In the global corporate environment, employee violations of workplace codes of conduct are not uncommon.

Acts such as disclosing sensitive information, abusing authority, or simply behaving in ways that conflict with corporate culture may prompt the parent company to demand immediate termination. However, applying such standards in Vietnam is far from straightforward.

1. Vietnamese law: The “red line” in disciplinary action

The 2019 Labor Code clearly defines the types of misconduct that justify dismissal. This list is closed, meaning that unless the behavior falls under specific categories such as theft, embezzlement, gambling, drug use, sexual harassment, etc., the employer cannot unilaterally terminate the employee, even if the conduct seriously violates internationally recognized codes of conduct. If the behavior is not specified in the registered internal labor regulations, the company lacks legal grounds for dismissal.

2. The “soft” solution: Mutual termination agreement

To avoid legal risks, many companies opt to negotiate a mutual termination agreement with the employee. In such cases, the employee typically receives full entitlements and may be offered additional financial support. In return, they sign a commitment not to file complaints or lawsuits against the company.

While this seems like a win-win solution, reality proves more complex. There have been numerous cases where employees, after signing the agreement, still filed lawsuits – and the courts accepted them. Why?

3. “No lawsuit” clause – Can it really block litigation?

Under the 2015 Civil Procedure Code, every individual has the right to file a lawsuit to protect their legitimate interests. A “no lawsuit” clause in a termination agreement is not among the legal grounds for a court to reject a claim. Unless both parties have a valid arbitration agreement, the court must accept the case if the claim is legitimate and filed within the statute of limitations.

In other words, a “no lawsuit” clause cannot override the right to access justice.

4. When can a termination agreement be invalidated?

A termination agreement is a civil transaction. It is only valid if:

• Both parties have full legal capacity
• The agreement is signed voluntarily
• The content does not violate laws or social ethics

If the employee can prove coercion, deception, or threats, the agreement may be declared invalid. In such cases, the company may be deemed to have unlawfully terminated the contract and could be required to compensate the employee or reinstate them.

Conversely, if the company can demonstrate a transparent negotiation process, that the employee had time to consider, received legal advice, and was paid all entitlements, the agreement will be upheld. However, the “no lawsuit” clause has limited value – it cannot eliminate the employee’s minimum legal rights such as salary, insurance, or severance pay. Therefore, if the company fails to honor these rights, it may still lose in court despite the clause.

5. What should companies do to minimize risk?

• Keep thorough records: Meeting minutes, emails, payment documents, and proof of independent legal consultation for the employee.
• Show good faith: Demonstrate that the agreement was chosen to maintain a positive work environment, not to avoid disciplinary procedures.
• Draft reasonable clauses: Avoid overly broad language like “no lawsuit for any reason.”
• Integrate codes of conduct into internal regulations: To enforce global standards, companies must incorporate them into registered labor rules.

6. Lessons from international practice

In the UK, a termination agreement is only valid if the employee receives independent legal advice. In the US, waiver agreements are common but cannot infringe on federal minimum rights. Overly broad clauses such as “non-disparagement” or “absolute confidentiality” have been ruled unlawful.

Vietnam does not require independent legal advice, but still protects employees through the invalidation of agreements that are coercive or unlawful.

7. Conclusion: Termination agreements are not an impenetrable shield

Courts have the authority to accept lawsuits even if a “no lawsuit” clause exists. Companies can only feel secure when:

• The agreement is signed transparently and voluntarily
• Employee rights are protected at the minimum legal standard
• Internal labor regulations are updated to legally incorporate global standards

Transparency, legal compliance, and respect for employee rights not only reduce legal risks but also lay the foundation for a sustainable corporate culture – where international norms and local laws coexist harmoniously.