Labor Discipline and Dismissal in Vietnam: Procedures and Evidence

One morning, HR submits a proposal to the Director: sales employee X is accused of discount fraud, with a recommendation to terminate him the same day. The Director signs; the employee's badge is collected, system access cut, and a dismissal decision arrives after a 20-minute meeting without the union. Six months later, the court declares the dismissal unlawful for two defects: the company's internal labor regulations were unregistered and thus ineffective, and the disciplinary meeting lacked a proper minutes. The company must reinstate the employee, pay back wages, and spent months resolving the dispute. This story is not rare: most dismissals declared unlawful lose not on the reason but on the procedure. This article is a comprehensive guide to lawful labor discipline and dismissal: the legal framework, the 5-step procedure, how to prepare evidence, and the most common employer mistakes.

Table of contents

• 1. What is labor discipline? Who should care?
• 2. Current legal framework
• 3. The lawful 5-step disciplinary procedure
• 4. Four disciplinary forms and four dismissal grounds
• 5. Internal labor regulations: the prerequisite for valid discipline
• 6. How to prepare evidence for discipline and dismissal
• 7. Limitation periods, deadlines, and key milestones
• 8. Common employer mistakes
• 9. Quick checklist
• 10. Frequently asked questions
• 11. When to work with a lawyer

1. What is labor discipline? Who should care?

Under Article 117 of the 2019 Labor Code, labor discipline is the set of rules on observing working time, technology, and production/business management issued by the employer in the internal labor regulations and as provided by law. In other words, it is the system of rules a business sets to maintain production order, with sanctions for employee violations.

This article serves two main audiences. First, business owners, HR directors, and in-house counsel: those who sign disciplinary decisions and bear legal liability if the decision is wrong. Second, employees: to know their rights when disciplined, when an employer may dismiss them, and when they can complain or sue.

Three often-confused concepts must be distinguished. Labor discipline is the company's internal administrative sanction, applied when an employee violates the internal regulations. Material liability (Article 129) is the duty to compensate property damage: where the damage does not exceed 10 months of regional minimum wage, compensation is capped at 3 months' salary; but where lost tools, equipment, consumables, or entrusted property are lost or unaccounted for, full compensation is required. These two sanctions may be applied simultaneously without conflict. Dismissal is not an ordinary termination of the labor contract: it is the heaviest disciplinary form, permitted only in the cases specifically listed in Article 125. Confusing these three concepts is a common reason dismissal decisions are declared unlawful.

2. Current legal framework

Three core instruments govern this area:

• The 2019 Labor Code (No. 45/2019/QH14), in force since 1 January 2021. Chapter VIII is the foundation: Article 117 (definition of labor discipline), Articles 118–120 (internal labor regulations and registration), Article 121 (effectiveness of regulations), Article 122 (principles and procedure), Article 123 (limitation), Article 124 (disciplinary forms), Article 125 (dismissal cases), Article 126 (removal of discipline), Article 127 (prohibited acts), Article 128 (work suspension), and Article 129 (compensation for damage — Section 2, Material liability).
• Decree 145/2020/ND-CP, detailing and guiding implementation of certain Labor Code articles on working conditions and labor relations, in force since 1 February 2021. Article 69 details internal labor regulations and Article 70 sets the procedure for disciplinary meetings (including the mandatory notice of at least 5 working days before the meeting).
• Decree 283/2026/ND-CP, on administrative sanctions in labor, social insurance, and Vietnamese working abroad under contract, issued 15 July 2026 and effective 10 September 2026, replacing Decree 12/2022/ND-CP. Article 25 is the one employers must memorize: it lists fines for violations of labor discipline and material liability (paragraph 1: VND 1,000,000–3,000,000; paragraph 2: VND 5,000,000–10,000,000; paragraph 3: VND 20,000,000–40,000,000 — the stated fines apply to individuals; organizations pay double under Article 7).

Note a commonly confused instrument: Decree 28/2020/ND-CP on administrative sanctions in labor is no longer in force and was previously replaced by Decree 12/2022/ND-CP; since 10 September 2026, Decree 12/2022/ND-CP has also expired and been replaced by Decree 283/2026/ND-CP. When looking up fine levels, use Decree 283/2026, not the old figures.

3. The lawful 5-step disciplinary procedure

The law provides no fixed template for discipline, but Article 122 of the 2019 Labor Code sets mandatory principles and procedure. Breach of any link puts the disciplinary decision at risk of being declared unlawful. In practice it can be packaged into 5 steps.

Step 1: Detect the violation, do a preliminary check, and verify limitation

Upon receiving a report of misconduct, the first move is not summoning the employee but checking two things: whether the conduct is provided for in the internal labor regulations (or agreed in the labor contract, or provided by labor law), and whether it is still within the disciplinary limitation period.

Article 127 strictly prohibits disciplining an employee for conduct not provided in the internal labor regulations or not agreed in the concluded labor contract, or not provided by labor law. This means the regulations are the "map" of every disciplinary decision: conduct absent from the regulations cannot be disciplined, however damaging in fact. So before doing anything else, open the regulations and cross-check.

On limitation, Article 123 provides: the disciplinary limitation is 6 months from the date of the violation; for violations directly related to finance, assets, disclosure of technological or business secrets, it is 12 months. Where the Article 122(4) prohibited periods expire and limitation has run out or remains but with fewer than 60 days left, limitation may be extended — but by no more than 60 days. The employer must issue the disciplinary decision within this period. A decision issued after limitation has expired is void.

Step 2: Collect and consolidate evidence

This step decides the case's fate, because Article 122(1) requires the employer to prove the employee's fault. The burden of proof lies on the company, not the employee. Evidence preparation details are in Section 6, but the point must be made now: do not start the disciplinary meeting with a thin file, because every gap here is magnified later.

Step 3: Notify and invite to the disciplinary meeting

The employer must notify in writing the employee and the grassroots employee representative organization of which the employee is a member of the meeting's time and venue. Mandatory milestone: Article 70(2)(a) of Decree 145/2020/ND-CP requires the notice to be served at least 05 working days before the meeting date (counted in working days, excluding weekly rest days and public holidays), stating the content, time, venue, the disciplined employee's name, and the misconduct, and ensuring the required attendees receive it before the meeting. Late notice is a procedural violation that can render the disciplinary decision unlawful. The notice should be in writing with proof of delivery (work email, hand delivery with signature, or posting in combination). Where a required attendee cannot attend at the notified time and venue, the two sides agree a change; failing agreement, the employer decides the time and venue.

Step 4: Conduct the disciplinary meeting

The meeting must satisfy Article 122(1) conditions:

• The employee must be present and may defend themselves, be defended by a lawyer or the employee representative organization. Where the employee is under 15, their legal representative must participate.
• The grassroots employee representative organization of which the employee is a member must participate.
• The meeting's content must be recorded in minutes, adopted before the meeting closes, and signed by attendees. Where someone refuses to sign, the minute-taker records their name and reason for not signing (if any) in the minutes.

One point employers often miss: the law does not prohibit holding the meeting where a required attendee is absent after proper notice without confirmation of attendance. But if the company cannot prove proper notice, the in-absentia meeting is a procedural violation.

Step 5: Issue the decision and send it to the parties

Within the Article 123 disciplinary limitation, the competent disciplining authority issues the disciplinary decision and sends it to the required meeting attendees. The decision should state: the legal basis (the regulation clause violated, the law article applied), the specific misconduct, the supporting evidence, the disciplinary form, and the effective date. Dismissal decisions must additionally meet the permitted dismissal cases of Article 125.

Additionally, Article 122(4) sets periods when labor discipline may not be imposed: employees on sick or convalescence leave; on leave approved by the employer; under temporary detention or custody; awaiting the competent authority's investigation and conclusion on the conduct under Article 125(1) and (2). Issuing a decision during these periods is a procedural violation however correct the substance.

4. Four disciplinary forms and four dismissal grounds

Article 124 of the 2019 Labor Code provides 4 forms of labor discipline, in ascending severity:

1. Reprimand — the lightest, for first-time, minor violations.
2. Deferral of salary raise for no more than 6 months — directly affects income and career progression.
3. Demotion — for employees holding managerial or executive positions.
4. Dismissal — the heaviest, ending the labor relationship.

The specific form for each conduct must be provided in the internal labor regulations. The employer may not unilaterally apply a heavier form than the regulations prescribe for that conduct, nor apply multiple disciplinary forms for one violation.

Dismissal is regulated separately in Article 125 and applies only in 4 cases:

1. Theft, embezzlement, gambling, intentional injury, or drug use at the workplace. The phrase "at the workplace" matters: conduct elsewhere does not fall under this case, though it may violate the regulations in other respects.
2. Disclosure of business or technological secrets, infringement of the employer's intellectual property, causing serious damage or threatening especially serious damage to the employer's property or interests, or sexual harassment at the workplace as provided in the internal labor regulations. Note: the law does not quantify the monetary threshold of "serious" or "especially serious" damage. To avoid disputes, employers should quantify these thresholds in the regulations (e.g., damage from how many months' salary counts as serious). Sexual harassment must also be provided in the regulations to ground dismissal.
3. Recidivism while a salary-raise deferral or demotion discipline remains unremoved. Recidivism is repeating the disciplined conduct before it is removed under Article 126. Note: the repeated conduct must be the previously disciplined conduct, not just any new violation.
4. 5 cumulative days of unauthorized absence within 30 days, or 20 cumulative days within 365 days from the first day of unauthorized absence, without proper reason. Proper reasons include natural disasters, fires, illness of the employee or relatives certified by a competent medical facility, and other cases provided in the regulations.

On removal of discipline, Article 126 provides: reprimand after 3 months, salary-raise deferral after 6 months, or demotion after 3 years from the disciplinary date — automatically removed if no further violation. An employee under salary-raise deferral who has served half the period and shows improvement may be considered for early reduction by the employer.

5. Internal labor regulations: the prerequisite for valid discipline

As analyzed in Step 1, internal labor regulations are the foundation of every disciplinary decision. Under Article 118(1), the employer must issue internal labor regulations; if employing 10 or more employees, the regulations must be in writing. Before issuing or amending them, the employer must consult the grassroots employee representative organization where one exists.

For employers with 10+ employees, the regulations must also be registered. Article 119(1) requires registration with the provincial specialized labor authority where the employer is business-registered. Within 10 days of issuing the regulations, the employer must file for registration (Article 119(2)). The dossier includes: the registration request; the regulations; comments of the grassroots employee representative organization (if any); employer documents on labor discipline and material liability (if any) — per Article 120. Within 7 working days of receiving a complete dossier, if the regulations contain unlawful provisions, the labor authority notifies, guides amendments, and re-registration follows (Article 119(3)).

Under Article 121 of the 2019 Labor Code, internal labor regulations take effect 15 days after the competent labor authority receives a complete valid registration dossier. In practice, however, many authorities only acknowledge receipt without issuing a separate confirmation, so employers should keep full proof of filing (receipts, acceptance slips) to establish this milestone in disputes.

Regulations must contain a labor discipline section: listing violations and corresponding forms. The golden rule is the more detailed the safer: each violation should be described specifically and tied to a clear disciplinary form. The vaguer the regulations, the harder it is to prove the employee's conduct falls within a provided case.

Administrative fines relating to regulations are set in Article 25 of Decree 283/2026/ND-CP (effective 10 September 2026, replacing Decree 12/2022/ND-CP). Fines of VND 1,000,000–3,000,000 for: failing to communicate the regulations to all employees or post key contents at necessary workplace locations (paragraph 1). Fines of VND 5,000,000–10,000,000 for: lacking written regulations when employing 10+ employees; failing to register as required; failing to consult the grassroots employee representative organization before issuing or amending regulations; using ineffective or expired regulations; disciplining or claiming compensation not in the proper order, procedure, or limitation (paragraph 2). Note: these fines apply to individual violators; organizational violators pay double (Article 7(1) of Decree 283/2026/ND-CP).

6. How to prepare evidence for discipline and dismissal

Because the burden of proof rests on the employer, the evidence file should be built from the moment the violation is detected, not gathered at the last minute before the meeting. A solid file typically includes:

• Documents proving the misconduct: minutes drawn up at detection (signed by witnesses); inventory and financial reconciliation reports where assets are involved; system extracts (access logs, transaction history, attendance data); camera images and video (ensuring installation and use comply with data protection and employee privacy rules); related emails, messages, and documents.
• Statements and confirmations: the violating employee's written account (if any); witness statements and accounts of those who detected the violation; direct managers' opinions.
• Background legal documents: the registered internal labor regulations (with registration and effectiveness proof); the employee's labor contract; prior disciplinary decisions (for recidivism cases); meeting notices and disciplinary meeting minutes.
• Damage proof (where invoking Article 125(2)): valuation reports, invoices, documents showing the damage level; comparison against the "serious" threshold quantified in the regulations.

Three principles for gathering evidence. First, timeliness: the closer to the violation, the stronger the evidence. Second, legality: evidence obtained by unlawful means (privacy invasion, coerced statements) may be excluded and backfire on the company. Third, continuity: the evidence chain must be unbroken from conduct to consequence. A logical gap in the chain is the first thing the employee's lawyer will exploit.

For unauthorized-absence dismissals especially, keep complete attendance records, verification minutes of unexplained absence (contact attempts, requests for explanation), and accurately compute cumulative days within the 30-day or 365-day frames. Many dismissals are declared unlawful simply because the employer miscalculated the timeframe or failed to prove the employee was given a chance to explain.

7. Limitation periods, deadlines, and key milestones

Summary of key legal timeframes in discipline:

• Disciplinary limitation: 6 months from the violation date; 12 months for violations directly related to finance, assets, disclosure of technological or business secrets. Extension of no more than 60 days in the Article 123(2) case.
• Automatic removal of discipline: reprimand after 3 months; salary-raise deferral after 6 months; demotion after 3 years (from the disciplinary date), if no further violation.
• Notice of the disciplinary meeting: at least 05 working days before the meeting date (Article 70(2)(a) of Decree 145/2020/ND-CP).
• Filing regulations for registration: within 10 days of issuing the regulations (employers with 10+ employees).
• Regulations take effect: 15 days after the labor authority receives a complete valid dossier (Article 121 of the 2019 Labor Code).
• Work suspension (Article 128): where the violation case is complex and the employee's continued work would hinder verification, the employer may suspend the employee after consulting the grassroots employee representative organization. Suspension may not exceed 15 days, or 90 days in special cases. During suspension, the employee is advanced 50% of the salary before suspension.

On costs, the law sets no state fee for internal discipline. The costs to budget are legal costs when disputes arise (counsel, litigation) and administrative fines for procedural violations (VND 5,000,000–10,000,000 for individuals, doubled for organizations under Article 25 of Decree 283/2026/ND-CP). Where a dismissal is declared unlawful, beyond the obligations to reinstate and pay wages for days not worked under the law and practice, the company faces the opportunity cost of workforce instability and reputational harm. For service fees tailored to each case, contact FLAT at hotline 0988424851.

8. Common employer mistakes

Mistake 1: Disciplining under unregistered or ineffective regulations. The most common error among SMEs. The company has written regulations with clear provisions, but never registered them, or registered yet disciplined before the regulations took effect. Result: the entire disciplinary decision lacks basis. Prevention: register immediately upon issuing, keep filing receipts, and only discipline after the regulations are effective.

Mistake 2: Fining or deducting salary instead of disciplining. Many employers dock pay for lateness or impose cash "fines" for rule violations as a quick fix. This is prohibited by Article 127(2) and sanctioned under Article 25(3)(c) of Decree 283/2026/ND-CP. Prevention: for time-keeping violations, apply lawful disciplinary forms (reprimand, deferred raise) per the regulations.

Mistake 3: Disciplining during prohibited periods. Issuing decisions while the employee is on sick leave, maternity leave, under detention, or awaiting investigation conclusions on Article 125(1)–(2) conduct. Violates Article 122(4). Prevention: before signing, re-check the employee's status; if in a prohibited period, pause and recalculate limitation.

Mistake 4: Meetings without the union or without minutes. The meeting has full attendance but no minutes, or minutes drawn days later without the required signatures. In court, the company cannot prove it followed procedure. Prevention: prepare a minutes template before the meeting, adopt and sign it immediately at close; record names and reasons for non-signers.

Mistake 5: Dismissing for reasons outside the 4 cases of Article 125. Repeated lateness, poor performance, not fitting in — none directly ground dismissal. Many employers "shoehorn" these into Article 125(2) (serious damage) without proving the damage level. Prevention: for non-Article-125 violations, apply only lighter forms per the regulations; to end the relationship, consider other lawful termination grounds.

Mistake 6: Applying multiple disciplinary forms for one conduct. E.g., both reprimand and deferred raise for the same violation. The law does not allow this. Prevention: one violation, one disciplinary form; aggravation must rest on recidivism under Articles 125 and 126.

Mistake 7: Missing the disciplinary limitation. The violation was detected months ago but the company hesitated, issuing the decision after the 6-month (or 12-month) limitation expired. Prevention: upon detection, record it in writing and start the process; track limitation as a hard deadline.

9. Quick checklist

• [ ] The violation is provided in the internal labor regulations (or labor contract, labor law)
• [ ] The regulations are registered and effective (employers with 10+ employees)
• [ ] Still within the disciplinary limitation (6 months / 12 months / extension ≤ 60 days)
• [ ] Not a prohibited period (illness, maternity, detention, awaiting investigation conclusion)
• [ ] Evidence file is complete, proving the employee's fault
• [ ] Written meeting notice sent to the employee and the grassroots employee representative organization AT LEAST 05 working days before the meeting (Article 70(2)(a) of Decree 145/2020/ND-CP)
• [ ] Meeting includes the employee (or defender), the union, minutes signed immediately
• [ ] For dismissal: conduct falls in one of the 4 cases of Article 125 of the 2019 Labor Code
• [ ] One conduct, one disciplinary form only
• [ ] Decision issued within limitation and sent to meeting attendees

10. Frequently asked questions

Can a company dismiss an employee for repeated lateness? Not directly for lateness alone. Dismissal applies only in the four cases of Article 125 of the 2019 Labor Code. Repeated lateness may be handled by reprimand or deferred salary raise under the internal labor regulations. The only absence-related dismissal the law permits is unauthorized absence of 5 cumulative days within 30 days or 20 cumulative days within 365 days without proper reason — provided the company proves the days and gave the employee a chance to explain.

May an employer fine employees instead of disciplining them? No. Article 127(2) of the 2019 Labor Code prohibits fines and salary deductions in place of labor discipline. Violations face administrative fines of VND 20,000,000–40,000,000 for individuals (doubled for organizations) under Article 25(3)(c) of Decree 283/2026/ND-CP. To address violations, employers must apply lawful disciplinary forms in the proper procedure.

What rights does an unlawfully dismissed employee have? The employee may complain to the competent authority or sue in the People's Court. On legal consequences, the 2019 Labor Code has no dedicated provision for unlawful dismissal; in adjudication practice, courts often apply Article 41 by analogy: ordering the employer to reinstate the employee, pay wages for days the employee was not allowed to work, and pay at least 2 additional months' salary. However, each case's outcome depends on the court's assessment of the specific file, so both employees and employers should consult counsel before suing or responding to a suit.

Must a 5-employee company issue internal labor regulations? Yes — internal labor regulations are still required under Article 118(1) of the 2019 Labor Code, but they need not be in writing and need not be registered with the labor authority. The registration duty with the provincial specialized labor authority applies only to employers with 10+ employees (Article 119(1)). Still, even small businesses should keep written regulations as a clear disciplinary basis and avoid disputes.

Is an employee dismissed for discipline entitled to unemployment allowance? Possibly, if all conditions of Article 38 of the 2025 Employment Law (No. 74/2025/QH15) are met: the labor contract has ended, unemployment insurance contributions have reached at least 12 months within the 24 months before termination (36 months for fixed-term contracts of 1 to under 12 months), the application is filed within 3 months of contract termination, and within 10 working days of filing a complete dossier the employee does not fall into the statutory exclusions (new employment subject to compulsory social insurance, military service, study exceeding 12 months, detention or imprisonment, etc.). Disciplinary dismissal is not among the exclusions from unemployment allowance.

11. When to work with a lawyer

Companies should engage a labor lawyer when any of these signs appear:

• Preparing to dismiss in complex cases (suspected financial fraud, trade secret disclosure, sexual harassment) — where both evidence and procedure carry high risk.
• Internal labor regulations are unregistered or outdated against the 2019 Labor Code — needing review and update before any discipline.
• A disciplinary decision has been issued but the employee complains or sues — needing a legality reassessment and response strategy.
• Foreign-element businesses (FDI) — needing disciplinary procedures compliant both with Vietnamese law and group compliance standards.

FLAT Law Firm advises comprehensively on labor discipline and dismissal: drafting and registering internal labor regulations; designing internal disciplinary procedures; reviewing evidence files before decisions; representing companies in complaints and labor disputes. Contact hotline 0988424851 for case-specific advice.

References

• 2019 Labor Code (No. 45/2019/QH14), in force since 1 January 2021.
• Decree 145/2020/ND-CP detailing and guiding implementation of certain Labor Code articles on working conditions and labor relations, in force since 1 February 2021.
• Decree 283/2026/ND-CP on administrative sanctions in labor, social insurance, and Vietnamese working abroad under contract, issued 15 July 2026, effective 10 September 2026, replacing Decree 12/2022/ND-CP.
• 2025 Employment Law (No. 74/2025/QH15), effective 1 January 2026, replacing the 2013 Employment Law.

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