Can employees who illegally unilaterally terminate their employment contracts receive severance allowances in Vietnam?

Can employees who illegally unilaterally terminate their employment contracts receive severance allowances in Vietnam?

Article 40 of the Labor Code 2019 stipulates obligations of the employee upon illegal unilateral termination of the employment contract as follows:

The employee who illegally unilaterally terminates his/her employment contract shall:

1. Not receive the severance allowance.

2. Pay the employer a compensation that is worth his/her half a month’s salary plus (+) an amount equal to his/her salary for the remaining notice period from the termination date.

3. The employee shall reimburse the employer with the training costs in accordance with Article 62 of this Code.

Thus, in case the employee illegally unilaterally terminates the employment contract, he will not receive severance allowance according to the provisions of law in Vietnam.

In what cases do employees have the right to unilaterally terminate the employment contract without prior notice in Vietnam?

In Clause 2, Article 35 of the Labor Code 2019, the right of an employee to unilaterally terminates the employment contract as follows:

2. An employee is shall have the right to unilaterally terminate the employment contract without prior notice if he/she:

a) is not assigned to the work or workplace or not provided with the working conditions as agreed in the employment contract, except for the cases specified in Article 29 of this Labor Code;

b) is not paid adequately or on schedule, except for the case specified in Clause 4 Article 97 of this Code.

c) is maltreated, assaulted, physically or verbally insulted by the employer in a manner that affects the employee’s health, dignity or honor; is forced to work against his/her will;

d) is sexually harassed in the workplace;

dd) is pregnant and has to stop working in accordance with Clause 1 Article 138 of this Labor Code.

e) reaches the retirement age specified in Article 169 of this Labor Code, unless otherwise agreed by the parties; or

g) finds that the employer fails to provide truthful information in accordance with Clause 1 Article 16 of this Labor Code in a manner that affects the performance of the employment contract.

According to this Article, if falling into the above cases in Vietnam, the employee has the right to unilaterally terminate the employment contract without prior notice in Vietnam.

What are regulations on employment period as the basis for calculation of severance allowance in Vietnam?

In Clause 3, Article 8 of Decree No. 145/2020/ND-CP stipulating severance allowance, redundancy allowance as follows:

3. The employment period as the basis for calculation of severance allowance or redundancy allowance is the total period over which the employee has worked for the employer in reality (hereinafter referred to as “actual work period”) minus (-) the period over which the employee participates in unemployment insurance and the period over which the employer pays severance allowance or redundancy allowance. Where:

a) The actual work period includes: actual work period; probation period; employer-provided training period; sick leave and maternal leave according to social insurance laws; paid recovery period after an occupational accident or disease according to occupational hygiene and safety laws; paid leave period for fulfillment of citizen’s duties; work suspension period through no fault of the employee; weekly breaks prescribed in Article 111, paid leave prescribed in Article 112, Article 113, Article 114, Clause 1 Article 115; period over which the employee has to perform duties of the employee representative organization prescribed in Clause 2 and Clause 3 Article 176; and work suspension period prescribed in Article 128 of the Labor Code.

b) The period over which the employee participates in unemployment insurance includes: the period over which the employee participates in unemployment insurance and the period over which participation in unemployment insurance is not mandatory but the employer has paid in addition to salary an extra amount equal to the unemployment insurance premium according to labor and unemployment insurance laws.

c) The work period as the basis for calculation of severance allowance or redundancy allowance shall be expressed as years (full 12 months); If the number of months of an incomplete year is 06 months or less, it will be considered ½ year; if the number of months of an incomplete year is more than 06 months, it will be considered 01 year.

The above is the law on employment period as the basis for calculation of severance allowance in Vietnam.

Best Regards!