What should an employee do when a labor contract is terminated?

Notes on termination of labor contracts

The Labor Code stipulates the conditions under which employers (referred to as “Employer“) may terminate labor contracts (referred to as “Labor Contract“) of their employees (referred to as “Employee“), as well as the necessary steps for execution. But not every Employer follows these rules.

So what should Employees do to safeguard their rights and interests if they find themselves in this situation? BLawyers Vietnam presents below information on the termination of a Labor Contract signed between an Employer and Employee in accordance with the law of Vietnam. It does not address the terms of the labor contract’s probationary period, which may be inadequate for one party.

1. Checking a signed Labor Contract and labor policies of an Employer

An Employee needs to review the details of the Labor Contract, including its term, termination provisions, and the parties’ respective rights and obligations:

(i) The term of the Labor Contract will depend on the type of signed Labor Contract, such as an indefinite-term contract or a definite-term contract (with the time of termination of the contract’s validity within 36 months from the effective starting date of the contract).

(ii) The terms of termination of the Labor Contract may be expressly stated therein. Vietnamese labor law will be applicable in the absence of any party designation in the Labor Contract. Whenever the parties specify terms for termination that are not in accordance with Vietnamese labor law, Vietnamese labor law still governs the termination.

(iii) Regarding the rights and obligations of the parties, an Employee should consider:

a. Salaries, bonuses, other subsidies, allowances and benefits, compulsory social insurance (“SI”), health insurance, unemployment insurance, unused annual leave…

In addition, issues about protection of business secrets, technology secrets along with training, fostering or improving skills, qualifications (if an Employer has paid the cost)… also need to be considered.

b. Labor policies such as internal labor regulations, collective labor agreements, policies on wages, bonuses and allowances…

(iv) For foreign employees working in Vietnam, if the law requires a foreign employee to have a work permit or confirmation of work permit exemption, it is necessary to check these types of documents.

2. Checking the process of terminating a Labor Contract of an Employer

Apart from situations in which an Employer may unilaterally end a labor contract under the Labor Code 2019 with an Employee as stated in Article 36, or where the Employee is dismissed, the Employer may also lay off the Employee in situations involving technological changes, organizational restructuring, economic reasons, division, separation, consolidation, merger, selling, leasing, or changing the nature of business, transfer of ownership, or use of cooperatives’ or enterprises’ assets.

Vietnamese law specifies the requirements that an Employer must follow for terminating a Labor Contract (reasons for termination), the termination procedures, and an Employee’s notice period prior to the termination of the Labor Contract in each of the aforementioned cases. Specifically, when the most severe disciplinary measure is dismissal, the Employer must adhere to the stringent guidelines outlined in the Labor Code 2019.

3. Reviewing the payments

As stated in Section 1 above, in addition to providing an Employee with salaries, bonuses, other subsidies, allowances and benefits to an Employee, an Employer is required to fulfill obligations to competent State authorities regarding compulsory SI payments and the deduction of personal income tax from the Employee’s pay. Consequently, it is the Employee’s responsibility to gather and verify that the Employer has fulfilled these duties.

4. Determining a strategy to work with an Employer

Should an Employee ascertain that an Employer has unlawfully and unilaterally terminated a Labor Contract, the Employee may engage in negotiations to come to a mutual agreement or conduct a complaint or initiate a lawsuit to the competent authorities for consideration and settlement.

As a result, the Employee must gather enough documentation about the labor process as well as proof of the Employer’s violations.

The above is not official advice from BLawyers Vietnam. If you have any questions or suggestions about the above, please contact us at consult@blawyersvn.com. We would love to hear from you.

Date: 04 April 2024

Writer: Thu Ha


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