WHAT SHOULD AN EMPLOYEE DO IF TERMINATED FROM A LABOR CONTRACT OR DISMISSED ILLEGALLY?

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1. What does labor contract mean?
2. What is Termination of labor contract?
3. In which cases does the company have the right to terminate the labor contract before the term?
4. In what cases does a company have the right to dismiss an employee?
5. What responsibilities does a company have if it terminates an employment contract or dismisses an employee illegally?
6. What should an employee do if being terminated a labor contract or dismissed illegally?

Terminating an employment contract or dismissing an employee is a significant event in the workplace and must be carried out in accordance with legal regulations. In this article, we will provide a detailed explanation of these issues and guide employee through the necessary steps to take if employee’s contract is terminated or employee is unlawfully dismissed, based on the current labor laws of Vietnam.

1. What does labor contract mean?

According to Article 13 of Article 13 of the Labor Code 2019, an Employment Contract is an agreement between the employee and the employer, outlining the rights and obligations of both parties concerning employment, wages, working hours, and other working conditions. The contract type can be:

Indefinite-term employment contract;
Definite-term employment contract (less than 36 months);
Seasonal or specific work employment contract (less than 12 months);

2. What is Termination of labor contract?

Terminating an employment contract refers to ending the agreement between the employee and the employer. This can occur for various reasons, including changes in job requirements, working conditions.

Dismissing an employee involves the employer unilaterally terminating the employee’s contract due to violations of labor regulations or specific reasons as stipulated in Article 36 of the Labor Code 2019.

3. In which cases does the company have the right to terminate the labor contract before the term?

According to Article 34 of the Labor Code 2019, the company has the right to terminate an employment contract before its term in the following cases:

“Article 34. Cases of Terminating Employment Contracts

1. Expiration of the Employment Contract;

2. Completion of the Work as Specified in the Employment Contract;

3. Mutual Agreement to Terminate the Employment Contract;

4. The Employee is Convicted of a Criminal Offense Without Suspension or Does Not Qualify for Release According to Clause 5, Article 328 of the Criminal Procedure Code, Receives the Death Penalty, or is Prohibited from Performing the Job Specified in the Employment Contract by a Final Court Judgment;

5. A Foreign Employee Working in Vietnam is Expelled by a Final Court Judgment or a Decision of a Competent State Agency;

6. The Employee Dies; is Declared Incapable of Civil Conduct by the Court; is Missing or Deceased;

7. The Employer is an Individual Who Dies; is Declared Incapable of Civil Conduct by the Court; is Missing or Deceased...;

8. The Employee is Dismissed Due to Disciplinary Action;

9. The Employee Unilaterally Terminates the Employment Contract;

10. The Employer Unilaterally Terminates the Employment Contract;

11. The Employer Grounds the Employee;

12. The Work Permit Expires for a Foreign Employee Working in Vietnam;

13. In Cases Where the Probation Period Specified in the Employment Contract is Not Met or One Party Cancels the Probation Agreement;”

4. In what cases does a company have the right to dismiss an employee?

According to Article 36 of the Labor Code 2019, the company has the right to dismiss employees in the following cases:

“Article 36. The Employer’s Right to Unilaterally Terminate the Employment Contract

The employer has the right to unilaterally terminate the employment contract in the following cases:

a) The employee consistently fails to complete work as specified in the employment contract, as determined by performance evaluation criteria in the employer’s regulations. These performance evaluation regulations must be issued by the employer but must consult the employee representative organization at the workplace if one exists;

b) The employee has been ill or injured and unable to work for 12 consecutive months (for indefinite-term contracts) or 6 consecutive months (for definite-term contracts ranging from 12 to 36 months), or more than half the term of a definite-term contract lasting less than 12 months, without the ability to return to work...;

c) Due to natural disasters, fires, dangerous epidemics, enemy invasions, or production and business downsizing as required by competent state authorities, and the employer has taken all remedial measures but is still forced to reduce the workforce;

d) The employee is absent from the workplace beyond the specified time limit...;

đ) The employee reaches retirement age...;

e) The employee voluntarily quits without a valid reason for 5 consecutive working days or more;

g) The employee provides false information when entering into the employment contract;”

From this, it is evident that the company has the right to dismiss employees in the following situations:

Serious violations of labor regulations: Employees continuously violate company rules and regulations after being reminded or warned.
Failure to complete assigned tasks: When the employee’s work performance does not meet requirements after a correction period.
Fraudulent behavior or causing significant damages: Such as fraud in work, deceit, or causing substantial damage to company property.
Force majeure events: Natural disasters, epidemics, wars, etc.

Additionally, according to Clause 2 of Article 36 of the Labor Code 2019, when the company dismisses an employee, it must adhere to the legally prescribed notice periods:

“When unilaterally terminating the employment contract under points a, b, c, d, and Clause 1 of this Article, the employer must notify the employee as follows:

a) At least 45 days for indefinite-term contracts;

b) At least 30 days for definite-term contracts lasting from 12 to 36 months;

c) At least 3 working days for definite-term contracts lasting less than 12 months and for cases specified in point b of this Clause;

d) For certain industries, professions, or specific jobs, the notice period must comply with government regulations;”

5. What responsibilities does a company have if it terminates an employment contract or dismisses an employee illegally?

If the company terminates an employment contract or dismisses an employee unlawfully, they must compensate according to the provisions of Article 41 of the Labor Code 2019 as follows:

“Article 41. Obligations of the Employer When Unilaterally Terminating the Employment Contract Illegally

The employer must re-employ the employee according to the previously agreed employment contract; pay wages, social insurance, health insurance, and unemployment insurance for the days the employee was not working, and provide the employee with an amount equivalent to at least 2 months' salary as stipulated in the employment contract.

After being re-employed, the employee must return any severance allowances or unemployment benefits received from the employer.

If there are no longer positions or jobs as specified in the employment contract but the employee still wishes to work, both parties must agree to amend or supplement the employment contract.

If the employee does not wish to continue working, in addition to the amount specified in Clause 1 of this Article, the employer must provide severance pay as stipulated in Article 46 of this Code to terminate the employment contract.

If the employer does not wish to re-employ the employee and the employee agrees, in addition to the amount the employer must pay as specified in Clause 1 of this Article and severance pay as stipulated in Article 46 of this Code, both parties must agree on an additional compensation amount for the employee, but not less than 2 months' salary as stipulated in the employment contract to terminate the employment contract.”

Compensation for damages: Payment of wages, severance pay, and other amounts as regulated.
Severance pay: If the employment contract is terminated unlawfully, the company must pay severance as stipulated in Article 46 of the Labor Code 2019.

6. What should an employee do if being terminated a labor contract or dismissed illegally?

If employment contract is terminated or employee is unlawfully dismissed, employee can take the following steps:

Collect evidence: Retain all documents related to the employment contract, termination notices, and other relevant documents.
Request an explanation: Send a written request to the company asking for a clear explanation of the reasons and legal basis for terminating the contract or dismissing. According to Article 38 of the Labor Code 2019, the company must provide specific and reasonable reasons when terminating an employment contract.
File a complaint: If the request for an explanation is unsuccessful or employee does not receive a reasonable response, employee can file a complaint with the local labor management agency or labor inspectorate as per Article 7, Decree 45/2013/ND-CP. This agency is responsible for inspecting and handling labor-related complaints.
Initiate legal action: If the complaint is not satisfactorily resolved, employee can file a lawsuit in court to protect rights as stipulated in Article 47 of the Labor Code 2019. The court will review the evidence and decide on the dispute resolution according to legal regulations.

Terminating employment contract or dismissing employee are serious decisions by the employer that can significantly impact the employee's life and career. However, by understanding the legal regulations and following the necessary steps, employees can protect their rights and seek reasonable compensation.

To ensure employee’s rights are fully protected, it is advisable to seek legal advice from experts or lawyers experienced in labor law. Phong & Partners provides all legal services with the highest quality – the result of professionalism, dedication, and effective support from the entire system for the utmost benefit of our clients.

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