Collection of judgments on disputes over severance allowance in Vietnam

Hello, Lawnet would like to send you some of the following judgments:

1. Conditions for receiving severance allowance

Article 46 of the Labor Code 2019 stipulates the conditions for receiving severance allowance.

Accordingly, the employer must pay the severance allowance to the employee who has worked regularly for full 12 months or more in the following cases:

(1) The employment contract expires

(2) The tasks stated in the employment contract have been completed.

(3) Both parties agree to terminate the employment contract.

(4) The employee is sentenced to imprisonment without being eligible for suspension or release, capital punishment or is prohibited from performing the work stated in the employment contract by an effective verdict or judgment of the court.

(5) The employee dies, is declared incapacitated by the Court, is missing or is dead.

(6) 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;

(7) The employee unilaterally terminates the employment contract

(8) The employer unilaterally terminates the employment contract; Employers dismiss employees due to changes in structure, technology or economic reasons or due to merger, consolidation or separation of enterprises or cooperatives.

Thus, employees who have quit their jobs in one of the eight cases mentioned above and have worked on a regular basis for a period of at least 12 months will be entitled to the severance allowance according to regulations.

Employees who quit their jobs, are eligible for severance pay, and will receive a half-month salary allowance for each year of work. Specifically, the severance allowance is entitled to the following:

Severance allowance = 1/2 x Working time to calculate severance allowance x Salary to calculate severance allowance

2. Some judgments on disputes over severance allowance in Vietnam

Judgment 73/2019/LD-ST dated November 5, 2019 on dispute over severance allowance

- Level of trial: First instance

- Judicial body: People's Court of Duc Hoa district, Long An province

- Quoted content: "Mr. Le Van Th worked at HH Sugar Joint Stock Company from May 1998 to June 2016, when he resigned due to health reasons. He was issued a decision by HH Sugar Joint Stock Company to terminate the Labor Contract signed on June 8, 2016 by the General Director of HH Sugar Joint Stock Company. However, after leaving his job, the company has not paid him a severance allowance of VND 25,173,000. After that, HH Sugar Joint Stock Company agreed to pay the above amount to Mr. Th and asked for a trial in his absence.

Judgment 02/2021/LD-ST dated December 10, 2020 on dispute over severance allowance

- Level of trial: First instance

- Judicial body: People's Court of Hai Chau district, Da Nang city

- Quoted content: "Mr. Trinh Van D is a geological drilling worker of D Construction Consulting One Member Limited Liability Company. On December 31, 2019, D Construction Consulting Company Limited terminated the labor contract with him from December 31, 2019. It has been more than 1 year since the termination of the labor contract, but the Company still has not paid the severance allowance to Mr. Trinh Van D, although he has requested it, but the Company has not yet fulfilled the payment obligation. At the time Mr. D quits his job, the salary he is entitled to and also the salary to participate in insurance is 6,864. His working time at the Company was from January 2000 to December 2019. But the time for him to claim the severance allowance was from January 2002 to December 2008, a period of 9 years, with each year ½ month salary. Therefore, Mr. D asked the Court to settle and force D Construction Consulting Company Limited to pay him a severance allowance at the rate of ½ months' salary per year of working. Specifically, 9 years x 6,864,600/2 = VND 30,890,700."

Judgment 45/2020/LD-ST dated September 21, 2020 on dispute over severance allowance

- Level of trial: First instance

- Judicial body: People's Court of District 1, Ho Chi Minh City

- Quoted content: " On September 8, 2000, Mr. D started working at V Apartment Development Company. On November 8, 2000 and for the following years, 2001–2002–2003–2004, the two parties signed a definite-term contract of 1 year. On May 8, 2005, the two parties signed an indefinite term contract. On January 13, 2020, Mr. D submitted an application for leave with 45 days notice as prescribed, his average salary in the 6 preceding months before leaving was VND 28,486,000. On February 28, 2020, the company let him quit from February 28, 2020 for the reason: that the employee unilaterally terminated the labor contract. After leaving his job, Mr. D completed procedures for unemployment benefits and was paid unemployment allowance by the Department of Labor, Invalids, and Social Affairs - Ho Chi Minh City People's Committee for 11 months; 17,092,000 VND per month. When he quit his job, he asked the Company to pay a severance allowance for him from September 8, 2000, to December 31, 2008, for 8 years and 2 months. However, the Company did not agree, so he filed a lawsuit at the Court asking the Company to pay the severance allowance of: 121,068,332 VND, one-time payment as soon as the Court's judgment takes legal effect.

Judgment 03/2021/LD-ST dated December 10, 2020 on dispute over severance allowance

- Level of trial: First instance

- Judicial body: People's Court of Hai Chau district, Da Nang city

- Quoted content: "Mr. Nguyen Nhu N is a geotechnical drilling worker of D. On December 31, 2019, D Construction Consulting Company Limited terminated the labor contract with him as of December 31, 2019. It has been more than 1 year since the termination of the labor contract, but the Company still has not paid the severance allowance to Mr. Nguyen Nhu N, although he has requested it. The company has not yet fulfilled the payment obligation. At the time Mr. N quit his job, the salary he was entitled to and the salary to participate in insurance were VND 6,034,800. His working time at the Company was from October 2002 to December 2019. However, the time for him to claim the severance allowance was from October 2002 to December 2008, with a period of 6.5 years, ½ month salary each year. Therefore, Mr. N asked the Court to settle and force D Construction Consulting Company Limited to pay him a severance allowance at the rate of ½ months' salary per year. Specifically, 6.5 years x 6,034,800/2 = VND 19,613,100."

Judgment 05/2017/LD-PT dated November 21, 2017 on dispute over severance allowance

- Level of trial: Appellate

- Judicial body: High People's Court in Ho Chi Minh City

- Quote from the content: "Ms. S worked for G International School for a total period of 3 years from July 1, 2012, to June 30, 2015, according to the Labor Contract signed on August 1, 2012. On March 13, 2015, the School informed her of the benefits she will be entitled to when the contract expires, including no severance allowance in accordance with the labor law. She complained, and Truong informed her that they were not obligated to pay her severance pay. On April 15, 2015, the School sent a letter confirming that she will not be paid severance pay when the contract expires, with the following reasons: the law does not have any regulations regarding payment of severance allowance to foreign workers when the labor contract is terminated; At the same time, she is not eligible to participate in unemployment insurance according to the provisions of the insurance law, so the school has paid her an extra monthly amount as the only compensation for her time working at the school when the employment contract was terminated by both parties. Therefore, the school does not have to pay her an additional severance allowance. She disagreed with the reasons given by Truong. By June 2015, she had received final payments from G International School, excluding severance allowance. Therefore, she filed a lawsuit asking the Court to force G International School to pay her a temporary severance allowance of USD 10,487.49, equivalent to VND 234,080,776.8."

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