Isolation to force workers to quit their jobs: Unpredictable risks

One of the most common ways to "force quit" in labor practice today is not direct dismissal, but isolating, humiliating or mentally pressuring employees to leave their jobs on their own. Enterprises may not issue a decision to terminate labor contracts immediately, but use measures such as irregular transfers, non-assignment of jobs, separation from the collective, excessive supervision, or creation of a punitive working environment to prevent employees from continuing to work.

It is worth noting that many businesses think that this is only an "internal management measure" or "soft personnel handling", thereby underestimating the legal risks arising

It is worth noting that many businesses think that this is only an "internal management measure" or "soft personnel handling", thereby underestimating the legal risks arising. However, the Cassation Decision No. 01/2025/LD-GDT dated March 11, 2025 of the High People's Court in Ho Chi Minh City[1] shows a remarkable signal in labor adjudication: enterprises cannot rely solely on records, minutes and internal decisions to legalize the termination of labor relations if the entire previous process shows that oppression, isolation, or mistreatment of workers.

From job transfer to "systematic isolation"

In the Cassation case 01, the employee has worked for the enterprise since 2009 and signed an indefinite-term labor contract since 2011. By 2020, employees are enjoying a salary of more than 29 million VND/month.

After that, the enterprise issued a decision to transfer the employee from the management position to the position of factory employee. When the employee complains, the company revokes the transfer decision but continues to issue a decision to suspend work for 30 days.

Notably, when employees returned to work on October 6, 2020, the company did not arrange normal work but arranged for employees to sit alone in the showroom, do not turn on the electricity, have security guards outside and are not free to leave the room during working hours. When using a phone or personal computer, employees continue to be recorded for violating the rules. This situation lasted for many days in a row.

After that, due to not continuing to work at the company, the employee was disciplined and dismissed on the grounds of "voluntarily leaving work for many days without a good reason".

At first glance, businesses seem to be handling the right process: there is a decision, there is a record, there is a reason for violation. However, at the cassation level, the Judges' Committee of the High Court in Ho Chi Minh City viewed this entire series of acts from a completely different perspective.

When "internal management" crosses legal boundaries

A particularly important feature of Cassation Decision 01 is that the Court not only considers the legality of the final dismissal decision, but also evaluates the entire previous context.

The transfer of employees to jobs other than labor contracts is only carried out in limited cases according to Article 29 of the Labor Code 2019. However, according to the Trial Panel, the company's transfer of employees from management positions to factory employees is actually in the nature of dismissal discipline, but the enterprise "deliberately circumvents the law" so as not to comply with the labor discipline process under this Code.

The court also determined that the enterprise had violated the regulations when temporarily suspending work without properly following the procedures for consulting the trade union organization in accordance with the labor law.

More importantly, the Trial Panel went one step further when directly evaluating the treatment of employees in the days of returning to work. Based on many sources of evidence such as trade union reports, documents of the Confederation of Labor, testimonies of witnesses and videos provided by employees, the Court concluded that the enterprise had committed an act of "coercing and mistreating" employees, an act prohibited in Article 8.  Labor Code 2019.

This is a point of special significance in the practice of applying labor law in Vietnam. In the past, labor disputes often focused on the legality of the dismissal decision, the notice period, the salary regime or disciplinary procedures. However, this decision can be seen as a remarkable signal that the Court is willing to take a deeper look at the factors of human dignity, working environment and actual treatment of employees, instead of just stopping at the form of a disciplinary decision.

In other words, even if the enterprise does not use physical violence or direct insulting words, measures of isolation, punitive supervision, deposition, or prolonged psychological pressure can still be considered abuse of workers.

Legal risks don't stop at a labor lawsuit

In practice, many businesses choose to "make employees take time off" because they think that it will be less risky than unilaterally terminating the labor contract or dismissing them directly. However, this approach could actually lead to more serious legal consequences.

Firstly, the enterprise may be declared that the entire disciplinary decision is unlawful.

In the above case, the High Court annulled both the first-instance and appellate judgments to resolve the case, and determined that the dismissal discipline was contrary to the law.

This means that enterprises have to accept employees back to work, pay salaries during the period of not being allowed to work, pay social insurance arrears, compensate for damages and other financial obligations according to the Labor Code.

Second, businesses may face reputational risks and internal labor relations.

In the current context, labor disputes no longer only take place within the scope of enterprises. Videos, images, internal emails or reflections from trade unions can completely become evidence before the Court and at the same time spread on social networks, greatly affecting the recruitment brand and business reputation.

Especially for FDI enterprises or enterprises with global supply chains, behaviors that are considered "workplace harassment", "psychological abuse" or "constructive dismissal" can [2] also impact ESG assessments, international labor standards and relations with foreign customers.

Third, businesses may face the risk of collective disputes or stronger intervention by trade unions.

In this case, it was the reports and documents from the trade union that became an important source of evidence for the Court to evaluate the behavior of the enterprise. That shows that the role of trade unions in labor disputes is no longer as formal as it used to be.

First of all, all decisions to transfer, suspend work or handle discipline need to have clear grounds and fully comply with the legal process

A notable trial trend

The above-mentioned cassation decision shows that the Court increasingly tends to assess the actual nature of labor management acts, instead of just stopping at the completeness of internal records or procedures. This means that the enterprise has enough minutes, decisions or processing processes that are not necessarily sufficient to protect the legality of the personnel decision if the whole context shows signs of oppression or abuse of employees.

If in the past businesses could focus on finalizing records, minutes, or internal processes to protect their decisions, that may not be enough now. Courts tend to look at the overall way businesses treat employees, the actual motives of management decisions, and the extent of impact on the dignity and psychology of employees.

This is a very noteworthy change for businesses in Vietnam, especially in the context of increasing attention to standards on human rights, ESG and corporate social responsibility.

What do businesses need to do to limit risks?

First of all, all decisions to transfer, suspend work or handle discipline need to have clear grounds and fully comply with the legal process. The use of "intermediary" measures to pressure or force employees to quit their jobs can be recognized by the Court as an act of circumventing the law.

Second, businesses need to absolutely avoid isolationist or humiliating behaviors of employees, regardless of name. Not assigning jobs, separating from the collective, over-supervising, creating a punitive working environment or degrading the honor of employees can all become adverse evidence in labor disputes.

Third, businesses need to build a more transparent and humane mechanism for handling labor conflicts. In many cases, dialogue, negotiation or a reasonable termination agreement can significantly reduce legal risks and dispute costs compared to the use of psychological pressure measures.

Finally, HR departments and middle management need to be adequately trained on the legal limits of labor administration. In fact, many major disputes arise not from the official policy of the enterprise, but from the emotional behavior or lack of understanding of the law of the direct management.

Cassation Decision No. 01 is a remarkable warning for businesses. In modern labor relations, "forced resignation" by isolating or humiliating employees is no longer a mere moral risk, but can become a serious legal risk with huge processing costs and the reputation of the business can be ruined in the digital environment.

Lawyer Nguyen Van Phuc

HM&P Law Firm

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