Dismissal of an executive member of grassroots trade union - Potential risks for companies

HM&P's Legal Associate Nguyen Nhat Duong and Legal Assistant Phan Thi Mai Huong share HM&P's insight in The Saigon Times (No. 41-2023) on 12 October 2023. Below is the English version translated by HM&P of this article:

Under current regulations, the employment relationship between an enterprise and a member of the executive committee of a grassroots trade union ("Trade Union Executive Committee Member") can be terminated if the enterprise takes disciplinary action in the form of dismissal. However, unlike the dismissal of other employees, enterprises must follow special procedures prescribed by law when dismissing a trade union leader. Many disputes have arisen between Trade Union Executive Committee Members and enterprises over the legal requirement to follow the order and procedures when the enterprise imposes the disciplinary measure of dismissal on a Trade Union Executive Committee Member. In this article, the authors intend to provide a clearer view on this special order and procedure from the perspective of the agencies conducting the procedure in the judgment No. 144/2021/LD-PT dated February 2, 2021 of the Ho Chi Minh City People's Court^[1] (“Judgment”).

Both courts had different opinions

In the above judgment, Ms. H - the plaintiff - filed a lawsuit against NGKCCCLVN Company Limited ("CCCL Company") to request the cancellation of the dismissal decision issued by CCCL Company to dismiss her on January 10, 2019. Previously, CCCL Company had disciplinarily dismissed Ms. H. on the grounds that she had defamed the company's leaders and employees. In the first instance, the Thu Duc City People's Court issued a verdict accepting part of Ms. H's claim, including the cancellation of the dismissal decision. One of the reasons for the above verdict is that CCCL Company did not follow the legal order and procedures in dismissing Ms. H, an executive member of the union.

However, CCCL Company appealed, and the Ho Chi Minh City People's Court ("Court of Appeal") had a completely different opinion from the Court of First Instance, stating that CCCL Company had fully complied with the necessary order and procedures to dismiss Ms. H in accordance with the regulations. Therefore, the Court of Appeal then accepted CCCL Company's entire appeal, or in other words, recognized that CCCL Company's dismissal of Ms. H was legal.

Legal regulations on special orders and procedures to be follow by enterprises

Unlike the dismissal of regular employees, there is an additional special procedure that the enterprise must follow when dismissing a union official, which is to reach a written agreement with the executive committee of the grassroots union. If the agreement cannot be reached, both parties must notify the specialized labor departments under the Provincial People's Committee. After 30 days from the date of notification, the enterprise has the right to decide^[2].

It can be seen that, in addition to the grounds for disciplinary action, the Labor Law also specifically emphasizes that enterprises must strictly adhere to the order and procedures when dismissing employees. Even though there is a solid basis for dismissing an employee who is an executive committee member of a trade union, enterprises must also pay attention to this special procedure regulation in order to avoid being considered as illegally dismissing employees. If this is the case, enterprises will have to bear a lot of risks when they must fulfill their obligations and take responsibility according to the provisions of the Labor Law on resolving labor complaints or resolving individual labor disputes, and also have to fulfill the enterprise's obligations similar to the case of unilateral illegal termination of the labor contract. This may cause companies to waste a lot of time, money and other resources.

Source: https://thesaigontimes.vn/

How to negotiate between the company and the grassroots trade union executive committee

Regarding the content of the above Judgment, the inconsistency in the court's opinion stems from the provision requiring a written agreement between the company and the executive committee of grassroots trade union. Specifically, CCCL Company stated that on November 27th, 2018, this company held a meeting to deal with the labor discipline of Ms. H. This meeting was attended by members of the company's Executive Committee of Grassroots Trade Union. Therefore, the minutes of the labor discipline resulting from this meeting also record the agreement between the company and the Executive Committee of Grassroots Trade Union. The Court of First Instance disagreed with CCCL's argument and found that there was no legal basis to prove that the Labor Disciplinary Meeting Minutes were an agreement between CCCL Company and the Grassroots Trade Union Executive Committee. However, the appellate court found that CCCL Company had organized a meeting to take disciplinary action against Ms. H. and all the participants had signed the labor disciplinary report. Ms. H is a member of Executive Committee of the Trade Union, and at the meeting on November 27th, 2018, Mr. P - the representative of the Executive Committee of the Grassroots Trade Union - expressed his disagreement with the disciplinary dismissal of Ms. H. Therefore, the CCCL Company then sent a notice of disciplinary dismissal against Ms. H to the Department of Labor, War Invalids and Social Affairs of Ho Chi Minh City. From the above observations, the Court of Appeal concluded that CCCL Company followed the order and procedures according to the law. Thus, the Court of Appeal considered the labor disciplinary record resulting from the meeting to handle Ms. H's labor discipline to be a written agreement between the company and the Executive Committee of the Grassroots Union.

In this case, we share the same perspective with the Court of First Instance that the labor disciplinary minutes cannot be considered the agreement between the Company and the Executive Committee of Grassroots Trade Union, because:

Firstly, as stipulated in Article 122 of the Labor Code 2019 (corresponding to Article 123 of the Labor Code 2012), organizing a meeting to deal with labor discipline is a mandatory condition in the procedure of dealing with labor discipline. If the person to be disciplined is not a member of the Trade Union, the meeting must also be attended by a representative of the Executive Committee of the Grassroots Trade Union. Therefore, the activity of attending and signing the labor disciplinary record of the Executive Committee of the Grassroots Trade Union is an independent activity according to the legal regulations on labor discipline. The conditions for dealing with labor discipline apply to all employees, regardless of whether the person subject to labor discipline is a member of the Executive Committee of the Grassroots Trade Union or not.

Secondly, Trade Unions are organized and operate on the principle of democratic centralism, where the minority obeys the majority^[3]. The decision of the union is made by the majority. Therefore, in order to determine whether there is a written agreement with the Executive Committee of the Grassroots Trade Union, the Executive Committee must hold a meeting and vote unanimously on disciplinary actions against employees who are members of the Trade Union, and it must be expressed in a resolution. In this case, although the disciplinary meeting was attended by three members of the grassroots union's executive committee, including the chairman, vice-chairman, and a member of the Executive Committee, they did not represent the opinion of all or even the majority of the company's Union members. This is only the opinion of the members of the Labor Disciplinary Council, which was convened to represent the Executive Committee of the Grassroots Trade Union. Therefore, the labor disciplinary record containing the opinions of the members of the Grassroots Trade Union's Executive Committee at the labor disciplinary meeting cannot be considered a written agreement between the companies and the Grassroots Trade Union's Executive Committee as required by law.

Thirdly, both the Labor Code 2019 and the Labor Code 2012 stipulate that the labor disciplinary meeting will still be held even if the representative of the grassroots union's executive committee does not attend. In other words, if the representative of the executive committee does not attend, the disciplinary meeting will still be held. Then, if the executive committee of the grassroots union fails to reach an agreement with the enterprise on taking disciplinary action against the executive committee member of the union, the enterprise must notify the specialized labor agency under the Provincial People's Committee. It is clear to say that if the Court of Appeal considers the presence of the Grassroots Trade Union Executive Committee representative at a labor disciplinary meeting as an agreement between the enterprise and the Executive Committee, this statement will lead to the misunderstanding of enterprises that the absence of the Grassroots Trade Union Executive Committee representative at the disciplinary meeting means that there is no agreement between the enterprise and the Executive Committee on disciplinary action against employees who are Executive Committee Members of the Trade Union. Accordingly, the company will send a notice to the specialized labor agency under the Provincial People's Committee and dismiss the employee, which may cause dangerous misunderstandings for company.

In conclusion, companies must separate the participation of the Grassroots Trade Union Executive Committee representative in the labor disciplinary meeting from the agreement between the company and the Executive Committee. Companies should conduct these two procedures independently of each other in order to comply with the law and avoid serious risks.

Read the article at:Sa thải thành viên ban lãnh đạo công đoàn – nhiều rủi ro tiềm ẩn cho doanh nghiệp