Vietnam: When an employer unilaterally terminates the employment contract illegally and does not wish to reinstate the employee, what amounts will the employee receive?
- Vietnam: When an employer unilaterally terminates the employment contract illegally and does not wish to reinstate the employee, what amounts will the employee receive?
- What are the cases of termination of employment contracts in Vietnam?
- What are the cases where employers have the right to unilaterally terminate the employment contracts in Vietnam?
Vietnam: When an employer unilaterally terminates the employment contract illegally and does not wish to reinstate the employee, what amounts will the employee receive?
According to Clause 3, Article 41 of the 2019 Labor Code, the obligations of the employer upon illegal unilateral termination of the employment contract are as follows:
Obligations of the employer upon illegal unilateral termination of the employment contract
1. The employer that illegally unilaterally terminates an employment contract with an employee shall reinstate the employee in accordance with the original employment contract, and pay the salary, social insurance, health insurance and unemployment insurance premiums for the period during which the employee was not allowed to work, plus at least 02 months’ salary specified in the employment contract.
After the reinstatement, the employee must return the severance allowance or redundancy allowance (if any) to the employer.
Where there is no longer a vacancy for the position or work as agreed in the employment contract and the employee still wishes to work, the employer shall negotiate revisions to the employment contract.
Where the employer fails to comply with the provisions on notice period in Clause 2 Article 36 of this Labor Code, the employer shall pay a compensation that is worth the employee’s salary for the remaining notice period from the termination date.
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3. Where the employer does not wish to reinstate the employee and the employee agrees, in addition to the compensation mentioned in Clause 1 of this Article and the severance allowance mentioned in Article 46 of this Labor Code, both parties shall negotiate an additional compensation which shall be at least 2 months’ salary under the employment contract in order to terminate the employment contract.
Thus, when the employer unilaterally terminates the employment contract illegally and does not wish to reinstate the employee, and the employee agrees, the employer must pay the following amounts to the employee:
Salary, social insurance, health insurance, and unemployment insurance for the days the employee is not allowed to work, and an additional amount equivalent to at least 2 months' salary according to the labor contract.
Severance allowance.
Additional compensation for the employee as agreed, but at least equal to 2 months' salary according to the labor contract.
Vietnam: When an employer unilaterally terminates the employment contract illegally and does not wish to reinstate the employee, what amounts will the employee receive?
What are the cases of termination of employment contracts in Vietnam?
Article 34 of the 2019 Labor Code stipulates the following cases of termination of an employment contract:
- The employment contract expires, except for the case specified in Clause 4 Article 177 of 2019 Labor Code.
- The tasks stated in the employment contract have been completed.
- Both parties agree to terminate the employment contract.
- The employee is sentenced to imprisonment without being eligible for suspension or release as prescribed in Clause 5 Article 328 of the Criminal Procedure Code, capital punishment or is prohibited from performing the work stated in the employment contract by an effective verdict or judgment of the court.
- The foreign employee working in Vietnam is expelled by an effective verdict or judgment of the court or a decision of a competent authority.
- The employee dies; is declared by the court as a legally incapacitated person, missing or dead.
- The employer that is a natural person dies; is declared by the court as a legally incapacitated person, missing or dead. The employer that is not a natural person ceases to operate, or a business registration authority affiliated to the People’s Committee of the province (hereinafter referred to as “provincial business registration authority”) issues a notice that the employer does not have a legal representative or a person authorized to exercise the legal representative’s rights and obligations.
- The employee is dismissed for disciplinary reasons.
- The employee unilaterally terminates the employment contract in accordance with Article 35 of 2019 Labor Code
- The employer unilaterally terminates the employment contract in accordance with Article 36 of 2019 Labor Code.
- The employee is laid off by the employer in accordance with Article 42 and Article 43 of 2019 Labor Code.
- The work permit or a foreign employee expires according to Article 156 of 2019 Labor Code.
- The employee fails to perform his/her tasks during the probationary period under the employment contract or gives up the probation.
What are the cases where employers have the right to unilaterally terminate the employment contracts in Vietnam?
Pursuant to Article 36 of the 2019 Labor Code, it is stipulated as follows:
The right of an employer to unilaterally terminates the employment contract
1. An employer shall have the right to unilaterally terminate an employment contract in one of the following circumstances:
a) The employee repeatedly fails to perform his/her work according to the criteria for assessment of employees’ fulfillment of duties established by the employer. The criteria for assessment of employees’ fulfillment of duties shall be established by the employer with consideration taken of opinions offered by the representative organization of employees (if any);
b) The employee is sick or has an accident and remains unable to work after having received treatment for a period of 12 consecutive months in the case of an indefinite-term employment contract, for 06 consecutive months in the case of an employment contract with a fixed term of 12 – 36 months, or more than half the duration of the contract in case of an employment contract with a fixed term of less than 12 months.
Upon recovery, the employer may consider concluding another employment contract with the employee;
c) In the event of a natural disaster, fire, major epidemic, hostility, relocation or downsizing requested by a competent authority, the employer has to lay off employees after all possibilities have been exhausted;
d) The employee is not present at the workplace after the time limit specified in Article 31 of this Labor Code;
dd) The employee reaches the retirement age specified in Article 169 of this Labor Code, unless otherwise agreed by the parties;
e) The employee is not present at work without acceptable excuses for at least 05 consecutive working days;
g) The employee fails to provide truthful information during the conclusion of the employment contract in accordance with Clause 2 Article 16 of this Labor Code in a manner that affects the recruitment.
2. When unilaterally terminating the employment contract in any of the cases specified in Point a, b, c, dd and g Clause 1 of this Article, the employer shall inform the employee in advance:
a) at least 45 days in case of an indefinite-term employment contract;
b) at least 30 days in case of an employment contract with a fixed term of 12 – 36 months;
c) at least 03 working days in the case of an employment contract with a fixed term of less than 12 months and in the cases stipulated in Point b Clause 1 of this Article;
d) The notice period in certain fields and jobs shall be specified by the government.
3. When unilaterally terminating the employment contract in the cases mentioned in Point d and Point e Clause 1 of this Article, the employer is not required to inform the employee in advance.
Thus, the employer has the right to unilaterally terminate the employment contract in the above cases.
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