Enterprises terminating contracts with Employees due to Covid-19 pandemic: Should they pay redundancy allowance or severance allowance?

According to Clause 10 of Article 36 and Article 38 of the Labor Code 2012, the employer has the right to unilaterally terminate the labor contract with the employee due to natural disasters, fires, or other force majeure reasons as stipulated by law, where the employer has taken all remedial measures but still has to narrow down production and reduce employment positions.

Other force majeure reasons fall into one of the following cases:

- Due to enemy attack, epidemic;- Relocation or reduction of production and business premises as required by a competent state authority.

According to Clause 1 of Article 48 of the Labor Code 2012, it is stipulated that: When a labor contract is terminated as specified in Clauses 1, 2, 3, 5, 6, 7, 9, and 10 of Article 36 of this Code, the employer is responsible for paying severance allowance to employees who have regularly worked for 12 months or more, with each working year being entitled to half a month’s salary.

=> Thus, if the company unilaterally terminates a labor contract with an employee due to an epidemic, it is responsible for paying severance allowance to the employee. However, in the event that the company reorganizes labor due to an epidemic leading to the termination of the contract with you, you will be entitled to job-loss allowance according to Article 49 of the Labor Code.

The working period for calculating severance allowance and job-loss allowance is the total actual working time the employee has worked for the employer minus the period the employee has participated in unemployment insurance as prescribed by law and the period of work for which the employer has previously paid severance allowance or job-loss allowance (if any).

The above is the support content.

Sincerely!