- Which position can be subject to the disciplinary action of removal from office?
Pursuant to the Labour Code, removal from office is a form of labour discipline, but it can only be applied to any Employee who is holding a managerial title in the enterprise. However, the Labour Code does not provide regulations over the people who hold managerial titles in an enterprise. Article 21.1.c of the Labour Code does prescribe the material clauses of a LC on the job to be done by an Employee but does not prescribe any content related to his or her title in the enterprise. Therefore, people with managerial titles will be identified by reference to the relevant regulations of the Law on Enterprises with respect to enterprises that are established in accordance with the Law on Enterprises.
Article 4.24 of the Law on Enterprises prescribes that people with managerial titles in an enterprise include: Company Chairman, Chairman of the Members’ Council, members of the Member’s Council, Director or General Director and individuals holding other managerial positions according to the Company Charter. The Law on Enterprises also prescribes the cases where the disciplinary action of removal from office is applied to people who hold the said managerial titles, such as removing members of the Members’ Council, Company Chairman, Director/General Director, and Inspectors from office (Articles 94, 99, 102, 108 of the Law on Enterprises).
For civil servants and public employees in particular, as prescribed in Article 12 of Decree 112/2020/NĐ-CP of Government on disciplining civil servants and Article 12 of Decree 27/2012/NĐ-CP on disciplining public employees and their liabilities for compensations and returns, the disciplinary action of removal from office can only be applied to civil servants and public employees who hold leadership or managerial titles. Therefore, in accordance with the spirit of the law, applicable to either civil servants, public employees working for state agencies, non-business units or any Employee working for enterprises, the disciplinary action of removal from office will only be applied to individuals who hold a certain title or power in their agencies, organisations.
2. How to pay the salary, bonus, and insurance regime which the Employee is entitled to after he or she is disciplined in form of removal from office?
A salary is an amount that is based on the agreement in a LC between the Employer and the Employee or in employment contracts between public employees and the head of public non-business entities, and for civil servants, a salary will be calculated based on the salary factor corresponding to each position, title. In addition, the relevant law does not prescribe that the consequence of removal from office is a decrease in salary or welfare. However, according to the rule of fairness in pay “the Employee will be paid according to his or her position/title”, it is fair for the Employee to receive the salary and welfare of his or her new position (allowances, SI, days off etc.) when he or she is removed from office. It will be unreasonable when the Employee is removed from office but still receives the same salary as his or her previous position. In practice, the removal from office (for those who hold managerial titles) will cause the change of salaries of civil servants, public Employees and the Employee as follows:
- For civil servants: the new salary will be calculated based on the salary factor corresponding to the new position; and
- For any Employee working for an enterprise that is established under the Law on Enterprises/public Employees: New LC/employment contract will be signed, in which new agreed job and salary will be specified by the parties.
Regarding pay raises or annual bonus reviews, determining the levels of pay raise or bonuses will be based on the Regulations on salary and bonus or the ILR of the enterprise. For example: “pay raises and annual bonus reviews will be postponed or not be implemented for the Employee who is currently subject to a disciplinary action”. This regulation is appropriate because, for the Employee who is currently subject to a disciplinary action, the Employer needs time to monitor his or her progress or to know if he or she will “repeat” the violation or get involved in a more serious case of violation. That is the reason why it is more reasonable for the Employer to postpone the pay raise or bonus review during this time.
In general, the disciplinary action of removal from office may only be applied to those who hold certain titles or powers in their organisations as prescribed in the Law on Enterprises or the aforesaid documents, and then the salary, bonus and welfare regimes will be re-negotiated. In addition, regarding principle, upon the end of the disciplinary period, if the Employee does not relapse, his or her title will be restored together with the previous salary and welfare regimes by the Employer.