From 2018, will severance allowances be removed?

16:59, 11/07/2024

I have worked for the Company for 12 years. I heard that since 2018, there are no longer severance allowance policies, is that correct?

Article 48 of the Labor Code 2012 stipulates:

Article 48. Severance Allowance

When the labor contract terminates under the provisions of Clauses 1, 2, 3, 5, 6, 7, 9, and 10 of Article 36 of this Code (except for cases where the employee resigns to retire or is dismissed due to disciplinary actions - Ed.), the employer is responsible for paying severance allowance to employees who have worked regularly for a period of twelve months or more. Each year of work is entitled to a half-month's wage as severance allowance.
The working time used to calculate severance allowance is the total actual working time for the employer minus the time the employee has participated in unemployment insurance as prescribed by the Law on Social Insurance, and the working time for which severance allowance has already been paid by the employer.
The wage used to calculate severance allowance is the average wage based on the labor contract of the six consecutive months immediately before the employee's termination.

To date, there has been no information regarding changes to the provisions in the Labor Code 2012. Therefore, you are still entitled to severance allowance if you meet the conditions as stipulated above.

According to Lao Dong Newspaper

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