04 cases of termination of employment contract ineligible for severance pay in Vietnam as of January 1, 2021

04 cases of termination of employment contract ineligible for severance pay in Vietnam as of January 1, 2021 (Internet image)

Case 1: Not falling in the following cases of termination of employment contract in Vietnam

According to Clause 1, Article 46, Article 34 of the Labor Code 2019, when terminating a labor contract does not fall into one of the following cases, the employer is not responsible for paying severance benefits to the employee, specifically:

1. The employment contract expires (except for the case where employment contract expires before the end of 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 2015, capital punishment or is prohibited from performing the work stated in the employment contract by an effective verdict or judgment of the court.

• The defendant is guiltless;

• The defendant is exempt from criminal liabilities or penalties;

• The defendant is not sentenced to imprisonment;

• A suspended jail sentence is imposed on the defendant;

• The length of the jail sentence is equal to or shorter than the length of the detention of  the defendant.

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

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

7. The employee is dismissed for disciplinary reasons.

8. The employee unilaterally terminates the employment contract in accordance with Article 35 of this Code.

9. The employer unilaterally terminates the employment contract in accordance with Article 36 of this Code.

Case 2: Employees eligible to receive pension according to the provisions of law on social insurance

According to Article 73 of the Law on Social Insurance as amended by Point c, Clause 1, Article 219 of the 2019 Labor Code, a worker will receive retirement pension when meeting the following conditions:

• Retirement ages of employees in normal working conditions shall be gradually increased to 62 for males by 2028 and 60 for females in 2035.
• From 2021, the retirement ages of employees in normal working conditions shall be 60 yeas 03 months for males and 55 years 04 months for females, and shall increase by 03 months for males and 04 months for females after every year.
• He/She has paid social insurance for at least 20 years

Case 3: Employees unilaterally terminating the employment contract against the law in Vietnam

According to Clause 1, Article 40 of the Labor Code 2019, an employee shall have the right to unilaterally terminate the employment contract, provided he/she notices the employer in advance:

- At least 45 days in case of an indefinite-term employment contract;

- At least 30 days in case of an employment contract with a fixed term of 12 – 36 months;

- At least 03 working days in case of an employment contract with a fixed term of under 12 months;

- The notice period in certain fields and jobs shall be specified by the government.

Case 4: An employer shall have the right to unilaterally terminate an employment contract n cases where the employee is not present at work without acceptable excuses for at least 05 consecutive working days

According to Clause 1, Article 46 of the Labor Code 2019, employers are not responsible for paying severance pay to employees in cases where the employee is not present at work without acceptable excuses for at least 05 consecutive working days;

This is a completely new regulation specified in the Labor Code 2019. This regulation helps protect the rights of employers when employees show a lack of awareness and responsibility when working and a lack of respect for employers. Therefore, in this case, the employer has the right to unilaterally terminate the labor contract without prior notice and will also have no obligation to pay severance pay to the employee. This regulation is appropriate and progressive to raise employees' working awareness as well as to support the management of employers.

Above are four cases of termination of employment contracts ineligible for severance pay in Vietnam as of January 1, 2021, to which employees need to pay attention to maximize their rights and benefits.

Le Vy

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