Case: VND 2 Billion Lost Over Unlawful Dismissal Procedure
1. The situation (anonymized)
Company M (a manufacturer, ~300 employees) dismissed Mr. T — Sales Manager, salary VND 60 million/month — for "5 days of unjustified absence within a month." The dismissal decision was signed by the General Director after HR sent a single email notice.
Mr. T sued. The court declared the dismissal unlawful, ordering Company M to reinstate Mr. T and pay total compensation of about VND 2 billion (back pay for nearly 2 years of dispute plus statutory compensation).
Company M's director was stunned: "The 5-day absence was real — how did we still lose?"
2. Legal questions
- Does 5 days' absence automatically justify dismissal?
- What is the lawful dismissal procedure — where did Company M go wrong?
- Why did compensation reach VND 2 billion?
3. Analysis
3.1 "5 days' absence" does not automatically mean dismissal
Art. 125 of the 2019 Labor Code does allow dismissal for 5 cumulative days of unjustified absence within 30 days. But two big "ifs":
- If the act is stipulated in the internal labor regulations (registered with authorities). Company M's regulations only vaguely referenced "serious disciplinary violations" without listing the 5-day absence specifically.
- If the company proves the days were "without legitimate reason." Mr. T produced evidence that 2 of the 5 days involved a family emergency reported to his direct manager by message — unrebutted by the company.
3.2 Three procedural errors that collapsed the dismissal
This was the fatal blow. Under Art. 122 of the 2019 Labor Code, labor discipline requires strict procedure — Company M violated all three:
Error 1 — No lawful disciplinary hearing. The law requires a hearing with the grassroots employee representative organization (usually the grassroots trade union), the employee's right to self-defense or counsel, and written minutes. Company M just sent an email notice then issued the decision — no hearing, no minutes, no employee representative organization in attendance.
Error 2 — Decision beyond the disciplinary limitation period. Art. 123 sets a 6-month disciplinary limitation for misconduct unrelated to finance, assets, or technology/business secrets (12 months maximum for finance-related cases). Company M discovered the matter in early Q1 but issued the decision in September (Q3) — clearly beyond the 6-month limit.
Error 3 — Unauthorized signatory. Company M's own regulations required the Disciplinary Council's opinion for dismissals — but the decision was signed unilaterally by the General Director.
The court concluded: procedural violations are serious; the dismissal decision is void — no need to discuss the merits further.
3.3 Why VND 2 billion?
Under Art. 41 of the 2019 Labor Code, unlawful dismissal requires the employer to:
- Reinstate the employee under the signed contract;
- Pay back wages and social/health/unemployment insurance for days not worked;
- Pay at least 2 months' salary extra.
The math: VND 60 million/month × nearly 24 months of dispute ≈ VND 1.44 billion back pay + VND 120 million (2 months) + retroactive insurances + court fees ≈ VND 2 billion total.
The expensive lesson: each month of prolonged dispute adds a month's salary to compensation. Two years at VND 60 million/month turns the figure into a financial death sentence by itself.
4. Conclusion and recommendations
- 5 days' absence doesn't automatically justify dismissal — regulations must stipulate it and "no legitimate reason" must be proven.
- Procedure is everything: hearing attended by the employee representative organization + defense rights + minutes + within the 6-month limitation + authorized signatory. One missing link collapses the decision.
- Build complete, registered internal labor regulations — list each dismissible act specifically, not vaguely.
- Don't let disputes drag — each month adds a month's salary. Consider early negotiation/mediation.
- Before signing any dismissal decision, have counsel review the full disciplinary file — review costs never match VND 2 billion.
5. Follow-up questions
- An employee stole company property — how to dismiss lawfully?
- Can a mutual termination agreement replace dismissal to cut risk?
- The dismissal is voided but we don't want the employee back — options?
Case anonymized; amounts rounded. Each matter turns on its facts — contact FLAT Law Firm at hotline 0988424851.
6. How the 6-month limitation clock really runs (Art. 123)
The limitation period is the silent killer of disciplinary cases. Under Art. 123 of the 2019 Labor Code, the employer must issue the disciplinary decision within 6 months from the date of the misconduct — not from the date of discovery. For misconduct directly related to finance, assets, or disclosure of technology/business secrets, the maximum is 12 months.
Three practical notes most HR departments miss. First, the clock cannot be paused at will: the law suspends it only in narrow cases (e.g., the employee is on sick leave, on approved leave, in custody, or under investigation). Internal "fact-finding" for months does not stop the clock. Second, if the company misses the deadline, it loses the right to discipline for that misconduct entirely — the decision will be declared void even if the violation is proven. Third, for repeated misconduct, each act has its own limitation period; the company cannot bundle an old, time-barred absence with a recent one to justify dismissal.
The discipline for Company M: build a 6-month countdown into every case file. The day HR receives the violation report, start the clock, schedule the hearing within weeks — not quarters — and keep written proof of every milestone. A dismissal that is substantively right but procedurally late is still an unlawful dismissal, and the compensation meter keeps running.
FAQ
Q: What conditions are required to dismiss an employee?
A: Only Art. 125 cases of the 2019 Labor Code (theft, secret disclosure, 5 days/30 days unjustified absence…) with the act stipulated in registered internal labor regulations.
Q: What is the lawful dismissal procedure?
A: Disciplinary hearing attended by the employee representative organization, employee defense rights, written minutes, decision within the 6-month limitation by authorized signatory (Arts. 122, 123, 2019 Labor Code).
Q: How much is unlawful dismissal compensation?
A: Reinstatement + back pay and insurances for days not worked + at least 2 months' salary (Art. 41, 2019 Labor Code). Longer disputes mean bigger totals.
Q: Does 5 days' absence automatically justify dismissal?
A: No — regulations must stipulate it, "no legitimate reason" must be proven, and full disciplinary procedure followed.
Q: What are the lessons?
A: Complete regulations + proper disciplinary procedure + don't prolong disputes + counsel review before signing dismissal decisions.
References
- 2019 Labor Code 45/2019/QH14 (Arts. 41, 122, 123, 125).
- Cross-checked via thuvienphapluat.vn at drafting (28/9/2026).
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