The termination of labor contract in Vietnam

The termination of labor contracts is an important legal event because of its legal consequences. Terminating the labor contract means ending the labor relations and, in some cases, it directly affects an employee’s life and work and may cause damage to employers. So that, both employee and employer shall consider carefully before deciding to terminate the labor contract and need to understand the provisions about the termination of labor contracts. Therefore, let Apolo Lawyers (Tel: (+84) 903.419.479) provide you with an overview of the termination of labor contracts in Vietnam.

The provisions of the law on the termination of labor contract include the following contents:

1. What is the termination of labor contracts?

According to clause 1, Article 13 of the Labor law 2019, “A labor contract is an agreement between an employee and an employer on a paid job, salary, working conditions, and the rights and obligations of each party in the labor relations.” The nature of the labor contract does not depend on the name of the contract but on the content of the agreement between the two parties in the contract, which shows paid job, salary, management, and supervision of a party with the other in the contract.

So, the termination of labor contracts is a legal event that one or both parties in the contract do not continue to implement the contract, terminate the rights and obligations of the two parties as agreed in the labor contract.

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In general, current Vietnamese Law stipulates three main groups of causes leading to the termination of labor contracts, such as: (i) naturally termination of labor contracts; (ii) Unilateral termination of labor contracts.

2. Naturally termination of labor contracts

Naturally termination of labor contracts is understood as a case that a labor contract terminates when there are certain legal events that the parties usually do not need to perform any additional legal obligations to terminate the labor contract. In the light of the Labor Law 2019, some cases are automatically graded termination of the labor contract in accordance with the following legal events:

The labor contract expires, except for the case specified in Clause 4 Article 177 of this Code.
The tasks stated in the labor contract have been completed.
Both parties agree to terminate the labor 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 labor 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 employer allows the employee to resign in accordance with Article 42 and Article 43 of this Code.
The work permit or a foreign employee expires according to Article 156 of this Labor Code.
The employee fails to perform his/her tasks during the probationary period under the labor contract or gives up the probation.

3. Unilateral termination of labor contracts

Unilateral termination of labor contracts is when one party voluntarily terminates the rights and obligations agreed upon in the labor contract without depending on the willingness of the other party.

3.1. The employee unilaterally terminates the labor contract

Unilateral termination of labor contracts is an important right of the employee. The employee can unilaterally terminate the labor contract in two ways:

First, unilateral termination of labor contracts without giving reasons but must provide the employer notices in advance.

An employee shall have the right to unilaterally terminate the employment contract, provided he/she notices 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 case of an employment contract with a fixed term of under 12 months;
The notice period in certain fields and jobs shall be specified by the government.

Second, unilateral termination of labor contracts without prior notice of the employee.

An employee is shall have the right to unilaterally terminate the employment contract without prior notice if he/she:

is not assigned to the work or workplace or not provided with the working conditions as agreed in the employment contract, except for the cases specified in Article 29 of this Labor Code;
is not paid adequately or on schedule, except for the case specified in Clause 4 Article 97 of this Code.
is maltreated, assaulted, physically or verbally insulted by the employer in a manner that affects the employee’s health, dignity, or honor; is forced to work against his/her will;
is sexually harassed in the workplace;
is pregnant and has to stop working in accordance with Clause 1 Article 138 of this Labor Code.
reaches the retirement age specified in Article 169 of this Labor Code, unless otherwise agreed by the parties; or
finds that the employer fails to provide truthful information in accordance with Clause 1 Article 16 of this Labor Code in a manner that affects the performance of the employment contract.

3.2. The employer unilaterally terminates the labor contract

Compared with the right of the employee to unilaterally terminate a labor contract, the right of the employer to unilaterally terminate a labor contract is much more limited. In order to terminate the labor contract, the employer must comply with the cases specified in Article 36, Labor Code 2019, specifically:

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 fewer 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 this Labor Code;
The employee reaches the retirement age specified in Article 169 of this Labor Code unless otherwise agreed by the parties;
The employee quits his/her fails to go to 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 this Labor Code in a manner that affects the recruitment.

Besides that, when unilaterally terminating the employment contract in any of the cases specified in points a, b, c, dd, and g clause 1 of Article 36, the employer shall inform the employer 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 fewer than 12 months and in the cases stipulated in Point b Clause 1 of this Article;
The notice period in certain fields and jobs shall be specified by the government.

>>> Read more: Labor contract in Vietnam

4. What can Apolo Lawyers do for our clients?

There is an overview of terminating the labor contract in Vietnam. But if you have any problems with the termination of labor contracts or anything else about labor and employment, feel free to contact Apolo Lawyers (Tel: (+84) 903.419.479). With a high – professional and experienced team of lawyers, Apolo Lawyers commits to providing you with optimal service fastly and effectively. Using our labor and employment service, Apolo Lawyers will help you no limited but include the following:

Consulting on the legal provisions on labor contracts such as: type of labor contracts, making and managing labor contracts, labor contracts dispute,…;
Consulting on building internal regulations, registration of labor regulations, internal regulations,…;
Consulting on issues related to a probationary period, probationary salary, disputes over probationary workers…;
Giving legal provisions on termination of labor contracts and unilateral termination of labor contracts;
Giving the provisions of the law on handling labor discipline dismissing workers;
Consulting on social insurance regimes for employees, social insurance procedures for businesses,…
Giving legal provision on collective labor agreements; consulting on registration, use, implementation, and settlement of disputes related to collective labor agreements;
Giving the provisions of the law on labor protection, labor safety;
Consulting to resolve disputes that have arisen and are arising.