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

Responsibilities of the parties upon termination of an employment contract in Vietnam according to Article 48 of the Labor Code 2019 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.

2. The right of an employer to unilaterally terminates the employment contract in Vietnam

The right of an employer to unilaterally terminates the employment contract in Vietnam according to Article 36 of the Labor Code 2019 is as follows:

- An employer shall have the right to unilaterally terminate an employment contract in one of the following circumstances:

+ The employee repeatedly fails to perform his/her work according to the criteria for assessment of employees’ fulfillment of duties established by the employer. The criteria for assessment of employees’ fulfillment of duties shall be established by the employer with consideration taken of opinions offered by the representative organization of employees (if any);

+ 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;

+ In the event of a natural disaster, fire, major epidemic, hostility, relocation or downsizing requested by a competent authority, the employer has to lay off employees after all possibilities have been exhausted;

+ The employee is not present at the workplace after the time limit specified in Article 31 of the Labor Code 2019;

+ The employee reaches the retirement age specified in Article 169 of the Labor Code 2019, unless otherwise agreed by the parties;

+ The employee is not present at work without acceptable excuses for at least 05 consecutive working days;

+ The employee fails to provide truthful information during the conclusion of the employment contract in accordance with Clause 2 Article 16 of the Labor Code 2019 in a manner that affects the recruitment.

- When unilaterally terminating the employment contract in any of the cases specified in Point a, b, c, dd and g Clause 1 of Article 36 of the Labor Code 2019, the employer shall inform the employee  in advance:

+ at least 45 days in case of an indefinite-term employment contract;

+ at least 30 days in case of an employment contract with a fixed term of 12 – 36 months;

+ at least 03 working days in the case of an employment contract with a fixed term of less than 12 months and in the cases stipulated in Point b Clause 1 of Article 36 of the Labor Code 2019;

+ The notice period in certain fields and jobs shall be specified by the government.

- When unilaterally terminating the employment contract in the cases mentioned in Point d and Point e Clause 1 of Article 36 of the Labor Code 2019, the employer is not required to inform the employee in advance.

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