Obligations of the employer upon illegal unilateral termination of the employment contract in Vietnam

Obligations of the employer upon illegal unilateral termination of the employment contract in Vietnam (Internet image)

Regarding this issue, LawNet would like to answer as follows:

1. Cases of termination of an employment contract in Vietnam

Cases of termination of an employment contract under Article 34 of the Labor Code 2019 include:

- The employment contract expires, except for the case specified in Clause 4 Article 177 of the Labor Code 2019.

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.

- 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 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.

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

- 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.

- The employee is dismissed for disciplinary reasons.

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

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

- The employer allows the employee to resigns 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.

2. Obligations of the employer upon illegal unilateral termination of the employment contract in Vietnam

Obligations of the employer upon illegal unilateral termination of the employment contract in Vietnam according to Article 41 of the Labor Code 2019 are as follows:

- The employer that illegally unilaterally terminates an employment contract with an employee shall reinstate the employee in accordance with the original employment contract, and pay the salary, social insurance, health insurance and unemployment insurance premiums for the period during which the employee was not allowed to work, plus at least 02 months’ salary specified in the employment contract.

After the reinstatement, the employee must return the severance allowance or redundancy allowance (if any) to the employer.

Where there is no longer a vacancy for the position or work as agreed in the employment contract and the employee still wishes to work, the employer shall negotiate revisions to the employment contract.

Where the employer fails to comply with the provisions on notice period in Clause 2 Article 36 of the Labor Code 2019, the employer shall pay a compensation that is worth the employee’s salary for the remaining notice period from the termination date.

- In case the employee does not wish to return to work, in addition to the compensation prescribed in Clause 1 of this Article, the employer shall pay a severance allowance in accordance with Article 46 of the Labor Code 2019 in order to terminate the employment contract.

- Where the employer does not wish to reinstate the employee and the employee agrees, in addition to the compensation mentioned in Clause 1 of Article 41 of the Labor Code 2019 and the severance allowance mentioned in Article 46 of the Labor Code 2019:

Both parties shall negotiate an additional compensation which shall be at least 2 months’ salary under the employment contract in order to terminate the employment contract.

>> CLICK HERE TO READ THIS ARTICLE IN VIETNAMESE