CONSULTATION ON RESOLUTION OF PROBATION CONTRACT DISPUTE

Case Summary:

A.C. Corporation (hereinafter referred to as “A.C.”) is a regular client of TAPHALAW.

On February 15, 2024, A.C. entered into a probation contract with Ms. X for the position of Deputy Sales Manager. The probationary period was set for two months, from February 15, 2024, to April 15, 2024. During the probationary period, A.C. assessed Ms. X as understanding the job but with low work performance and failure to meet the company’s KPIs. However, A.C. still wanted to retain Ms. X and proposed a new employment contract with a monthly salary of 45 million VND (while the initial agreed salary in the probation contract was 60 million VND). Ms. X did not agree to this proposal. Subsequently, the two parties attempted to negotiate multiple times via email but failed to reach a mutual agreement.

It is noted that upon expiration of the probationary period, A.C. did not send Ms. X a notification of the probationary results. After April 15, 2024, Ms. X continued to work at the company. A.C. continued to assign work to Ms. X as usual and responded to her daily work reports. On April 25, 2024, A.C. decided to terminate the probation contract and paid Ms. X all accrued wages. This caused Ms. X to react strongly, continuously sending emails to protest and express dissatisfaction with the company’s management.

On April 28, 2024, A.C. received a letter from a law firm representing Ms. X’s interests. The letter stated that A.C. had unilaterally terminated the labor contract in violation of the law and made the following demands: (i) Rehire Ms. X; (ii) Pay wages and contribute to social insurance, health insurance, and unemployment insurance for the days that Ms. X was not allowed to work; (iii) Compensate Ms. X an amount equivalent to two months’ salary.

Client’s Request:

Company A.C., the subject of the aforementioned matter, is a client of TAPHALAW. Company A.C. has only recently entered into a recurring legal advisory services agreement with TAPHALAW for a period of three months. Upon contacting TAPHALAW’s legal counsel, the representative of Company A.C. has requested the following legal advice: (1) Whether the demands made by Ms. X are in compliance with the applicable laws and regulations; and (2) To draft a response to the letter sent by Ms. X on April 22, 2024.

Attorney’s Work Performed:

1. Dispute Resolution Advisory:

Attorney prepared a legal opinion for Company A.C, analyzing relevant legal provisions, evaluating the evidence on file, and reviewing the claims made by Ms. X. In its legal opinion, attorney concluded that: (i) an employment contract existed between Company A.C and Ms. X; (ii) Company A.C had unilaterally terminated the employment contract unlawfully; and (iii) Ms. X’s claims were well-founded under Article 41 of the Labor Code 2019 regarding the employer’s obligations when unilaterally terminating an employment contract unlawfully.

Based on the foregoing legal assessment, attorney proposed a dispute resolution strategy with Ms. X, encouraging Company A.C to negotiate a termination agreement with her. Attorney advised that if the dispute escalated to litigation, a court could annul Company A.C’s unlawful termination decision, resulting in adverse legal consequences as stipulated in Article 41 of the Labor Code 2019.

2. Recommendations to Prevent Similar Cases:

In light of the dispute with Ms. X, attorney made several recommendations to Company A.C to improve its labor management practices and prevent future disputes, including: (i) carefully monitoring and evaluating probationary performance before the probationary period ends; and (ii) notifying employees at the end of the probationary period who do not meet the recruitment requirements that their employment will not be continued and that contract negotiations may be considered at a later date.

3. Assistance in Dispute Resolution Meetings:

Following attorney’s advice, Company A.C decided to negotiate a termination agreement with Ms. X and requested attorney’s assistance in the negotiation process. Recognizing the urgency of resolving the matter, attorney promptly drafted a letter to Ms. X proposing a meeting to discuss a mutually agreeable resolution.

At the meeting, tensions were initially high as Ms. X expressed her dissatisfaction with the termination. Attorney and Company A.C representatives listened to Ms. X’s concerns for over an hour, after which attorney and Ms. X’s counsel engaged in discussions to reach a settlement. The meeting concluded with a successful negotiation, allowing both parties to avoid further harm.

Case Consultation Outcome:

The parties have reached a mutual agreement. Company A.C and Ms. X have consented to terminate the employment contract and have jointly agreed to resolve any issues arising from such termination. During the meeting, TAPHALAW’s attorney promptly drafted an employment termination agreement, documenting the terms mutually agreed upon by both parties. This agreement was reviewed and approved by the authorized representatives of Company A.C and Ms. X during the meeting, and both parties have consented to execute the agreement as a basis for implementation.