Company A is currently employing some foreign workers. These foreign workers do not participate in unemployment insurance. If these foreign workers terminate their labor contracts, will they be entitled to a severance allowance in Vietnam?
Article table of contents
Are foreign workers entitled to severance allowance in Vietnam?(Illustration)
According to Article 46 of the Labor Code 2019, the conditions for receiving a severance allowance are as follows:
When a labor contract is terminated in the following cases, the employer is responsible for paying severance allowance to the employee who has worked on a regular basis for a period of at least 12 months.:
- The employment contract expires, except for the case specified in Clause 4 Article 177 of this Code.
- The tasks stated in the employment contract have been completed.
- Both parties agree to terminate the employment contract.
- The employee is sentenced to imprisonment without being eligible for suspension or release apital punishment or is prohibited from performing the work stated in the employment contract by an effective verdict or judgment of the court;
- The employer that is a natural person dies; is declared by the court as a legally incapacitated person, missing or dead;
-The employer terminates its operation or is notified that there is no legal representative, the person authorized to perform the rights and obligations of the legal representative;
- The employee unilaterally terminates the employment contract in accordance with the law.
(Unless the employee is eligible for a pension, the employee's contract is terminated because he or she voluntarily quits work for 05 consecutive days or more without a plausible reason.)
The above regulation only refers to the subjects who are employees in general entitled to severance allowance. Along with that, Article 2 of the Labor Code 2019, also mentions the regulated entities of this code, including:
Article 2. Regulated entities
1. Employees, trainees, apprentices and other workers without labor relations.
2. Employers.
3. Foreign employees who work in Vietnam.
4. Other organizations and individuals directly related to labor relations.
Thus, based on the above regulations, foreign workers in Vietnam who have worked full-time for 12 months or more but terminate their labor contracts in one of the above cases will be entitled to a severance allowance paid by the employer (company A).
The level of severance allowance for foreign workers in Vietnam
According to Article 46 of the Labor Code 2019, the level of severance allowance for foreign workers is calculated according to the following formula:
| The level of severance allowance | = | 1/2 | x | Year(s) entitled to allowance | = | The average salary of six consecutive months according to the contract before leaving |
In which:
The number of working years to calculate severance allowance is the actual working time minus the time the employee has participated in unemployment benefits. The working time has been paid severance allowance and job loss allowance.
- Working time for the calculation of severance allowance of less than five years will be rounded as follows:
- Having odd months less than or equal to 06 months: Calculated as 1/2 year.
+ Odd months over 06 months: Round to the nearest year.
Bao Ngoc
