2019 Labor Code will come into effect in less than two months. The 2019 Labor Code introduces many new regulations compared to the 2012 Labor Code, with the most notable change being related to the termination of labor contracts in Vietnam.
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From 2021, How Do Employees in Vietnam Terminate Labor Contracts in Accordance with the Law? (Illustration)
As of January 1, 2021, which is also when the Labor Code 2019 takes effect, employees in Vietnam will terminate labor contracts under the following cases in compliance with the law:
1. Automatic termination of labor contracts in Vietnam
- The labor contract expires, except for the case stipulated in Clause 4, Article 177 of this Code.
- Completion of work under the labor contract.
- Both parties agree to terminate the labor contract.
- The employee is sentenced to prison but does not benefit from a suspended sentence or is not in the case of being released as prescribed in Clause 5, Article 328 of the Criminal Procedure Code, sentenced to death, or is prohibited from doing the work stated in the labor contract by a legally effective court judgment or decision.
- The foreign employee working in Vietnam is deported by a legally effective court decision or a decision by a competent state authority.
- The employee dies; is declared by the court to lose civil act capacity, is missing, or has died.
- The employer, as an individual, dies; is declared by the court to lose civil act capacity, is missing, or has died. If the employer is not an individual, the operation ceases, or a specialized agency for business registration under the provincial People’s Committee announces that there is no legal representative or authorized person to perform the legal representative’s rights and obligations.
- The employee is disciplined and dismissed.
- The employee unilaterally terminates the labor contract pursuant to Article 35 of this Code.
- The employer unilaterally terminates the labor contract pursuant to Article 36 of this Code.
- The employer lets the employee leave according to Articles 42 and 43 of this Code.
- The work permit expires for foreign employees working in Vietnam as prescribed in Article 156 of this Code.
- In case where the probation content in the labor contract is agreed upon, but the probation fails or one party cancels the probation agreement.
Compared to the Labor Code 2012, the 2019 Labor Code has expanded the cases of labor contract termination to 13 cases, an increase of 3 cases over the 2012 Labor Code.
2. Unilateral termination of labor contracts in Vietnam
Case 1: Termination of labor contracts with an advance notice period
The employee has the right to unilaterally terminate the labor contract but must notify the employer in advance as follows:
- At least 45 days if working under an indefinite-term labor contract;
- At least 30 days if working under a definite-term labor contract with a term of 12 to 36 months;
- At least 3 working days if working under a definite-term labor contract with a term of less than 12 months;
- For certain specific industries, occupations, or jobs, the advance notice period is as regulated by the Government of Vietnam.
In the Labor Code 2019, the right to unilaterally terminate labor contracts for employees has been enhanced. Many experts believe that the 2019 Labor Code was issued in a direction more favorable to employees than employers.
The right to unilaterally terminate labor contracts is also an enhanced benefit for employees. Under the 2012 Labor Code, employees signing definite-term contracts needed to meet statutory conditions and abide by the advance notice period to unilaterally terminate the labor contract. However, under the 2019 Labor Code, employees only need to provide the correct advance notice period without requiring any specific condition.
Simply put, while the 2012 Labor Code required two conditions for unilateral termination, the 2019 Labor Code requires only one condition.
Case 2: Termination of labor contracts without advance notice
The employee has the right to unilaterally terminate the labor contract without advance notice in the following cases:
- The employee is not assigned the correct job or work location, or the working conditions agreed upon are not ensured, except as provided in Article 29 of this Code;
- The employee is not paid in full or on time, except as provided in Clause 4, Article 97 of this Code;
- The employee is mistreated, beaten, or subjected to abusive language, actions affecting health, dignity, and honor; forced labor;
- The employee is sexually harassed in the workplace;
- Pregnant female employees must resign as prescribed in Clause 1, Article 138 of this Code;
- The employee reaches retirement age according to the provisions of Article 169 of this Code, unless otherwise agreed by the parties;
- The employer provides dishonest information as prescribed in Clause 1, Article 16 of this Code, affecting the execution of the labor contract.
This is a completely new regulation compared to the Labor Code 2012. Lawmakers have based this on practical cases while applying the 2012 Labor Code and its inadequacies to promulgate the 2019 Labor Code, which specifically regulates the right to unilaterally terminate labor contracts without advance notice in certain special cases.
The above are the cases where employees terminate labor contracts in compliance with the law. If the employee terminates the labor contract without falling into the above cases, it will be considered an unlawful termination and the employee must perform obligations under Article 40 of the Labor Code 2019. Specifically, the employee must:
- Not receive severance allowance;
- Compensate the employer half a month’s salary according to the labor contract and an amount equivalent to the salary according to the labor contract for the days without advance notice;
- Reimburse the employer for training expenses as stipulated in Article 62 of this Code.
Le Hai
