How employers dismiss employees in Vietnam

Retiring employees in Vietnam is difficult for foreign-affiliated companies in Vietnam.

Vietnamese employers must be dismissed according to the employment contract

Vietnam's labor law is generally considered employee-friendly and requires that the dismissal process be carried out on a statutory basis, in accordance with formal requirements and procedures.

Vietnam's labor law is based on labor contracts, regardless of whether the employee is Vietnamese or foreign.Applies to all employers working in VietnamWill be done.

This law does not apply to foreigners working as intra-company transfers under a foreign labor contract in Vietnam. so that,It does not apply to expatriates who are registered at the Japanese headquarters, but it does apply to local hires in Vietnam.

It is very important for Vietnamese employers to understand the legal nature of employment contracts and the financial implications of employment in order to minimize employment risks and respond flexibly to the employment system.

Cancellation of employment contract

The contract will be canceled based on the conclusion of a labor contract between the employer and the employee.
According to Vietnamese labor law, the most common cases of contract termination are:

• Termination of labor contract
• Completion of the work described in the contract
• Both parties agree to cancel the labor contract
• Legal retirement age of employees
• Criminal punishment for employees
• Employee death
• Loss of movement of employees
• Layoffs due to economic conditions and structural changes in the company, such as mergers and acquisitions
• One-sided dismissal from an employee
• One-sided dismissal from employer

*Employers risk unilaterally receiving dismissal notices from employeesYou need to understand.

Notification of termination of employment contract between employer and employee, dismissal

Notice of cancellation of employment contract

If both the employer and the employee wish to terminate the employment contract for one or more of the above reasons, the other party must be notified. The period of advance notice will be subject to legal grounds and basically the employment contract.

Notice of dismissal to employees

When leaving an employee, the employer is required to notify the employee in question according to a legal schedule. Notifications to workers for a limited time must be given at least 15 days in advance.

The employer must also pay within 7 days in accordance with the following severance pay provisions.

Employee retirement qualifications and amount

Payment of severance pay to employees of employers

If the employment contract is canceled, the employer may be liable to pay severance pay to the employee in question. The nature of severance pay depends on the employee's salary, job title, time covered by social insurance, etc.

Employee retirement qualifications

Eligibility for retirement benefits is given to the companyApplies to all employees who have been working for 12 months or moreWill be done.
If an employer or employee retires in accordance with the dismissal policy, he / she is eligible for severance pay by providing a basis for the dismissal policy.

Amount of employee retirement allowance

Under the Vietnamese Labor Law, the retirement allowance is half a month's wage depending on the number of years of employment.
For example, an employee who has worked for the company for three years is eligible for a month and a half salary.

Deduction of social insurance premiums from retirement allowance

The employer may be able to deduct social insurance premiums from the total retirement allowance.
We recommend that you consult with a consultant who specializes in Vietnamese labor law and taxation regarding the amount to be deducted.

 

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