Responsibilities of the parties upon termination of an employment contract in Vietnam

Responsibilities of the parties upon termination of an employment contract in Vietnam (Internet image)

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

1. Responsibilities of the parties upon termination of an employment contract in Vietnam

Specifically, Article 48 of the Labor Code 2019 stipulates responsibilities of the parties upon termination of an employment contract as follows:

- Within 14 working days following the termination of an employment contract, both parties shall settle all payments in respect of the rights and interests of each party. In the following cases, such period may be extended, but shall not exceed 30 days:

+ Shutdown of business operation of the employer that is not a natural person;

+ Changes in the organizational structure, technology or changes due to economic reasons;

+ Full division, partial division, consolidation, merger of the enterprise; sale, lease, conversion of the enterprise; transfer of the right to ownership or right to enjoyment of assets of the enterprise or cooperative;

+ Natural disasters, fire, hostility or major epidemics.

- Priority shall be given to payment of the employees’ salaries, social insurance, health insurance, unemployment insurance, severance allowance and other benefits under the collective bargaining agreement and employment contracts in case of shutdown, dissolution or bankruptcy of an enterprise or cooperative.

- The employer has the responsibility to:

+ Complete the procedures for verification of duration of participation in social insurance and unemployment insurance, return them and original copies of the employee’s other documents (if any);

+ Provide copies of the documents relevant to the employee’s work if requested by the employee. The employer shall pay the cost of copying and sending the documents.

2. Cases of termination of an employment contract in Vietnam

Pursuant to Article 34 of the Labor Code 2019, cases of termination of an employment contract include:

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

- 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.

Ho Quoc Tuan

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