02 cases where employer must form a personnel reduction plan in Vietnam

What are the cases where employer must form a personnel reduction plan in Vietnam? - Nhat Truong (Bac Ninh)

02 cases where employer must form a personnel reduction plan in Vietnam

02 cases where employer must form a personnel reduction plan in Vietnam (Internet image) 

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

1. 02 cases where employer must form a personnel reduction plan in Vietnam

According to the provisions of Article 42 and Article 43 of the Labor Code 2019, 02 cases where enterprises must form a plan to cut down personnel include::

(1) Obligations of the employer in case of changes in structure, technology or changes due to economic reasons

- Changes in structure and technology include:

+ Changes in the organizational structure, personnel rearrangement;

+ Changes in processes, technology, equipment associated with the employer’s business lines;

+ Changes in products or product structure.

- Changes due to economic reasons include:

+ Economic crisis or economic depression;

+ Changes in law and state policies upon restructuring of the economy or implementation of international commitments.

- If the change affects the employment of a large number of employees, the employer shall develop and implement a labor utilization plan as prescribed. In case of new vacancies, priority shall be given to retraining of the existing employees for continued employment.

- In case the employer is unable to create provide employment and has to resort to dismissing employees, the employer shall pay them redundancy allowances as prescribed.

Note: The dismissal of employees in the cases mentioned in this Article shall only be implemented after a discussion with the representative organization of employees (if any) and after giving prior notice of 30 days to the People’s Committee of the province and the employees.

(2) Obligations of the employer in case of 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

- In case the 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 affects the employment of a large number of employees, the employer shall develop a labor utilization plan as prescribed.

- The current employer and the next employer shall implement the adopted labour utilization plan.

For both of the above cases, if the employer cannot solve the job and has to terminate the employee, the laid off employees will receive redundancy allowances as prescribed.

2. Cases in which an employer is prohibited from unilaterally terminating an employment contract in Vietnam

According to Article 37 of the Labor Code 2019, cases in which an employer is prohibited from unilaterally terminating an employment contract are as follows

- The employee is suffering from an illness or work accident, occupational disease and is being treated or nursed under the decision of a competent health institution, except for the following case:

The employee is sick or has an accident and remains unable to work after having received treatment for a period of 12 consecutive months in the case of an indefinite-term employment contract, for 06 consecutive months in the case of an employment contract with a fixed term of 12 – 36 months, or more than half the duration of the contract in case of an employment contract with a fixed term of less than 12 months.

Upon recovery, the employer may consider concluding another employment contract with the employee;

- The employee is on annual leave, personal leave, or any other types of leave permitted by the employer.

- The employee is pregnant, on maternal leave or raising a child under 12 months of age.

Thus, employer is prohibited from unilaterally terminating an employment contract in the above cases.

Nguyen Ngoc Que Anh

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