Dismissal is the highest level of disciplinary action taken by an enterprise against an employee. So, in the event of dismissal, is the employee entitled to severance allowance?
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Are employees who are fired eligible for severance pay? (Illustrative image)
Regarding this issue, LawNet would like to advise as follows:
Under what circumstances is an employee subject to disciplinary dismissal?
According to Article 126 of the 2012 Labor Code of Vietnam, dismissal may be applied by an employer as a form of discipline in the following cases:
- An employee commits an act of theft, embezzlement, gambling, intentional infliction of injury, use of drugs inside the workplace, disclosure of technological or business secrets or infringement of intellectual property rights of the employer, or acts which cause serious damage or threaten to cause serious damage to the assets or interests of the employer;
- An employee who has been subject to the disciplinary measure of prolonging the wage rise period commits recidivism when the disciplinary record has not yet been written off or an employee who has been subject to the disciplinary measure of removal from office commits recidivism;
- An employee has been absent from work without permission for a total of 5 working days within 1 month or 20 days within 1 year without plausible reasons. (Note: Plausible reasons include natural disaster, fire, illness of the employee or his/her next of kin with certification by a competent health establishment and other events defined in the internal working regulations)
Thus, according to the above regulations, the employee will be disciplined with the highest level of dismissal if they violate any of the 3 cases mentioned above. However, when applying the form of disciplinary dismissal, the employer must ensure the implementation according to the principles and procedures for handling labor discipline stipulated in Article 123 of the 2012 Labor Code.
Is the employee entitled to severance allowance when dismissed?
Based on Clause 1, Article 48 of the 2012 Labor Code, the employer is responsible for paying severance allowances to employees who have regularly worked for 12 months or more, with each working year being entitled to half a month’s salary when terminating the labor contract in the following cases:
- The labor contract expires, except the case specified in Clause 6, Article 192 of the 2012 Labor Code.
- The work stated in the labor contract has been completed.
- Both parties agree to terminate the labor contract.
- The employee is sentenced to imprisonment or death or is prohibited from performing the job stated in the labor contract under a legally effective judgment or ruling of a court.
- The employee dies or is declared by a court to have lost civil act capacity, be missing or dead.
- The individual employer dies or is declared by a court to have lost civil act capacity, be missing or dead; the institutional employer terminates operation.
- The employee unilaterally terminates the labor contract under Article 37 of the 2012 Labor Code.
- The employer unilaterally terminates the labor contract under Article 38 of the 2012 Labor Code; the employer lays off the employee due to structural or technological changes or because of economic reasons, merger, consolidation or division of the enterprise or cooperative.
Therefore, based on the above regulations, employees who terminate their labor contracts due to dismissal are not entitled to severance allowance. Hence, employees are not entitled to severance allowance when dismissed.
However, dismissed employees will be entitled to unemployment benefits if they meet the conditions stipulated in Clauses 2, 3, and 4, Article 49 of the 2013 Employment Law. Specifically, the conditions are as follows:
1. Participated in unemployment insurance when working under a labor contract or working contract:
- Paid unemployment insurance premiums for 12 months or more within 24 months before terminating an indefinite-term labor contract or a definite-term labor contract;
- Paid unemployment insurance premiums for 12 months or more within 36 months before terminating a seasonal labor contract or a specific job labor contract with a term of 3 months to less than 12 months.
2. Submitted an application for unemployment benefits at the employment service center as prescribed.
3. Has not found a job within 15 days from the day of submitting the unemployment insurance benefit application, except in the following cases: Performing military service, public security duties; studying for a period of 12 months or more; complying with a decision to apply measures to an education institution, compulsory education, compulsory detoxification center; under detention; serving a prison sentence; settling abroad; going to work abroad under a contract; deceased.
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- 2012 Labor Code
