13 cases of termination of an employment contract in Vietnam as of January 1, 2021

13 cases of termination of an employment contract in Vietnam as of January 1, 2021 (Internet image)

Article 34 of the Labor Code 2019, which comes into force fromJanuary 1, 2019, stipulates 13 cases of termination of an employment contract in Vietnam, including:

1. The employment contract expires.

Except for the case specified in Clause 4 Article 177 of the Labor Code 2019 as follows: In case the employment contract with an employee that is a member of the management board of the internal employee representative organization expires before the end of his/her term of office, the existing contract shall be extended until the end of the term of office.

2. The tasks stated in the employment contract have been completed.

3. Both parties agree to terminate the employment contract.

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.

9. The employee unilaterally terminates the employment contract in accordance with Article 35 of the Labor Code 2019.

10. The employer unilaterally terminates the employment contract in accordance with Article 36 of the Labor Code 2019.

11. The employee is laid off by the employer in accordance with Article 42 and Article 43 of the Labor Code 2019.

12. The work permit or a foreign employee expires according to Article 156 of the Labor Code 2019.

13. The employee fails to perform his/her tasks during the probationary period under the employment contract or gives up the probation.

Thus, according to the Labor Code 2019, there are up to 13 cases of termination of an employment contract in Vietnam, while there are only 10 cases under the Labor Code 2012. The case where the employee fully meets the requirements on the time of payment of social insurance premiums and the age of retirement has been annulled. In addition, the Labor Code 2019 has added 04 new cases of termination of an employment contract in Vietnam as follows:

• The foreign employee working in Vietnam is expelled by an effective verdict or judgment of the court or a decision of a competent authority.

• The employee is laid off by the employer in accordance with Article 42 and Article 43 of the Labor Code 2019.

• The work permit or a foreign employee expires according to Article 156 of the Labor Code 2019.

• The employee fails to perform his/her tasks during the probationary period under the employment contract or gives up the probation.

This is one of the important new points of the Labor Code 2019, and this change is consistent with the actual situation of labor use in Vietnam. Employees and employers need to pay attention to these changes to adjust labor relations between the parties appropriately.

Thuy Tram

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