If I do not meet the conditions for the period of social insurance payment and the age of pension entitlement, can I receive the severance allowance?
What are regulations on severance allowance?
Pursuant to Article 46 of the Labor Code 2019 of Vietnam on cases eligible for severance allowance:
“Article 46. Severance allowance
1. In case an employment contract is terminated as prescribed in Clauses 1, 2, 3, 4, 6, 7, 9 and 10, Article 34 of this Code, the employer is responsible for paying severance allowance to the employee who has worked on a regular basis for a period of at least 12 months. Each year of work will be worth half a month’s salary, except for the cases in which the employee is entitled to receive retirement pension as prescribed by social insurance laws, and the cases specified in Point e Clause 1 Article 36 of this Labor Code.
2. The qualified period of work as the basis for calculation of severance allowance shall be the total period during which the employee actually worked for the employer minus the period over which the employee participated in the unemployment insurance in accordance with unemployment insurance laws and the period for which severance allowance or redundancy allowance has been paid by the employer.
3. The salary as the basis for calculation of severance allowance shall be the average salary of the last 06 months under the employment contract before the termination.
4. The Government shall elaborate this Article.”
Receiving severance allowance when not meeting conditions for social insurance
Cases of termination of an employment contract under the law of Vietnam
Pursuant to Article 34 of the Labor Code 2019 of Vietnam on cases of termination of an employment contract:
- The employment contract expires, except for the case specified in Clause 4 Article 177 of this 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 this Code.
- The employer unilaterally terminates the employment contract in accordance with Article 36 of this Code.
- The employer allows the employee to resigns in accordance with Article 42 and Article 43 of this Code.
- The work permit or a foreign employee expires according to Article 156 of this Labor Code.
- The employee fails to perform his/her tasks during the probationary period under the employment contract or gives up the probation.
If I do not meet the conditions for the period of social insurance payment and the age of pension entitlement, can I receive the severance allowance?
Pursuant to Article 54 of the Law on Social Insurance 2014 of Vietnam (amended by Point a Clause 1 Article 219 of the Labor Code 2019 of Vietnam) on conditions for receiving retirement pension:
“Article 54. Conditions for receiving retirement pension
1. An employee mentioned in Points a, b, c, d, g, h and i Clause 1 Article 2 of this Law, except for the cases specified in Clause 3 of this, will receive retirement pension if he/she has paid social insurance for at least 20 years and:
a) He/she has reached the retirement age specified in Clause 2 Article 169 of the Labor Code;
b) He/she has reached the retirement age specified in Clause 3 Article 169 of the Labor Code and has at least 15 years’ doing the laborious, toxic or dangerous works or highly laborious, toxic or dangerous works on the lists of the Ministry of Labor, War Invalids and Social Affairs; or has at least 15 years’ working in highly disadvantaged areas, including the period he/she works in areas with the region factor of at least 0,7 before January 01, 2021;
c) His/her age is younger than the retirement age specified in Clause 2 Article 169 of the Labor Code by up to 10 years and he/she has worked in coal mines for at least 15 years; or
d) He/she contracted HIV due to an occupation accident during performance of his/her assigned duty.
2. An employee mentioned in Points dd and e Clause 1 Article 2 of this Law will receive retirement pension if he/she has paid social insurance for at least 20 years and:
a) His/her age is younger than the retirement age specified in Clause 2 Article 169 of the Labor Code by up to 05 years, unless otherwise prescribed by the Law on Military Officer of Vietnam’s Army, the Law of People’s Police, the Law on Cipher and the Law on professional servicemen and women, national defense workers and officials;
b) His/her age is younger than the retirement age specified in Clause 3 Article 169 of the Labor Code by up to 05 years and he/she has at least 15 years’ doing the laborious, toxic or dangerous works or highly laborious, toxic or dangerous works on the lists of the Ministry of Labor, War Invalids and Social Affairs; or has at least 15 years’ working in highly disadvantaged areas, including the period he/she works in areas with the region factor of at least 0,7 before January 01, 2021; or
c) He/she contracted HIV due to an occupation accident during performance of his/her assigned duty.
3. A female employee that is a commune official or a part-time worker at the commune authority and has paid social insurance for 15 to under 20 years and reaches the retirement age specified in Clause 2 Article 169 of the Labor Code will receive the retirement pension.
4. The Government shall provide for special cases of retirement age.”
According to the above regulations, you don’t meet the conditions for the period of social insurance payment and the age of pension entitlement, you are in the case of receiving of severance allowance upon termination of the labor contract.
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