Enterprises representing employees sue social insurance on how to calculate late payment interest

On January 21, Khanh Hoa Provincial People's Court opened an appeal hearing for an administrative case related to a dispute over late social insurance (SI) interest between an seafood processing enterprise in Cam Ranh and a local SI agency.

This is considered a rare case when a business sues an insurance agency for calculating late payment interest, as a representative of the rights of employees.

Suing from the consequences of the economic crisis

The plaintiff in the case is Mr. Vo Ngoc Hiep - General Director of Cam Ranh Seafood Processing and Export Company Limited (Cam Ranh Seafood Company), and is also the representative of the enterprise's labor force.

The defendant is Cam Ranh Social Insurance, related to the calculation and collection of late social insurance payment interest.

According to Mr. Hiep, in the period of 2008 - 2009, due to the impact of the global economic crisis, seafood export activities faced many difficulties, and businesses were at risk of bankruptcy.

In that situation, through the trade union organization and under the guidance of the Cam Ranh City Labor Federation, the company agreed with employees to terminate their employment and pay each employee 10 months' salary.

In parallel with resolving the regime for employees, the company also submitted a request to stop paying insurance for employees who have quit their jobs. The agreement and closure of social insurance books for employees were implemented in July 2009.

However, due to the need to focus on handling production and business issues during the crisis period, decisions for employees to quit their jobs were signed by the enterprise a few months later than the time of closing the books.

According to the enterprise, it was the issuance of this late decision that led to a long dispute with the Social Insurance agency.

Based on the decisions for employees to quit their jobs signed later, Cam Ranh Social Insurance determined that the enterprise is still obliged to pay social insurance, health insurance, unemployment insurance, occupational accident and disease insurance and late payment interest with a total amount of more than 184 million VND.

As the economic situation gradually stabilizes, Cam Ranh Seafood Company continues to pay insurance for employees.

However, according to the enterprise's reflection, the social insurance, health insurance, and unemployment insurance that the company paid in February, March, and April 2021 were arbitrarily deducted by Cam Ranh Social Insurance from the above "dead payment interest".

The company believes that this interest rate is "unreal", arising from inappropriate calculations, lasting for many years without being compared or settled.

After reviewing the entire insurance payment process from 2009 to 2020, Cam Ranh Seafood Company said that it had paid the Social Insurance agency more than 252 million VND in excess.

Therefore, the enterprise filed a lawsuit, requesting the court to declare the act of calculating late payment interest and deducting insurance from Cam Ranh Social Insurance as illegal; at the same time, requesting to partially cancel the Decision to resolve complaint No. 441 dated August 18, 2021 of the Director of Cam Ranh Social Insurance.

The court of first instance rejected all lawsuit requests

This administrative case has gone through many first-instance trials. In the most recent first instance judgment, issued in February 2025, the People's Court of Region 2 rejected all of the company's lawsuit requests.

According to the trial panel, Cam Ranh Social Insurance's issuance of Decision No. 441 on complaint settlement is within its authority, in accordance with the correct order and deadline prescribed by law.

The court believes that the interest of more than 184 million VND in late payment is calculated based on the amount of social insurance and health insurance still owed and newly arising from August 2009 to the time of inspection on November 25, 2020, which is in accordance with regulations.

Regarding the argument that Cam Ranh Social Insurance did not proactively compare debts, leading to prolonged interest arising, the trial panel determined: From January 1, 2011 to present, Cam Ranh Social Insurance has drawn up 13 working minutes with enterprises to determine social insurance, health insurance, and unemployment insurance debts.

At the same time, 9 documents were issued requesting the company to coordinate in comparing debts.

The court believes that the two parties' failure to agree on the data does not change the financial obligations of the enterprise and is not the fault of the Social Insurance agency.

Disagreeing with this decision, Mr. Vo Ngoc Hiep appealed.

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