CONSULTATION ON REASSIGNMENT OF AN EMPLOYEE, SUSPENSION OF A EMPLOYMENT CONTRACT

Matter in Brief:

On August 17, 2020, T.P. Manufacturing Company (hereinafter referred to as “T.P. Company”) and Ms. Pham Hoang M entered into an Employment Contract with the following key terms: Type of Employment Contract: Fixed-term Employment Contract of 1 year (now converted into an indefinite-term Employment Contract); Salary: VND 50.950.000 per month; Job Position: Sales Manager; Place of Work: T.P. Company’s headquarters.

In early 2024, several business partners of T.P. Company reported to the company that certain confidential business information in the contracts between the parties, had been disclosed to a competitor. T.P. Company conducted an investigation and found that Ms. M, who was responsible for managing the contracts with the leaked information, was involved. However, there was insufficient evidence to hold Ms. M accountable for the breach. Therefore, T.P. Company twice reassigned Ms. M to a different position than specified in the Employment Contract, each reassignment lasting 30 working days.

The second reassignment period is now nearing completion, and Ms. M has informed the company that she does not agree to be reassigned to a different position again upon the expiration of the second reassignment period.

Client’s Request:

T.P Company has retained the services of TAPHALAW to obtain legal counsel regarding the following inquiries:

(i) Whether, upon expiration of the second reassignment period, T.P Company is legally authorized to initiate another reassignment of Ms. M to a different position;

(ii) Whether T.P Company may lawfully suspend Ms. M’s employment pending the completion of an investigation into alleged misconduct; and

(iii) The appropriate legal framework and procedures for conducting an inquiry to substantiate the alleged misconduct of Ms. M.

Attorney’s Work Performed:

1. Initial Assessment and Research:

Based on applicable laws, provided information and documents, and the specific requirements of T.P Company, the attorney identified necessary clarifications and requested additional documents to assess the situation and provide tailored legal advice.

2. Issuance of Consulting Letter:

Upon receipt of the complete information and documents from Company T.P, TAPHALAW issued a consulting letter, analyzed the applicable legal framework, evaluated the evidence, and considered Company T.P’s requests. TAPHALAW concluded that:

• T.P Company’s reassignment of Ms. M to perform work which is not prescribed in her employment contract, is a violation of the law. Continued non-compliance could result in administrative penalties of VND 6.000.000 to 14.000.000, as stipulated in Point c, Clause 2, Article 11 Decree 12/2022/ND-CP, and Company T.P would be required to reinstate Ms. M to her original position.
• T.P Company may temporarily suspend Ms. M, and the attorney outlined the procedures for doing so in compliance with the law.
• Regarding the proposed methods to verify Ms. M’s violations in accordance with the law, the attorney has outlined various approaches to establish Ms. M’s wrongdoing. This includes identifying the necessary documents as evidence of Ms. M’s violations, as well as the methods for collecting such evidence and the key considerations to be mindful of during this process. This information is presented for T.P. Company’s review and consideration.
• Assuming sufficient evidence of Ms M’s misconduct, the attorney outlined potential remedies, such as termination of the employment contract by dismissal, compel compensation for damages, and the procedures for each. The advantages, disadvantages, and recommendations for each option were also provided.

Based on the legal advice, T.P Company decided not to reassign Ms. M and requested TAPHALAW’s assistance in temporarily suspending her. During the suspension, as suggested by TAPHALAW, Company T.P met with Ms. M. At Company T.P’s request, TAPHALAW attended the meeting as a representative.

Consulting Outcome:

During the meeting, the attorney presented to Ms. M the evidence collected to demonstrate her misconduct. The attorney further outlined the legal actions that T.P Company would take and the potential legal consequences if Ms. M continued to be uncooperative. Subsequently, Ms. M admitted to disclosing certain confidential business information in the contract, pledged to compensate the Company for its damages in accordance with the company’s internal regulations, and agreed to terminate the employment contract. Both parties executed Meeting Minutes recording the aforementioned matters. The attorney then assisted T.P Company in carrying out the procedures to terminate Ms. M’s employment contract and demanded that Ms. M pay damages.