New: Probationary period shall not be included in the calculation of severance allowance in Vietnam

This is a significant new point in Decree 148/2018/ND-CP amending and supplementing several articles of Decree 05/2015/ND-CP providing specific regulations and guidance on the implementation of the Labor Code in Vietnam.

According to Decree 148, the duration an employee actually works for the employer to calculate severance allowance, redundancy allowance in Vietnam includes:

- The duration the employee actually works under the Employment contracts;

- The time sent for study;

- The duration of sick leave, maternity leave, treatment of occupational accidents, occupational diseases;

- Weekly rest days, paid leave, leave for union activities;

- Leave for performing civic duties that the employer pays for;

- Work stoppage, leave not due to the employee's fault;

- Suspension of work according to the Labor Code;

Thus: The probation period is no longer included in the actual working time for calculating severance allowance, redundancy allowance as stipulated by the old regulations at Decree 05/2015/ND-CP, except for the following cases which are still counted in the actual working time for calculating severance allowance, redundancy allowance in Vietnam:

- Employment contracts with agreed probation period effective before the Labor Code 2012;

- Employment contracts ended before December 15, 2018, and the employer has not yet calculated severance pay or job loss allowance.

Decree 148/2018/ND-CP which comes into force in Vietnam from December 15, 2018.

- Ngoc Duyen -

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