Short answer: not necessarily. “An employee committed a crime while performing tasks” is merely a factual circumstance. The company is criminally prosecuted only when the four conditions of Article 75 of the Criminal Code are met and the offence is within Article 76 — criteria that apply uniformly, regardless of whether the offender is a CEO or an employee. The more common scenario for rank-and-file employees is: the company bears only civil compensation liability under Article 597 of the Civil Code.
This article takes the employee angle — focusing on the scope of “assigned tasks” in the language of Article 597 of the Civil Code, distinct from the article on managers/executives.
1. The common filter: Articles 75 + 76
Whoever the offender is, the company bears criminal liability only when the conduct simultaneously satisfies the four conditions of Article 75(1) of the Criminal Code (consolidated document 135/VBHN-VPQH, 05/9/2025):
- (a) in the name of the legal entity;
- (b) for the benefit of the legal entity;
- (c) directed, managed, or approved by the legal entity;
- (d) within the statute of limitations;
and the offence is among the 33 offences in Article 76 of the Criminal Code.
One point to note: rank-and-file employees typically lack authority to act in the entity’s name or direct it, so condition (c) is harder to satisfy than in a CEO case. Unless it is proven that management directed or approved the act, the company is rarely prosecuted for an employee’s crime.
2. When is the company prosecuted for an employee’s crime?
Employee commits a crime under direction, for the company’s benefit → the company may be prosecuted. When it is proven that the act was in the entity’s name, for the entity’s benefit, and directed/managed/approved by the entity (through its managers) — Article 75 is satisfied. The company and the individuals involved then bear independent liability (Article 75(2) of the Criminal Code).
Example (illustrative): A warehouse manager directs a delivery employee to sign false documents so the company evades tax. If Article 75 is satisfied and the offence is within Article 76, the company may be prosecuted as a legal entity, while the manager and the employee are prosecuted individually according to their respective roles.
3. When is the company not criminally prosecuted?
Employee acts on their own (self-serving, beyond assigned tasks) → the company is not criminally prosecuted. Such cases lack condition (b) “for the benefit of the legal entity” and (c) “directed/managed/approved by the legal entity.”
Example (illustrative): A sales employee abuses delivery duties to transport contraband for another individual’s benefit. This is self-serving and beyond assigned tasks — the company is not criminally prosecuted; only the employee is criminally liable as an individual.
4. The most common scenario: the company compensates civilly — regardless of prosecution
The key point against a common mistake: “performing tasks” is the language of civil liability (Article 597 of the Civil Code), not the sole criterion of criminal liability.
Article 597 of the Civil Code (91/2015/QH13) provides: a legal entity must compensate for damage caused by its people while performing tasks assigned by the entity; a legal entity that has paid compensation may require the at-fault person to reimburse an amount in accordance with the law.
The practical consequence — “the company pays first, recovers later”:
- The company must compensate the injured third party, regardless of whether a criminal case is initiated — this is independent civil liability;
- After paying, the company may require the at-fault employee to reimburse. Note: the reimbursement is “in accordance with the law” — Article 597 sets no fixed formula; no reimbursement ratio should be invented.
Interpretive note: the phrase “pays first regardless of whether that person was at fault” is doctrinal interpretation, not the literal text of Article 597 — the text states only two elements (“its people” + “while performing tasks assigned”); fault enters at the reimbursement stage.
5. In a criminal case, how is compensation handled?
- Article 30 of the Criminal Procedure Code (consolidated document 104/VBHN-VPQH, 27/8/2025): compensation in a criminal case is resolved together with the case;
- The company may participate in proceedings as a civil defendant or a person with related rights and obligations;
- The offender’s compensation obligation in criminal cases (Article 48) applies to a convicted legal entity through Article 82 of the Criminal Code (judicial measures against commercial legal entities).
6. An open boundary: does “the entity’s people” include independent contractors?
The phrase “the entity’s people” in Article 597 should not be stretched to include independent contractors or collaborators not subject to the entity’s management — this boundary is determined by courts based on the actual relationship in each case and remains contested in practice. This article records it as such, without further assertion.
FAQ
Q: An employee committed a crime during working hours — is the company automatically prosecuted?
A: No. The Article 75 + Article 76 filter must be passed. The common scenario is that the company bears only civil compensation liability (Article 597, Civil Code), unless management’s direction/approval is proven.
Q: After compensating the victim, can the company recover from the employee?
A: Yes. Article 597 of the Civil Code allows the legal entity to require the at-fault person to reimburse an amount in accordance with the law.
Q: If no criminal case is initiated, must the company still compensate?
A: It may still have to — civil liability under Article 597 is independent and does not depend on criminal prosecution.
Legal sources
- Criminal Code 2015 — consolidated document 135/VBHN-VPQH (05/9/2025) — Articles 75, 76, 82 — in force (incorporating amendments by Law 86/2025/QH15, promulgated 25/6/2025, effective 01/7/2025)
- Civil Code 91/2015/QH13 — Article 597 — in force
- Criminal Procedure Code — consolidated document 104/VBHN-VPQH (27/8/2025) — Articles 30, 48 — in force
- Full texts: thuvienphapluat.vn (accessed 14/10/2026)
For advice on your company’s specific situation, please contact us via the Contact page of this website.
Transparency note: this draft is under internal review and has not been published. It is for general information only and does not replace legal advice for a specific case; it is not a lawyer’s opinion and is not marked as “reviewed by a lawyer”.
For reference only, not legal advice. Content quality-checked by the AI Legal Council; not yet reviewed by a human lawyer.