ILLEGAL UNILATERAL TERMINATION OF LABOUR CONTRACTS
Posted 10:33 Date 29/01/2021
Mr. Nguyen Van An asked: “I work as a market officer for a branch of a company in Quang Nam with headquarters in Ho Chi Minh City. In March 2015, I signed a labour contract with the company, each year the company re-signed the labor contract once. In March 2020, the company decided to make me and a number of employees in Quang Nam stop working because of the expiration of the labor contract term without signing a new labour contract. I want to know whether the company is in accordance with the law or not. If it does not comply with the law, what should I do to protect my rights?

Firstly, the company making you stop working because of the expiration of the contract is against the law. Pursuant to Clause 2, Article 22 of the Labor Code 2012 regarding the type of labor contract, when the labor contract expires, within 30 days, the two parties must sign a new labor contract. In case the two parties sign a new labor contract which is a definite-term labour contract, only one more time can be signed, then if the employee continues to work, an indefinite-term labour contract must be signed. In case of not signing, the signed contract becomes an indefinite-term labour contract. Thus, the company is only allowed to sign a definite-term labour contract with you up to 2 times, if you continue to work after that, the company must sign an indefinite-term labour contract. The fact that the company signed a labor contract with a definite term of 01 year with you up to 05 times is contrary to the law. In March 2017, whether the company signed a labor contract with you or not, whatever kind of term is the contract, from a legal perspective, the company and you have established a contractual relationship that is indefinite-term labour contract.

Secondly, as analyzed above, the current labour contract between you and the company is an indefinite-term one, so the company quitting you for no good reason is considered illegally unilateral termination. Therefore, the company must fulfill the obligations prescribed in Article 42 of the Labor Code 2012 as follows:

Article 42. Obligations of employers in cases of illegal unilateral termination of employment contracts

1. The employer shall reinstate the employee in accordance with the original employment contract, and shall pay the wage, social insurance and health insurance for the period during which the employee was not allowed to work, and additionally at least 2 month wage as stipulated in the employment contract;

2 Where the employee does not wish to return to work, in addition to the compensation stipulated in Clause 1 of this Article, the employer shall pay the severance allowance in accordance with Article 48 of this Code.

3. Where the employer does not wish to reinstate the employee, and the employee agrees, in addition to the compensation as stipulated in Clause 1 of this Article and the severance allowance as stipulated in Article 48 of this Code, the two parties shall negotiate additional compensation which shall be at least equal to two months’ wage as stipulated in the employment contract, in order to terminate the employment contract.

4. Where there is no longer a vacancy for the position or work as agreed in the employment contract and the employee still wishes to continue working, the employer shall pay the compensation as stipulated in Clause 1 of this Article and both parties shall negotiate to amend and supplement the employment contract.

Therefore, to protect your benefits, you can negotiate with the company to continue working and enjoy the related benefits. In case no negotiation can be made, a lawsuit can be taken to a competent People's Court for settlement.

For more specific information, please email or phone to PHONG & PARTNERS to be consulted by our lawyers.

 

 

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