Vietnam: The amount of severance allowance, unemployment benefits that employees receive when they quit their jobs at the end of 2022, the beginning of 2023?
What is the severance allowance that the employee receives when terminating the labor contract in Vietnam?
Pursuant to Article 46 of the Labor Code 2019 of Vietnam, it provides as follows:
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.
According to the above provisions, the employee will only receive severance allowance when he/she has worked for the employee for a full 12 months or more and is not eligible for a pension in accordance with the law on social insurance and is terminated from the labor contract due to arbitrary resignation without a good reason.
For every year of work, the employee will receive half a month's salary for severance pay. The salary calculated severance allowance is the average salary of the next 6 months under the labor contract.
The working time for severance pay is determined by the total time that the employee works for the employer minus the time of participation in unemployment insurance and the time during which severance pay and job loss allowance has been paid.
For example: Employees who sign labor contracts from January 1, 2007, starting from January 1, 2009 participate in unemployment insurance. By 31/12/2022, the labor contract will be terminated, at this time, the salary under the labor contract of the employee is 15,000,000 VND/month.
Thus, the amount of severance pay that the employee receives is calculated as follows:
15,000,000 x 0.5 x 2 = 15,000,000 VND.
Vietnam: The amount of severance allowance, unemployment benefits that employees receive when they quit their jobs at the end of 2022, the beginning of 2023?
How many unemployment benefits will workers receive in Vietnam?
Pursuant to Article 47 of the Labor Code 2019 of Vietnam, it provides as follows:
Article 47. Redundancy allowance
1. Where an employment contract is terminated according to Clause 11 Article 34 of this Labor Code and the employee has worked on a regular basis for the employer for at least 12 months, the employer shall pay a redundancy allowance to the employee. Each year of work will be worth 01 month’s salary and the total redundancy allowance shall not be smaller than 02 month’s salary.
2. The qualified period of work as the basis for calculation of redundancy 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 the calculation of redundancy 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.
Accordingly, employees will only receive job loss benefits when they have worked for employees for full 12 months or more.
For every year of work, the employee will receive 01 month's salary for severance pay. The salary calculated severance allowance is the average salary of the next 6 months under the labor contract.
The working time for severance pay is determined by the total time that the employee works for the employer minus the time of participation in unemployment insurance and the time during which severance pay and job loss allowance has been paid.
For example, the employee signs a labor contract with the employer from January 1, 2007 and starts paying unemployment insurance from January 1, 2009. The salary on the labor contract from January 1, 2022 to now is 15,000,000 VND/month. By 31/12/2022, he lost his job. The amount of job loss benefits received by the employee will be calculated as follows:
15,000,000 x 1 x 2 = 30,000,000 VND.
In what cases are employees entitled to unemployment benefits in Vietnam?
Pursuant to Clause 1, Article 47 of the Labor Code 2019 of Vietnam stipulates as follows:
Article 47. Redundancy allowance
1. Where an employment contract is terminated according to Clause 11 Article 34 of this Labor Code and the employee has worked on a regular basis for the employer for at least 12 months, the employer shall pay a redundancy allowance to the employee. Each year of work will be worth 01 month’s salary and the total redundancy allowance shall not be smaller than 02 month’s salary.
In Clause 11, Article 34 of the Labor Code 2019 of Vietnam stipulates as follows:
Article 34. Cases of termination of an employment contract
…
11. The employer allows the employee to resigns in accordance with Article 42 and Article 43 of this Code.
Pursuant to Article 42, Article 43 of the Labor Code 2019 of Vietnam provides for cases in which employees receive job loss allowances when they lose their jobs for the following reasons:
- Changes in the organizational structure, personnel rearrangement;
- Changes in processes, technology, and equipment associated with the employer’s business lines;
- Changes in products or product structure.
- Economic crisis or economic depression;
- Changes in law and state policies upon restructuring of the economy or implementation of international commitments.
- Split, split, merge, merge; selling, leasing, transforming the type of enterprise; transfer of ownership, right to use assets of enterprises and cooperatives.
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