Is it necessary to notify employees in advance when their employment contracts expire in Vietnam?

1. Is it necessary to notify employees in advance when their employment contracts expire in Vietnam?

In Article 45 of the Labor Code 2019, noticing termination of employment contracts is as follows:

1. The employer shall send a written notice to the employee of the termination of his/her employment contract, except for the cases specified in Clauses 4, 5, 6, 7, 8 Article 34 of this Labor Code.

2. In case an employer that is not a natural person shuts down business operation, the date of termination of the employment contract is the same date of the notice of business shutdown.

In case the provincial business registration authority issues a notice that the employer does not have a legal representative or a person authorized to exercise the legal representative’s rights and obligations according to Clause 7 Article 34 of this Labor Code, the date of termination of the employment contract is the same date of the notice.

According to Clause 4, Clause 5, Clause 6, Clause 7 and Clause 8, Article 34 of the Labor Code 2019 stipulates cases of termination of an employment contract as follows:

4. The employee is sentenced to imprisonment without being eligible for suspension or release as prescribed in Clause 5 Article 328 of the Criminal Procedure Code, 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 foreign employee working in Vietnam is expelled by an effective verdict or judgment of the court or a decision of a competent authority.

6. The employee dies; is declared by the court as a legally incapacitated person, missing or dead.

7. 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, or a business registration authority affiliated to the People’s Committee of the province (hereinafter referred to as “provincial business registration authority”) issues a notice that the employer does not have a legal representative or a person authorized to exercise the legal representative’s rights and obligations.

8. The employee is dismissed for disciplinary reasons.

Thus, except for the cases prescribed by law mentioned above, when the contract expires, the employer must notify the employee in writing and thereby terminate the labor contract. However, the law does not specify how long the notice must be before the contract expires in Vietnam.

In case your employment contract is terminated when it has expired, the company must notify you in writing. The company does not notify you in advance, it will be administratively sanctioned.

2. How much is fine for failing to notifications to employees of expiration of employment contracts in Vietnam? 

Pursuant to Article 12 of Decree 12/2022/ND-CP stipulating violations against regulations on modification, revision and termination of employment contracts as follows:

1. A fine ranging from VND 1.000.000 to VND 3.000.000 shall be imposed upon an employer for failing to give written notifications to employees of the termination of their employment contracts which is made in accordance with regulations of the Labour Code, except for the cases specified in Clauses 4 through 8 Article 34 of the Labour Code.

2. The following fines shall be imposed upon an employer for commission of one of the following violations: Changing the term of an employment contract using its annex; failing to comply with regulations on time limits for settling all payments in respect of the rights and interests of employees when terminating the employment contracts; failing to pay or insufficiently paying severance allowances to employees in accordance with regulations of law; failing to pay or insufficiently paying redundancy allowances to employees in accordance with regulations of law; failing to make or insufficiently making the prescribed payments to employees when unilaterally terminating their employment contracts in breach of law; failing to complete procedures for certification of duration of participation in social insurance and unemployment insurance, and return the certification and original copies of other documents to employees after terminating their employment contracts in accordance with regulations of law; failing to provide copies of the documents relevant to the employee’s working period if requested by the employee after terminating his/her employment contract:

a) A fine ranging from VND 1.000.000 to VND 2.000.000 shall be imposed if the violation involves 01 - 10 employees;

b) A fine ranging from VND 2.000.000 to VND 5.000.000 shall be imposed if the violation involves 11 - 50 employees;

c) A fine ranging from VND 5.000.000 to VND 10.000.000 shall be imposed if the violation involves 51 - 100 employees;

d) A fine ranging from VND 10.000.000 to VND 15.000.000 shall be imposed if the violation involves 101 - 300 employees;

dd) A fine ranging from VND 15.000.000 to VND 20.000.000 shall be imposed if the violation involves 301 employees or more.

3. A fine ranging from VND 5.000.000 to VND 10.000.000 shall be imposed upon an employer for commission of one of the following violations:

a) Dismissing employees due to changes in organizational structure, technology, or economic reasons in one of the following circumstances: failing to discuss with the internal representative organization of employees (if any), or failing to give a prior notice of at least 30 days to the Provincial People’s Committee or the employee;

b) In case of changes in organizational structure, technology, or changes due to economic reasons; 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, committing one of the following violations: failing to develop an employee placement plan; developing an employee placement plan that does not have adequate primary contents as prescribed by law or fail to discuss with the internal representative organization of employees (if available) during the development of the employee placement plan;

c) Failing to take opinions given by the internal representative organization of employees (if available) into consideration when adopting the rules for assessment of employees' fulfillment of duties.

4. Remedial measures

a) The employer is compelled to make full payments of severance allowances or redundancy allowances plus the interest on such amounts, which is calculated at the highest rate of the demand deposit interest rates publicly quoted by state-owned commercial banks on the date of penalty imposition, to employees in case of failing to pay or insufficiently paying severance or redundancy allowance as specified in Clause 2 of this Article;

b) The employer is compelled to complete procedures for certification and return documents, which have been kept by the employer, to employees in case of failing to complete procedures for certification of duration of participation in social insurance and unemployment insurance, and return the certification and original copies of other documents to employees after terminating their employment contracts in accordance with regulations of law as specified in Clause 2 of this Article;

c) The employer is compelled to pay an amount of money equal to the employee’s salary as agreed in the employment contract for the remaining notice period from the termination date in case of failing to comply with regulations on notice period as specified in Point a Clause 3 of this Article.

According to Clause 1, Article 6 of Decree 12/2022/ND-CP stipulating fine levels:

1. The fines for administrative violations prescribed in Chapter II, Chapter III and Chapter IV of this Decree shall be imposed upon violating individuals, except the fines in Clauses 1, 2, 3, 5 Article 7, Clauses 3, 4, 6 Article 13, Clause 2 Article 25, Clause 1 Article 26, Clauses 1, 5, 6, 7 Article 27, Clause 8 Article 39, Clause 5 Article 41, Clauses 1 through 12 Article 42, Clauses 1 through 8 Article 43, Clauses 1 through 6 Article 45, Clause 3 Article 46 of this Decree. The fine imposed upon an organization is twice as much as that imposed upon an individual for committing the same administrative violation.

Therefore, the company does not notify you in advance when the contract expires, it will be fined from VND 2,000,000 to VND 6,000,000.

Best Regards!