Structural change is the governance right of the enterprise. But the right to reorganize the apparatus does not mean the natural right for an employee to quit his job.
The gap between these two issues is where the legal risk of a restructuring focuses. You can prove that departments have been merged, reports have changed, or the number of positions has decreased. The harder question remains: how has this change changed the demand for labor and why are specific workers affected?
There is a real restructuring that only solves half of the problem.
Appellate Labor Judgment No. 94/2024/LD-PT dated 29-8-2024 of the People's Court of Ho Chi Minh City. Ho Chi Minh City (Judgment 94)[1] is a case worth referencing. The court did not accept the employee's request and recognized the labor reorganization process of the enterprise. But the value of the case lies not only in the outcome but in how a management decision, when it becomes a dispute, is re-examined through the entire process leading to the employee losing his job.
Having a real restructuring is only the first step
In this Judgment, the reorganization does not only occur for the employee who filed the lawsuit. The record shows that the enterprise dissolved a division, rearranged its functions, transferred personnel, changed the reporting route, and terminated the employment of three employees. These facts support the identification of the structural change that actually existed, rather than just the reason created to terminate the contract with an individual.
Businesses cannot start from the conclusion that "the company is restructuring, so it has the right to let employees leave". A general decision on "restructuring to improve operational efficiency" will be of little value if it does not indicate which departments were dissolved or merged, which functions were transferred, how the personnel structure before and after differed, and how the demand for labor has changed.
There is a real restructuring that only solves half of the problem. Enterprises must also prove that the change changes the demand for labor and thereby affects the employment of specific employees. This is the link between the decision to reorganize the enterprise and the consequences of termination of employment.
It's not just that deleting a location means that the job is gone
In fact, restructuring rarely makes the entire work of a position disappear. Work can be divided among many people, transferred to another department, merged into a new title, or done by a different method. So, the fact that a title is no longer on the organizational chart does not by itself answer the question of the need for labor.
If much of the work was done after the restructuring, the business may have to explain: how has the demand for that position actually changed, or has the work just been transferred to someone else?
This does not mean that restructuring becomes illegal for every part of the old work remaining. The essence of labor reorganization is to reallocate functions and resources. The problem is that the business must be able to explain the logic and prove the consistency of the change.
If the three positions are merged into one, how are the functions and personnel needs of the new position different from the three old positions? If two people perform the same function but only one person continues to be employed, what explains that result? If the job is transferred to another department, how does the personnel structure before and after change? The law does not necessarily set an independent "employee selection test" in all cases. But in terms of evidence, the more difficult it is for an enterprise to explain these questions, the more difficult it is to prove that the employee lost his job due to the restructuring itself. Proving that there is a restructuring and proving that the employee is affected by the restructuring are two different things; when a dispute occurs, the second may be more difficult than the first.
The labor employment plan must precede the decision
In Judgment 94, the process of developing the labor use plan, the submission of the draft to the Trade Union and the time of promulgating the plan are all considered. That shows that the value of the plan lies not only in the content but also in the time and process of its formation.
In essence, the plan must reflect how the enterprise considers the post-restructuring workforce: who continues to be employed, who can be retrained or assigned to another job, and who must eventually quit according to the applicable law. The plan must be part of the decision process, not a product of an already existing decision.
If the enterprise has determined in advance that employee A must quit his job and then make a plan to explain why A belongs to the affected group, the dossier may be complete in form, but the decision-making process poses a problem.
A consistent process must show that business needs lead to structural changes; structural changes that change labor demand; impact on the workforce to be assessed; plans are developed and exchange steps are carried out according to regulations; then the business comes to the final result. The order of forming the document is therefore no less valuable than the content of the document itself.
If these questions are answered with a timely and consistent series of documents, the business has a significant basis to defend the decision.
"Sufficient documents" does not mean "sufficient evidence"
Enterprises often check a restructuring with a list of documents: have there been decisions, plans for employing employees, discussed with the employee representative organization, notified and properly authorized to sign? These questions are necessary, but a strong set of documents is not measured by the number of documents.
The value of the record lies in whether the documents tell the same story: business reasons lead to structural changes; structural changes that lead to changes in employer demand; and changes in employer demand lead to specific jobs being affected.
If a link is not proven, having enough decisions, plans, minutes, and notices is unlikely to fill the gap. For example, a restructuring document shows that one position has been deleted but another record shows that the functions and needs of personnel have hardly changed; or the document is in the right form but the chronological sequence is not consistent with the decision-making process that the business explains.
Judgment 94 also shows that seemingly technical issues can also become the subject of debate. The communication with the Trade Union and the authority of the person who signs and issues the document are all set by the parties. Therefore, enterprises not only need enough documents but also enough evidence to reconstruct and protect the logic of the entire decision-making process.
Enterprises should also note that dismissal due to structural change and unilateral termination of labor contracts are two different legal mechanisms, with their own grounds, conditions and procedures. Therefore, enterprises should not use the notice period or conditions of the unilateral termination mechanism to replace their own obligations when terminating due to structural changes.
Get your records ready for a dispute in court
When a dispute occurs, the Court looks at the file in a different way. From documents made many years ago, the Court must reconstruct the whole story: why the enterprise had to restructure; how the old and new structures differ; how the demand for labor changed; why this employee was affected; when the plan was formed; how the employee representative organization participated; and whether the person signing the document is competent or not.
Therefore, before notifying employees, businesses should ask themselves: Why restructure? How has the structure actually changed? How did that change change the demand for labor and why was this employee affected? What documents were made at that time to prove the above answers?
If these questions are answered with a timely and consistent series of documents, the business has a significant basis to defend the decision. If the answer is only formed after the dispute arises, a complete set of formal documents is unlikely to fill the gap in evidence.
Judgment 94 shows that restructuring is really not enough to ensure that the employee is legally stable. Enterprises need to prove that the structural change has changed the demand for labor and thereby affected the employment of specific employees, and that the entire process is carried out in the right order and authority. A good restructuring dossier therefore not only needs to be in accordance with the procedures, but also must be able to explain why the employee has to quit his job.
[1] https://congbobanan.toaan.gov.vn/3ta1765070t1cvn/, accessed on 2026/09/22.
