Due to intricate occurrence of Covid 19, many
enterprises are forced themselves to reduce the number of employees for
maintaining the operation financially. Specifically, the employer has to make
difficult decision to terminate the labour contract with the employee. The termination of the labour
contract has to be considered carefully because of potential legal risks
brought up which dispute
lawyers in labour should be consulted before execution. Within this post, we are
not trying to resolve all cases but only aiming to brief some matters of
concern for preparation.
Employment Dispute Lawyers in
Vietnam
The employer could refer to the regulation in the Labor Code which
allows “an employer may unilaterally terminate a labor contract if as a result
of natural disaster, fire or another force majeure event as prescribed by law,
the employer, though having applied every remedial measure, has to scale down
production and cut jobs. Force majeure in this case is understood as (i)
Enemy-inflicates destruction, epidemics (ii) Relocation or narrowing of the
production and business sites, at the request of competent State agencies.
In particular, after applying corrective measures, over the time,
considering enterprise’s financial potential is insufficient as well as the
business production is reduced significantly due to epidemic, the employer may
consider unilaterally terminate labor contract with employee. However, employer
still have to abide by or ensure the rights to employee regarding the interests
which employee is entitle to receive when being unilaterally terminated labor
contract includes salary, severance allowance, social insurance, payment for
untaken leave days, the tax payment which employer must paid for employee.
Besides, employer also is subject to pay a compensation if consented by both
sides are employer and employee.
Firstly, employer is obliged to pay salary to employee timely and
fully as in the agreed labor contract by both parties;
Secondly, employer is responsible for paying the severance
allowance to employee whom has worked regularly for full 12 months or longer at
the rate of half of a month’s wage for each working year.
Thirdly, social insurance, employer is responsible for the fulfill
payment of social insurance and perform the closing insurance book for employee
after terminate the labour contract according to the law of social insurance.
Fourthly, if the income of employee subject to personal income
tax, employer must extract from the income of employee to submit the tax to tax
agency according to law on personal income tax.
ANT Lawyers – A labour dispute law
firm in Vietnam with international standard, local expertise and strong
international network. We focus on customers’ needs and provide clients with a
high quality legal advice and services. For advice or service request, please
contact us via email ant@antlawyers.vn, or call us +84 24 730 86 529.
