1.Which positions can be subject to the disciplinary action of removal from office?
Pursuant to the labour law, removal from office is a form of labour discipline, but it can only be applied to Employees who are holding managerial titles in the enterprise. However, the Labor Code currently does not provide regulations over the people who hold managerial titles in an enterprise. Article 23.1.c of the Labor Code prescribes the key contents of an LC on the job to be done by an Employee, but does not provide for his/her title. Therefore, people with managerial titles will be identified by reference to the Enterprise Law with respect to enterprises which are established in accordance with the Enterprise Law.
Article 4.18 of the Enterprise Law prescribes that people with managerial titles in an enterprise include: Company Chairman, Chairman of the Members’ Council, a member of the Board of Management, Director or General Director and individuals holding other managerial positions. The Enterprise Law 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 93, 98, 101, 107 Enterprise Law). Here are some cases of removal from office with respect to individuals who hold managerial titles in enterprises (as listed above) as prescribed by the Enterprise Law:
“Article 93. Removing members of the Members’ Council from office
2. The Chairman and other members of the Members’ Council shall be removed from office in the following cases:
a) The enterprise cannot accomplish the annual planned targets, preserve and develop the investment capital at the request of the owner’s representative body; and no objective reason is given or the objective reason is not accepted by the owner’s representative body;
b) Be prosecuted and declared guilty by a court;
c) Be dishonest in executing the rights and obligations, abuse their positions or use the enterprise’s properties for personal interests or for the benefits of other organisations or individuals; dishonestly report the financial status and production and business performance.”
“Article 107. Removing Inspectors from office
2. Inspectors shall be removed from office in the following cases:
a) Be not able to accomplish the assigned tasks or jobs;
b) Not exercising his or her rights and duties in 3 consecutive months, except in force majeure;
c) Commit serious repeated violations of an Inspector’s obligations prescribed in this law and the Company Charter;
d) Other cases stipulated in the charter of the company.”
For public servants and officials in particular, as prescribed in Article 13 of Decree 34/2011/NĐ-CP on disciplining public servants and Article 12 of Decree 27/2012/NĐ-CP on disciplining officials and their liabilities for compensations and returns, the disciplinary action of removal from office can only be applied to public servants and officials who hold leadership or managerial titles. Therefore, in the spirit of the law, applicable to either public servants, officials working for state agencies, non-business units or Employees 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 organisations.
2. How are the salary, bonus and insurance regime that Employees are entitled to after they are disciplined in form of removal from office?
A salary is an amount which is based on the agreement in LCs between Employers and Employees or in employment contracts between officials and leaders of public non-business units, and for public servants, a salary will be calculated based on the salary factor corresponding to each position. And the law does not prescribe that the consequence of a removal from office is a decrease in salary or welfare. However, according to the rule of fairness in pay “Employees will be paid according to their positions/titles”, it is fair for Employees to receive the salaries & welfare of their new positions (allowances, SI, days off etc.) when they are removed from office. It will be unreasonable when Employees are removed from office but still receive the same salaries with their previous positions. In practice, the removal from office (for those who hold managerial titles) will cause the salaries of public servants, officials and Employees to change as follows:
- For public servants: the new salary will be calculated based on the salary factor corresponding to the new position; and
- For Employees working for enterprises which are established under the Enterprise Law/Officials: New LCs/employment contracts will be signed, in which new jobs and salaries will be specified by the parties.
Regarding pay raises or annual bonus reviews, the determination of levels of pay raise or bonus will be based on the Regulations on salary and bonus or the ILRs. For example: “pay raises and annual bonus reviews will be postponed or not be implemented for Employees who are currently subject to a disciplinary action”. This regulation is appropriate because for Employees who are currently subject to disciplinary actions, Employers need time to monitor their progress or to know if they will “repeat” the violation or involve in a more serious case of violation. That is the reason why it is more reasonable 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 Enterprise Law or the aforesaid documents, and then the salary, bonus and welfare regimes will be re-negotiated. In addition, upon the end of the disciplinary period, if Employees do not repeat the violation, their titles will be restored together with the previous salaries and welfare regimes.