decision with legitimate grounds but issued after a meeting missing mandatory participants, or beyond the statutory limitation period, can still be annulled in full.
This article analyzes the legal framework on labor discipline in Articles 122 to 128 of the Labor Code 2019 and Article 70 of Decree 145/2020/ND-CP, focusing on the points companies get wrong most in practice.
Labor Discipline: A Company Right, But with Limits
Article 117 defines labor discipline as the rules on compliance with working time, technology and production/business management issued by the employer in the internal labor regulations and as prescribed by law. Companies have the right to discipline violators, but this right is bounded by three layers: only conduct provided for in the regulations may be disciplined; only the forms listed by law may be applied; and the statutory order and procedures must be strictly followed.
The mindset must change: discipline is not a manager’s arbitrary punishment tool but a quasi-judicial legal procedure. Every step — making minutes, notifying, organizing the meeting, issuing the decision — can become evidence examined by the court.
Four Disciplinary Forms under the Law
Article 124 lists exhaustively four forms: reprimand; deferral of salary advancement for no more than 06 months; demotion; and dismissal. Companies may not invent any other form, however elegant the name.
Reprimand applies to first-time minor violations. Salary advancement deferral and demotion are intermediate forms, with demotion applying only to persons holding managerial positions. Dismissal is the heaviest form, terminating the employment relationship, applicable only in the four cases listed in Article 125. The chosen form must be proportionate to the nature and severity of the violation — applying dismissal to minor violations is easily assessed by courts as abuse of rights.
Four Cases for Dismissal
Article 125 limits dismissal to four cases. First, the employee commits theft, embezzlement, gambling, intentional infliction of injury, or drug use at the workplace. Second, disclosing business or technological secrets, infringing intellectual property rights, causing serious damage or threatening to cause especially serious damage to the employer’s assets or interests, or committing sexual harassment at the workplace as provided in the internal labor regulations.
Third, having been disciplined by salary advancement deferral or demotion and reoffending while the discipline has not been expunged. Fourth, unauthorized absence of 05 cumulative days within 30 days or 20 cumulative days within 365 days counting from the first day of unauthorized absence without legitimate reason (natural disaster, fire, the employee or a relative being sick with confirmation from a competent medical facility, and other cases provided in the regulations).
Handling Principles: The Company Must Prove Fault
Article 122 provides the principles, order and procedures for disciplinary handling. The first and most important principle: the employer must prove the employee’s fault — the burden of proof lies with the company. Every conclusion in the disciplinary decision must rest on evidence collected and cross-checked during the handling process.
Further principles: the grassroots employee representative organization of which the disciplined employee is a member must participate; the employee must be present and has the right to defend themselves, to be defended by a lawyer or a representative organization (persons under 15 must have their legal representative participate); the handling must be recorded in minutes. Multiple disciplinary forms may not be applied for one violation; a person with multiple violations is subject only to the highest form corresponding to the gravest violation.
Limitation Periods: 6 Months, 12 Months and Extension Rules
Article 123 sets the disciplinary limitation period at 06 months from the date of the violation; 12 months for violations directly related to finance, assets, or disclosure of technological or business secrets. The disciplinary decision must be issued within these periods.
The law also anticipates situations where immediate handling is impossible: the employee is on sick or convalescent leave; on leave approved by the employer; in temporary detention or custody; awaiting investigation or verification results from a competent authority for serious conduct; a female employee who is pregnant, on maternity leave or nursing a child under 12 months; a violator suffering from mental illness or another disease causing loss of cognitive or behavioral control. When these “suspension” intervals end and the limitation period has expired or has fewer than 60 days left, the period is extended by no more than 60 days.
Order and Procedures: The Indispensable Meeting
Article 70 of Decree 145/2020/ND-CP guides the four-step process. Step one: when a violation is discovered at the time it occurs, make minutes of the violation and notify the grassroots employee representative organization; if discovered after the fact, collect evidence proving fault. Step two: within the limitation period, notify the mandatory participants of the meeting’s content, time and venue: the employee, the grassroots employee representative organization, and the lawyer or defender if requested by the employee.
Step three: conduct the meeting and make minutes signed by attending participants. Step four: the authorized person issues the handling decision within the prescribed limitation period. In adjudication practice, courts scrutinize the meeting minutes closely: were all participants present, was the employee allowed to present and defend, did the content truly reflect the proceedings. A perfunctory meeting with pre-drafted, coerced minutes is the shortest path to an annulled decision.
Absolutely Prohibited Conduct in Disciplinary Handling
Article 127 lists three groups of prohibited conduct. First, infringing the employee’s health, honor, life, reputation or dignity — including public shaming under the guise of “making an example”. Second, monetary fines or salary deductions in place of disciplinary handling. This is a point many companies violate innocently: deducting salary for lateness or fining for mistakes, unaware that the law absolutely prohibits using financial measures as substitutes for discipline.
Third, disciplining conduct not provided for in the internal labor regulations, not agreed in the concluded contract, or not prescribed by law. This closes the logic of the entire regime: every disciplinary basis must have a clear origin in the regulations, the contract or the law. There is no “village custom” or “boss’s verbal rule” in labor discipline.
Temporary Work Suspension: A Situational Measure
Article 128 allows temporary work suspension when the violation involves complex circumstances and letting the employee continue working would hinder verification. It must be stressed: suspension is not a disciplinary form but a temporary measure serving verification, implemented only after consulting the grassroots employee representative organization.
The duration is no more than 15 days, or 90 days in special cases. During suspension, the employee receives a 50% salary advance; when the period ends, the company must take the employee back to work. If the employee is disciplined, the advanced salary need not be returned; if not disciplined, the employee is paid the full salary for the suspension period.
Expungement of Discipline and Reduction of Serving Time
Article 126 provides a “fresh start” mechanism: a reprimanded person after 03 months, a person with deferred salary advancement after 06 months, or a demoted person after 03 years from the handling date, if not reoffending, is automatically expunged. A person with deferred salary advancement who has served half the period and shows progress may be considered for reduction.
The practical significance is clear in the dismissal ground of “reoffending while discipline is not expunged”: if the second violation occurs after the first discipline has been automatically expunged, the company cannot invoke the reoffending circumstance to escalate to dismissal. HR must track the expungement date of each case precisely.
When the Employee Sues: What the Court Examines
When a disciplinary decision, especially dismissal, is challenged, the court examines in order: the authority of the decision’s signatory under the regulations; the grounds — whether the conduct is provided in the regulations and falls within a case the law allows for that form; the procedure — all steps under Article 70 of Decree 145/2020/ND-CP, full meeting participants, valid minutes; the limitation period for issuing the decision; and proportionality between the form and the violation’s severity.
If the decision is annulled, the company must reinstate the employee, pay wages for the days not worked, and may owe additional compensation. Because the court’s “test” is this strict, FLAT LAW FIRM always recommends consulting a lawyer before issuing a dismissal decision, rather than seeking one only after being sued.
Discipline vs. Contract Termination: A Line to Distinguish
Dismissal is the heaviest disciplinary form, but not every contract termination is discipline. Termination of employment contracts is a broader regime, covering many grounds unrelated to violations: contract expiry, mutual termination agreement, the employee’s unilateral termination, the employer’s unilateral termination for economic reasons.
Confusing the two regimes leads to dangerous mistakes: wanting an employee gone for consistently failing to perform but “pinning” a disciplinary violation on them for a quick dismissal — wrong in substance, easily annulled. Poor performance falls under the employer’s unilateral termination ground, with its own procedures, notice periods and evaluation criteria — not the disciplinary path.
FAQs on Labor Discipline
May the company fine or deduct the salary of a violator?
No. Article 127 strictly prohibits monetary fines and salary deductions in place of disciplinary handling. Any salary deduction beyond cases permitted by law risks being treated as a violation. To handle violations, follow the disciplinary path with the statutory forms.
Can an employee on maternity leave be disciplined?
No. The law prohibits disciplining pregnant female employees, those on maternity leave, and persons nursing children under 12 months. If a violation is discovered during this period, the company waits until the protected period ends, while closely tracking the limitation period so as not to miss the subsequent handling “window”.
Is dismissal by email or verbal notice valid?
Not sufficient. Dismissal requires the full procedure: violation minutes, notification and organization of the handling meeting with full participants, meeting minutes, then issuance of the written decision. A dismissal notification email without a handling meeting is almost certain to be annulled in court.
How many days of unauthorized absence justify dismissal?
Under Article 125: 05 cumulative days within 30 days or 20 cumulative days within 365 days counting from the first day of unauthorized absence without legitimate reason. The company must keep full attendance records and absence verification minutes to prove the days were unauthorized and unjustified.
Must a meeting be organized for a reprimand?
In principle, the handling procedure applies uniformly to all forms, including reprimand. For minor violations, the company should still implement it proportionately: record the violation, discuss with the employee, have the employee representative organization witness, and make minutes. Skipping the procedure because “minor means no meeting needed” is a mistake that can get even a reprimand decision challenged.
FLAT LAW FIRM advises and accompanies companies in all labor discipline situations: reviewing dossiers before issuing dismissal decisions, building standard handling processes, and defending companies in labor disputes. When facing a serious violation case, please contact us before issuing the decision.
