The employer unilaterally terminates the labor contract in Vietnam

What legal consequences will the employer have to bear if the employer unilaterally terminates the labor contract? Through the article below, Viet An Law Firm will present the legal consequences if the employer unilaterally terminates the labor contract in Vietnam.

Legal basis

• Articles 36 and 39 of the Vietnamese Labor Code 2019.

How is unilateral termination of a labor contract understood?

Unilateral termination of a labor contract is the case where the employer or employee terminates the labor contract according to the grounds, order, and procedures prescribed by law, leading to the termination of the labor contract. Terminate the legal effect of the labor contract before its expiration date regardless of the will of the other party in the labor relationship.

In essence, this is an act expressing the unilateral will of one party in the labor relationship not wanting to continue implementing the labor contract, leading to the termination of the rights and obligations of both parties in the labor contract.

What does an employer unilaterally terminate a labor contract mean?

This is a unilateral legal act of the employer wanting to terminate the labor relationship. The employer wants to cancel the agreement, rights, and responsibilities with the employee for objective reasons or due to the employee’s fault.

Regardless of the above cause, the ultimate consequence is the termination of the labor relationship, the employer escapes the rights and responsibilities agreed upon in the labor contract. Unilateral termination of the labor contract can cause the employer to suffer certain legal consequences.

Legal consequences when the employer unilaterally terminates the labor contract in Vietnam

In case of unilateral termination of the legal labor contract by the employer

Obliged to pay money and return documents to employees

When unilaterally terminating a labor contract, the employer is first responsible for resolving and fully paying the salaries and other income that the employee deserves but has not received during the working process.

In addition, if the employee has not yet taken annual leave or has not taken all the days of annual leave, the employer must pay annual leave to the employee and pay wages for the days the employee has not taken leave.

In addition, the employer is also obliged to complete the procedure to confirm the time of payment of social insurance and unemployment insurance and return it along with the original copy of other documents if the employer has kept the employee.

The Labor Code 2019 also adds the employer’s responsibility to provide copies of documents related to the employee’s working process if the employee requests (costs for copying and sending documents are paid by the employer). Reality shows that when terminating a labor contract, many employers only care about handing over work, paying benefits to employees, completing insurance confirmation procedures for employees, and often ignore returning their documents and providing Copies of documents related to the employee’s work history. This has affected the rights of the employee, causing difficulties for some employees when needing to prove their employment history when looking for a new job.

Obliged to pay benefits to employees

Employers are obliged to pay benefits to employees depending on each case whether the employee is entitled to severance pay or job loss benefits.

Working time to calculate severance pay and job loss benefits is the total time the employee worked for the employer minus the time the employee participated in unemployment insurance and the working time paid by the employer. severance pay, employment benefits. The salary used to calculate severance pay and job loss benefits is the average salary for 6 consecutive months under the labor contract before the employee quits and loses his or her job.

It can be seen that the Labor Code 2019 stipulates how to calculate the time for severance pay and job loss benefits which are deducted from the time the employee has participated in unemployment insurance according to the law on unemployment insurance is a reasonable regulation. Because employees participating in unemployment insurance for 12 months or more will receive unemployment benefits when they lose their jobs, they are no longer entitled to severance benefits. This regulation helps encourage employees to participate in unemployment insurance while also reducing the burden of paying severance benefits for employers.

The time limit for the employer to fulfill its obligations is 14 working days from the date of termination of the labor contract, except in some specific cases where the time limit may be extended but not exceeding 30 days, including according to Clause 1, Article 48 of the Labor Code 2019:

• The employer is not an individual who terminates operations.
• Employers change structure, technology, or for economic reasons.
• Division, separation, consolidation, merger; selling, leasing, converting business types; Transfer of ownership and rights to use assets of enterprises and cooperatives.
• Due to natural disasters, enemy fires, or dangerous epidemics.

The employer’s right to unilaterally terminate a legal labor contract

Employers will be released from the obligation to perform labor contracts, they will have the right to recruit new employees.

At the same time, the employer also has the right to request the employee to fully return all money and assets related to the employer’s benefits and production and business activities. The time limit for employees to perform the obligations corresponding to this right of the employer is also equal to the time limit for the employer to perform the responsibilities specified in Clause 1, Article 48 of the Labor Code 2019.

In case the employer unilaterally terminates the labor contract illegally

According to Article 39 of the 2019 Labor Code, there are two conditions to determine whether unilateral termination of a labor contract is illegal:

• violates the law on grounds for unilateral termination of labor contracts.
• violating the law on order and procedures for unilateral termination of labor contracts

When an employer unilaterally terminates a labor contract illegally, he or she must be responsible for compensating and remedying the consequences according to the provisions of Article 41 of the Labor Code 2019, including:

• Firstly, the employer must accept the employee back to work according to the concluded labor contract, must pay social insurance, health insurance, and unemployment insurance during the days the employee is not allowed to work, and must pay the employee an additional amount at least equal to 02 months’ salary according to the labor contract.

After being reinstated, the employee shall reimburse the employer for severance pay and job loss benefits, if received from the employer. In case there is no longer a position or job agreed upon in the labor contract but the employee still wants to work, the two parties shall agree to amend and supplement the labor contract. In case of violation of the provisions on the notice period, an amount corresponding to the salary according to the labor contract for the days without notice must be paid.

• Secondly, in case the employee does not want to continue working, in addition to paying salary, social insurance, health insurance, and unemployment insurance must be paid for the days the employee does not work and an additional amount must be paid to the employee. at least equal to 02 months’ salary according to the labor contract. Employers must pay severance benefits according to Article 46 of the Labor Code 2019 to terminate the labor contract.
• Thirdly, in case the employer does not want to take back the employee and the employee agrees, in addition to the salary, the employer must pay social insurance, health insurance, and unemployment insurance for the days the employee is not allowed to work and must pay Additional compensation for the employee is at least equal to 02 months’ salary according to the labor contract. Both parties agree on an additional compensation amount for the employee but at least equal to 02 months’ salary according to the labor contract to terminate the labor contract in Vietnam.

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