Unilateral termination of labor contracts due to employees’ frequent failure to perform work

In the process of labor management and utilization, assessing the work performance of employees plays an important role in the operations of an enterprise. In practice, there are cases where employees do not meet job requirements or frequently fail to complete assigned tasks, which raises the issue of the employer’s right to terminate the employment relationship. The Labor Code 2019 allows employer to unilaterally terminate an labor contract (“Contract”) if the employee frequently fails to perform work according to the Contract. However, for the termination of the contract to be deemed lawful, the enterprise must comply with the following conditions and procedures. 

1. The legal basis for unilateral termination of the Contract

Pursuant to Point a, Clause 1, Article 36 of the Labor Code 2019, the employer has the right to unilaterally terminate the Contract in cases where the employee frequently fails to perform his/her work as stipulated in the Contract. However, determining whether the employee frequently fails to complete his/her work must be based on the criteria for assessing work performance issued by the employer. 

Current labor laws do not specify the frequency for assessing employees’ work performance, but allow enterprises to build an internal assessment system suitable for their specific operations. Nevertheless, assessment criteria must be clearly specified in the regulation on assessment of work performance and promulgated in accordance with legal procedures. This ensures that the assessment is conducted objectively and transparently, while simultaneously limiting the abuse of the right to unilaterally terminate the Contract. 

This regulation demonstrates a balance between the employer’s labor management rights and the protection of the employee’s legitimate interests. Employers cannot arbitrarily claim that an employee has failed to complete his/her work in order to terminate the contract, but rather must rely on specific, transparent, and pre-established criteria. 

2. The grounds to prove the employee’s failure to perform work

To have a basis for applying the measure of unilaterally terminating a Contract on the grounds of the employee’s frequent failure to perform work, enterprises need to develop and fully retain relevant documents. 

Firstly, the job description is an important document to clearly define the scope of work, responsibilities, and requirements for the employee. The content of a job description usually includes the specific tasks of the job position, requirements for work progress and quality, as well as key performance indicators. The job description should be acknowledged and signed by both the employer and the employee, and attached to the Contract to serve as a basis for assessing work performance. 

In addition, enterprises need to issue a Regulation on assessment of work performance. This regulation acts as the primary basis for determining whether an employee frequently fails to complete his/her tasks. Assessment criteria can be built upon factors such as work progress, product or service quality, the completion rate of work targets, or key performance indicators (KPI). Issuing an assessment regulation helps ensure that the evaluation process is conducted objectively, transparently, and consistently. It should be noted that merely issuing an annex attached to the Contract to stipulate job evaluation criteria is not a sufficient basis to unilaterally terminate the Contract in accordance with the law. Therefore, enterprises must issue an independent and comprehensive assessment regulation. 

According to the Guidelines of the Supreme People’s Procuracy, enterprises must retain documents to prove the employee’s failure to complete work in the event of a labor dispute. These documents may include:⁴ 

• Contents of the Contract or task assignment slips, task assignment notices (the section describing the work, requirements for progress, and quality of work execution); 

• Task assignment notices reflecting requirements for work progress and quality; 

• Scoring boards and grading evaluations of work completion; 

• Emulation and commendation titles; 

• Minutes specifically detailing the continuous uncompleted tasks over a certain period; 

• Regulation on assessment of work performance; 

• Testimonies of the involved parties and related persons (especially those directly assigned to manage and evaluate the employee’s work performance). 

Retaining these documents fully is of vital importance because the burden of proof in disputes related to the unilateral termination of a Contract usually falls on the employer. Without sufficient evidence to prove the employee’s failure to complete work according to the promulgated criteria, the enterprise’s termination of the contract may be deemed unlawful. 

3. Notes for application

When applying the measure of unilaterally terminating a Contract due to the employee’s frequent failure to perform work, enterprises should note several important legal issues. 

Firstly, when promulgating the Regulation on assessment of work performance, the enterprise must consult the grassroots representative organization of employees (if any). If an enterprise uses a work performance assessment regulation without consulting the grassroots representative organization of employees, it may face an administrative fine ranging from VND 10,000,000 to VND 20,000,000.⁵ 

Secondly, unless otherwise prescribed by law, when unilaterally terminating a Contract, the employer must comply with the advance notice period for the employee, specifically:⁶ 

• At least 30 days for a definite-term Contract with a duration of 12 to 36 months; 

• At least 45 days for an indefinite-term Contract. 

In conclusion, unilaterally terminating a Contract due to the employee’s frequent failure to perform work is the lawful right of the employer under the Labor Code 2019. However, to avoid legal risks, enterprises need to build a clear work assessment system, fully issue the necessary internal regulations, and strictly comply with the procedures and formalities prescribed by law. 

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^{(4) Sub-item 2.1, Item 2, Chapter II of Guideline No. 33/HD-VKSTC dated November 8, 2022, of the Supreme People’s Procuracy.}

^{(5) Clause 1, Article 6 and Point c, Clause 3, Article 12 of Decree 12/2022/ND-CP.} 

^{(6) Clause 2, Article 36 of the Labor Code 2019.} 

Related posts

1. Termination of the labor contract to perform a different job for the same employer
2. Is an employee who abandons their job without a valid reason for 05 consecutive working days or more considered to have unlawfully unilaterally terminated the labor contract?

Disclaimers:

This article is for general information purposes only and is not intended to provide any legal advice for any particular case. The legal provisions referenced in the content are in effect at the time of publication but may have expired at the time you read the content. We therefore advise that you always consult a professional consultant before applying any content.

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