Do I have to pay redundancy allowances when my employees are dismissal due to changes in structure and technology or economic reasons in Vietnam?
Do I have to pay redundancy allowances when my employees are dismissal due to changes in structure and technology or economic reasons in Vietnam? In case the full division, partial division, consolidation, merger of the enterprise, can employers pay their employees redundancy allowances in Vietnam?
Hi, I have a problem that needs to be answered. My company is having a new project, so it has to change its structure and technology. The director of the company decided to let most of the employees in the company leave their jobs because of the need to change the structure and technology. I would like to ask, when the company gives an employee leave for that reason, will the employee be paid a redundancy allowance?
Please advise. Thankyou.
1. Do I have to pay redundancy allowances when my employees are dismissal due to changes in structure and technology or economic reasons in Vietnam?
Article 42 of the Labor Code 2019 stipulates obligations of the employer in case of changes in structure, technology or changes due to economic reasons as follows:
1. Changes in structure and technology include:
a) Changes in the organizational structure, personnel rearrangement;
b) Changes in processes, technology, equipment associated with the employer’s business lines;
c) Changes in products or product structure.
2. Changes due to economic reasons include:
a) Economic crisis or economic depression;
b) Changes in law and state policies upon restructuring of the economy or implementation of international commitments.
3. If the change affects the employment of a large number of employees, the employer shall develop and implement a labor utilization plan prescribed in Article 44 of this Labor Code. In case of new vacancies, priority shall be given to retraining of the existing employees for continued employment.
4. If a change due to economic reasons threatens to cause a large number of employees to lose their jobs, the employer shall develop and implement a labor utilization plan as prescribed in Article 44 of this Code.
5. In case the employer is unable to create provide employment and has to resort to dismissing employees, the employer shall pay them redundancy allowances in accordance with Article 47 of this Labor Code.
6. The dismissal of employees in the cases mentioned in this Article shall only be implemented after a discussion with the representative organization of employees (if any) and after giving prior notice of 30 days to the People’s Committee of the province and the employees.
Thus, your company has has to resort to dismissing employees for changes in structure and technology, the company is obliged to pay redundancy allowances to employees in Vietnam.
2. In case the full division, partial division, consolidation, merger of the enterprise, can employers pay their employees redundancy allowances in Vietnam?
According to Article 43 of the Labor Code 2019 stipulating obligations of the employer in case of full division, partial division, consolidation, merger of the enterprise; sale, lease, conversion of the enterprise; transfer of the right to ownership or right to enjoyment of assets of the enterprise or cooperative as follows:
1. In case the full division, partial division, consolidation, merger of the enterprise; sale, lease, conversion of the enterprise; transfer of the right to ownership or right to enjoyment of assets of the enterprise or cooperative affects the employment of a large number of employees, the employer shall develop a labor utilization plan as prescribed in Article 44 of this Labor Code.
2. The current employer and the next employer shall implement the adopted labour utilization plan.
3. The laid off employees will receive redundancy allowances in accordance with Article 47 of this Code.
Therefore, the employer must pay a redundancy allowance to the employee who is terminated due to the reason of full division, partial division, consolidation, merger of the enterprise in Vietnam.
Best Regards!
