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Author: TNTP LAW

Consequences of illegal debt collection in Vietnam

Debt collection in Vietnam is a service used by many businesses and is one of the essential services for society. However, the activity of debt collection that does not comply with the law poses many risks for both the user and the debt collector. In this article, we will analyze the consequences of illegal debt collection in Vietnam.

1. What is illegal debt collection?

Illegal debt collection activities include all debt collection behaviors that infringe upon the rights and interests of individuals, and legal entities in accordance with the provisions of the law. Examples of such behaviors include:

  • Publicizing images, personal information, and addresses of the debtor on the media without the debtor’s consent causes anxiety and threatens the debtor’s spirit.

When the debtor fails to repay the debt on time, the creditor usually immediately publicizes the debtor’s personal information such as their address of residence, workplace, name, age, date of birth, and identity card number. Even the images and information of the debtor’s family and relatives are also publicly disclosed on social media or in public places. This action can be considered one of the most common actions of creditors when the debtor fails to repay the debt on time.

  • Insulting, defaming the reputation and dignity of the debtor.

This behavior is very common when the creditor insults and defames the reputation and dignity of the debtor when the debtor fails to pay on time. In reality, many criminal cases originate from creditors cursing and using vulgar language toward the debtor. As a result, the creditor may be reported for violating the law.

  • Calling, and contacting acquaintances of the debtor to request repayment on behalf of the debtor.

Calling, and contacting acquaintances, friends, and family members of the debtor to request repayment on behalf of the debtor is a very common illegal debt-collection behavior of financial companies. However, this is also illegal debt collection behavior.

  • Threatening to use force or using force, damaging the debtor’s property.

The act of using force to threaten the debtor is very common and often appears in the media due to the serious nature of these activities. These actions not only violate the life and health of the debtor but also pose a risk of causing a loss of social order and safety.

2. Consequences of illegal debt collection

  • Firstly, the activity of illegal debt collection has led society to view and evaluate all debt collection activities as illegal services.

In fact, debt collection is necessary for the functioning of society, and there are many legal debt collection activities that society allows to operate. However, it is the proliferation of illegal debt collection activities that has led to society’s misunderstanding of this service. Therefore, the very debt collection activities that cause controversy in public opinion limit the demand for the use of debt collection services by society, as individuals and organizations who want to legally collect debts are often mistakenly influenced that debt collection is illegal and associated with “organized crime.”

  • Secondly, parties engaging in illegal debt collection will face legal measures, even criminal prosecution.

The common measures of illegal debt collection parties such as using offensive or threatening phone calls, using violence or property destruction against debtors, are all violations of the law and have clear sanctions under the Criminal Code. These actions infringe on the legal rights and legitimate interests of individuals and legal entities protected by law and also cause a loss of social order and safety. Therefore, those who engage in illegal debt collection are likely to be investigated and prosecuted by law enforcement agencies and subjected to sanctions such as fines or imprisonment.

Illegal debt collection behavior poses risks for both debt collectors and users of this service. The law has specified sanctions for violations to deter those who disregard the law. Therefore, individuals and organizations wishing to use debt collection services in a legal and professional manner should contact law firms with expertise in this field to ensure their rights and interests. We will help customers save time and costs and ensure that debt collection is conducted efficiently and legally.

Best Regard

Is it illegal for enterprises to intentionally let employees “sit idle – get paid”??

Recently, many websites have appeared about the story of a female worker, named Q, who is living and working in Ho Chi Minh City, which is currently receiving a lot of attentions from the public and reported by many Press Agencies, media because enterprises to intentionally let employees “sit idle – get paid”

It is known that Ms. Q has signed an indefinite-term labor contract with Company A since 2014, and Ms. Q has been assigned as a model developer, up to now, Ms. Q’s salary is more than 40 million VND per month.

Her working still had performed as usual until 2021, at this time, she has bought and used 1 product at a store of her Company, according to Ms. Q, the quality of this product is not good and the job Unsatisfied product warranty led to Ms. Q and the Company A’s store had some “unhappy” things.

Although, after that the case was resolved smoothly, but according to Ms. Q, her case was reported to the company by the store with the allegation that Ms. Q harassed the store.

After that incident, according to Ms. Q, the company set up a meeting to clarify the case, as a result, the store representative confirmed that her requirements for the store were correct, but as an employee of the company, this behaviors of Ms. Q is unacceptable. Moreover, from November 2021, the Company asked her to stop all her work, did not assign her work, but still required her to come to sit idle  in the Company.

According to Ms. Q, during this time, Ms. Q was suggested by the company to “quit job” repeatedly.

Although the above incident is still being verified and clarified, there is no conclusion to confirm that Decathlon Company is trying to isolate and force Ms. Q to quit her job, but now a day, it is clear that similar incidents are happening a lot  in current labor relations.

In today’s article, TNTP would like to give you a quick analysis and assessment of “Is it right or wrong for the company to let employees “sit idle – get paid”?

1.Is the employer violating the law?

We need to clarify that the employer still pays the employee but intentionally does not assign work to the employee. It is clear here that the employee is still working according to labor contract agreement with the employer but has “no work” to do and in fact the employer still pays the employee a full salary for the working position the employee has been assigned.

Therefore, in this case, it is difficult to prove that the employee is not assigned to the work or workplace or not provided with the working conditions as agreed in the employment contract as prescribed in Point a Clause 1 of this Article. 2 Article 35 of the Labor Code 2019 on the right to unilaterally terminate labor contracts of employees.

2.Consequences that workers may be to face

If from a humorous perspective, it is clear that the workers here are “Gravy train”, but in fact, all of us understand that “No pain, no gain” and not a worker feels happily, comfortably receiving the company’s monthly salary when falling into this situation. So what can workers do?

  • The employee resigns actively: in this case, applying for leave and receiving some benefits will definitely be the choice of many people. In some cases, employees voluntarily quit their jobs because they were too dissatisfied with the company, thus losing many of their legitimate rights when the employer unilaterally terminated the labor contract because the employee voluntarily quit without a legitimate reason for 05 consecutive working days or more as specified in Point e, Clause 1, Article 36 of the Labor Code on the right to unilaterally terminate the labor contract of the employer.
  • Employees still continue to come to the company: the two parties will definitely not be satisfied, in this case the employee will have to bear a lot of pressure,  to be isolated by the company and  to be discriminated the colleagues.

There are many cases like M.s Q’s mentioned above happening, although it is not known who is right and who is wrong, it is clear that this is also a loose point in the labor law of our country that needs to be improved and supplemented. Nessesscary to have more detailed and specific legal sanctions for these cases not only ensures the interests of each party when entering into labor relations, but also contributes to building a more honest and developing working environment.

Above is an article by TNTP about whether the enterprise intentionally let employees “sit idle – get paid” violate the law? Hope this article is useful for enterprises and readers.

Best regards.

Cases the Arbitration Agreement is invalid

In Sale and Purchase Contracts, Principal Contracts, etc., the dispute settlement clause can be stated as “in case the dispute cannot be resolved by negotiation, one of the parties can settle the dispute at Arbitration”. This Agreement is known as the Arbitration Agreement. Currently, many enterprises have chosen to settle disputes by arbitration because of its efficiency, flexibility, and time-saving method. However, due to negligence in the drafting process and the enterprise’s failure to check the legal validity of the Arbitration Agreement, the Arbitration Agreement may be invalid. In this article, we would like to mention and analyze more clearly the null and void Arbitration Agreement.

1. What is an Arbitration Agreement?

  • According to the provisions of Clause 2, Article 3 of the Law on Commercial Arbitration 2010, an Arbitration Agreement is an agreement between the parties on the settlement by arbitration of a dispute that may arise or has arisen. Thus, commercial disputes can only be resolved by arbitration only when there is an Arbitration Agreement between the disputing parties. The Arbitration Agreement may be made before, during or after a dispute occurs.
  • The Arbitration Agreement is made in writing expressing the will of the parties in dispute settlement.
  • The Arbitration Agreement may be represented by an arbitration clause in the contract establishing commercial relations between the parties or in the form of a separate agreement and shall be considered attached to the main contract or evidence determining the will of the parties to settle the dispute by arbitration.

2. When is the Arbitration Agreement invalid?

The Arbitration Agreement will be invalid in the following cases:

  • Disputes arising in areas not under the authority of the Arbitration

In order for a dispute to be resolved by Commercial Arbitration and the Arbitration Agreement not to be invalid, the arising dispute must fall within the field of arbitration, including:

– Disputes between parties arising from commercial activities;

– Disputes arising between parties in which at least one party has commercial activities;

– Other disputes between the parties as provided for by law shall be resolved by arbitration.

  • The person establishing the Arbitration Agreement has no authority under the law

Normally, the signing of an Arbitration Agreement or Contract will be performed by the legal representative of the enterprise or the authorized representative.

In principle, if an Arbitral Agreement is made by an unauthorized person, such Arbitration Agreement is invalid. In case the Arbitration Agreement is entered into by an unauthorized person, but during the establishment and performance of the Arbitration Agreement or in the arbitration proceedings, the person competent to enter into the Arbitration Agreement has accepted or known it without objection, the Arbitration Agreement is not invalid.

  • The person establishing the Arbitration Agreement does not have civil act capacity according to the provisions of the Civil Code

Civil act capacity is understood as the ability of an individual to establish and perform civil rights and obligations by his/her actions. The person establishing the Arbitration Agreement without civil act capacity includes:

  • Juvenile.
  • Loss of civil act capacity.
  • People with difficulty in cognition and behavior control.
  • Limited capacity for civil acts.

In this case, the Court needs to collect evidence to prove that the person who established the Arbitration Agreement does not have civil act capacity. It must have documents proving the date of birth or the conclusion of a competent authority or the decision of a competent Court determining or declaring that person has lost his/her civil act capacity or has restricted his/her civil act capacity.

  • The form of the Arbitration Agreement is not consistent with the provisions

According to Article 16 of the Law on Commercial Arbitration 2010, the Arbitration Agreement can be established in the form of an arbitration clause in the contract or in the form of a separate agreement. Either way, the Arbitration Agreement must be in writing. The following forms of agreement are also considered to be established in writing:

a) The agreement is established through exchanges between the parties by telegram, fax, telex, email and other forms as prescribed by law;

b) The agreement is established through the exchange of written information between the parties;

c) The agreement is recorded in writing by a lawyer, notary public or a competent organization at the request of the parties;

d) In the transaction, the parties refer to a document showing the arbitral agreement such as a contract, documents, charter of the company and other similar documents;

d) Through an exchange of claims and defenses in which the existence of an agreement is made by one party and not denied by the other.

  • One of the parties is deceived, threatened or coerced during the establishment of the arbitral agreement and requests to declare the Arbitration Agreement invalid

This is considered as one of the grounds for the Court to declare the Arbitration Agreement invalid. In civil relations, the parties must be goodwill and honest in establishing and performing civil rights and obligations; neither party may deceive, threaten or coerce the other.

Deception is understood as the intentional act of one party or a third party to mislead the other party about the subject and nature of the Arbitration Agreement, so the Arbitration Agreement has been established.

Threat and coercion are understood as the intentional act of one party or a third person to force the other party to sign the Arbitration Agreement in order to avoid damage to life, health, honor, reputation and dignity, the property of his/her relatives.

  • The Arbitration Agreement violates the prohibitions of the law

Prohibitions of the law are provisions of the law that do not allow subjects to perform certain acts.

Above is TNTP’s article on Case of invalid Arbitration Agreement, hope this article is useful for enterprises and readers.

Sincerely,

Distinguishing the relationship between fines for violations and compensations for damages in the 2015 Civil Code and the 2005 Commercial Law

Fines for violations and compensations for damages are two sanctions mainly applied to the violating party. Due to the different application subjects, there are some differences between fines for violations and compensations for damages in the 2015 Civil Code (“CC”) and the 2005 Commercial Law (“CL”). Please review the following article to have a better understanding of this difference.

1. Regulations on fines for violations and compensations for damages in the CC 2015

  • Fines for violation are regarded as an agreement between the contracting parties, accordingly, the violating party must pay a fine to the aggrieved party. Fines for violations are a specific civil remedy, in which the penalty will be only applied by the aggrieved party when there has been an agreement on the fines for violations in the contract;
  • Regarding compensations for damages, individuals and legal entities whose civil rights have been infringed shall be compensated for all damages, unless otherwise agreed by the parties or otherwise regulated by law. The infringed party can request for compensation for benefits that he or she would otherwise have enjoyed under the contract. This party may also require the obligor to pay expenses incurred due to the non-fulfillment of the contractual obligations that do not overlap with the level of compensation for the benefits brought by the contract.

2. Regulations on fines for violations and compensations for damages in the CL 2005

  • Fines for violation are regarded as a remedy whereby the aggrieved party requests the breaching party to pay a fine amount for its breach of the contract, if so agreed in the contract, except for the following cases: (i) a case of liability exemption agreed upon by the parties occurs; (ii) a force majeure event occurs; (iii) a breach by one party is entirely attributable to the other party’s fault; (iv) a breach is committed by one party as a result of the execution of a decision of a competent state management agency which the party cannot know, at the time the contract is entered into;
  • Basically, the compensations for damages regulated in the CL are similar to those in the CC. Except for the cases of exemption from liability, compensations for damages arise when the following factors are fully met: There is a breach of contract; There are material losses; The breach of contract is the direct cause of the loss. The breaching party shall indemnify the aggrieved party for the losses caused by the contractual breach, including the actual and direct loss value suffered by the aggrieved party caused by the breaching party and the profit directly to which the aggrieved party would have earned if the such breach had not been committed.

3. The relationship between fines for violations and compensations for damages in the Civil Code 2015

According to Article 418 of the CC, the parties can agree that the breaching party only has to pay fines for the violation but not the compensation for damages, or being responsible for both amounts. In case the parties previously agreed on fines for violations but did not reach an agreement on both penalties, the breaching party will only have to pay the fines for violations.

4. The relationship between fines for violations and compensation for damages in the Commercial Law 2015

According to Article 307 of the CL, where the parties do not agree upon fines for breaches, the aggrieved party shall only be entitled to claim damages, unless otherwise provided for by this Law. Where the parties agree upon fines for breaches, the aggrieved party shall be entitled to apply both remedies of fines and compensations for damages, unless otherwise provided for by this Law.

5. Distinguishing the relationship between fines for violations and compensations for damages in the Civil Code 2015 and the Commercial Law 2005 (referred to as the “relationship between FFV and CFD in the CC and CL”)

When entering into a contractual relationship, there are definite obligations to be performed. To ensure that the parties properly and fully perform their obligations, the parties can agree on a sole provision that the breaching party must bear a certain fine for the breach and must compensate for damages corresponding to the breach, or the parties may agree on different penalty levels and compensation for each particular violation.

  • Common points of the relationship between FFV and CFD in CC and CL:

– The aggrieved party can only apply fines for violations when the parties have an agreement on fines for violations. In case a mutual agreement on fines for violation is not available, the aggrieved party can only request damage compensation. Please note that the fine for breach is a sanction applied based on the parties’ agreement, while the compensation for damage is the mechanism applied based on the damage caused by the breach of contract.

– The parties can agree that the breaching party must be responsible for both fines for the breach and compensations for damages, hence, when breaching the obligation, the violating party must both pay a fine for the violation and a damage compensation as well.

  • Differences in the relationship between FFV and CFD in CC and CL:

– In the CC, the parties can agree that the violating one will only pay a fine for the violation without having to make compensation for damages. However, in CL, such an agreement is considered void, even if the parties agree as above. When there are sufficient legal grounds, the aggrieved party can still claim compensation and fines for violations from the violating party (if there is an agreement on fines for violations).

– In the CC, in case the parties have an agreement on the fines for violations but not on both fines for violations and compensations for damages, the violating party shall only have to pay fines for the violation. Meanwhile, in the CL, although the parties only reach an agreement on fines for violations, not on both fines for violation and compensation for damage, both remedies can be applied by the aggrieved party.

  • The difference in the relationship between FFV and CFD in the CC and CL can be summarized in the following table:
Fines for violation

(“FFV”)

Compensation for damage

(“CFD”)

Applicable remedies under the CC Applicable remedies under the CL
Unavailable Unavailable CFD CFD
Unavailable Available CFD CFD
Available Unavailable FFV FFV, CFD
Available Available FFV, CFD FFV, CFD

(Unavailable, available status should be understood as unavailable, available in the contract)

Above is the article “Distinguishing the relationship between fines for violations and compensations for damages in the 2015 Civil Code and the 2005 Commercial Law”. We hope this article is useful to you.

Sincerely,

TNTP & ASSOCIATES INTERNATIONAL LAW FIRM

  • Office in Ho Chi Minh City:
    Room no. 1901, 19 th Floor Saigon Trade Center Tower, No. 37 Ton Duc Thang Street, Ben Nghe Ward, District 1, Ho Chi Minh City
  • Office in Hanoi City:
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  • Email: ha.nguyen@tntplaw.com


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