Do companies have to close the social insurance book upon termination of an employment contract in Vietnam?

Do companies have to close the social insurance book upon termination of an employment contract in Vietnam? (Internet image)

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

1. Do companies have to close the social insurance book upon termination of an employment contract in Vietnam?

Pursuant to Article 48 of the Labor Code 2019, responsibilities of the parties upon termination of an employment contract are 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.

At the same time, according to Clause 5, Article 21 of the Law on Social Insurance 2014, To provide accurate, sufficient and prompt information and documents relating to the payment of social insurance premiums and enjoyment of social insurance at the request of competent state management agencies or social insurance agencies.

Thus, according to the above regulations, when the employee leaves the job, the company is responsible for confirming and returning the social insurance book to the employee (in other words, closing the social insurance book).

2. What are the penalties for failing to close the social insurance book incorrect according to the regulation in Vietnams?

- Pursuant to Clause 2, Point b, Clause 4, Article 12 and Clause 1, Article 6 of Decree 12/2022/ND-CP, the following fines shall be imposed upon an employer for failing to close the social insurance book incorrect according to the regulations

+ A fine ranging from VND 1.000.000 to VND 2.000.000 shall be imposed if the violation involves 01 - 10 employees;

+ A fine ranging from VND 2.000.000 to VND 5.000.000 shall be imposed if the violation involves 11 - 50 employees;

+ A fine ranging from VND 5.000.000 to VND 10.000.000 shall be imposed if the violation involves 51 - 100 employees;

+ A fine ranging from VND 10.000.000 to VND 15.000.000 shall be imposed if the violation involves 101 - 300 employees;

+ A fine ranging from VND 15.000.000 to VND 20.000.000 shall be imposed if the violation involves 301 employees or more.

- In addition to the above fine, the company must also complete procedures to confirm the employee's social insurance payment period after contract termination.

3. What should employees do if the company does not close the social insurance book in Vietnam?

If the company does not close the social insurance book, the employee must do the following:

(i) Complaints

If the company does not close the social insurance book, the employee has the right to complain directly to the company. If the employee does not agree with the company's resolution or the deadline expires but the complaint is not resolved, the employee will make a second complaint to the Chief Inspector of the Department of Labor, War Invalids, and Social Affairs.

(Pursuant to Clause 1 and Clause 2, Article 15 of Decree 24/2018/ND-CP).

(ii) Initiate a lawsuit in court according to the provisions of the law.

Employees can directly submit a lawsuit to the district People's Court where the company is headquartered according to civil proceedings to request settlement or request the Labor Arbitration Council to resolve without needing Conduct conciliation and complaints.

(Pursuant to point d, clause 1 and clause 7, Article 188 of the Labor Code 2019).

Nguyen Ngoc Que Anh

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