Tiếng Việt
中文Short answer: This article compiles Q&A on common labor law issues: conditions for employees’ entitlement to severance allowance and job-loss allowance; work-stoppage salary; working hours and rest; and employers’ responsibilities upon termination of labor contracts. Main basis: the Labor Code 2019 (effective from 01/01/2021).
Legal basis
- Labor Code 2019 — Article 34 (cases of labor contract termination), Article 46 (severance allowance), Article 47 (job-loss allowance), Article 48 (responsibilities upon termination of labor contracts), Article 99 (work-stoppage salary);
- Decree 145/2020/ND-CP guiding implementation of the Labor Code 2019.
Q&A on employees’ rights upon termination of labor contracts
When is an employee entitled to severance allowance?
An employee who has worked regularly for an employer for 12 months or more is entitled to severance allowance upon termination of the labor contract in the cases prescribed by law (contract expiry, agreed termination, lawful unilateral termination by the employee, etc.). Amount: half a month’s salary for each year of work; the working time for calculation is total actual working time minus periods of unemployment insurance participation and periods for which severance or job-loss allowance has been paid.
Related services
Commercial Contracts
If you are preparing to sign, review or handle a dispute arising from a contract, ANT Legal can help assess key terms, legal risks and suitable handling options.
When does job-loss allowance apply?
When the employer dismisses employees due to organizational/technological restructuring, economic reasons, enterprise division, separation, consolidation or merger, or upon cessation of operations, employees who have worked regularly for 12 months or more enjoy job-loss allowance: 01 month’s salary for each year of work, but at least 02 months’ salary.
Is an employee who unilaterally terminates unlawfully entitled to allowance?
No. An employee who unilaterally terminates a labor contract unlawfully is not entitled to severance allowance and must compensate the employer.
Q&A on employees’ work-stoppage salary
When is an employee paid work-stoppage salary?
When work must stop through no fault of the employee: if due to the employer’s fault, full salary is paid; if due to power/water incidents not caused by the employer or force majeure, the salary is agreed by the parties but not lower than the minimum wage.
What about prolonged force majeure work stoppage?
For stoppages of 14 working days or less, the agreed work-stoppage salary must not be lower than the minimum wage; for 15 working days or more, the salary is agreed by the parties.
Q&A on employers’ responsibilities upon contract termination
What must the employer pay upon termination of a labor contract?
Within 14 working days from the date of termination, the employer must fully pay all amounts related to the employee’s rights (salary, severance/job-loss allowance if any, etc.); in special cases this may be extended but not beyond 30 days. The employer must also complete procedures confirming social insurance and unemployment insurance participation periods and return original papers kept from the employee (if any).
May the employer keep the employee’s papers?
No. Article 17 of the Labor Code 2019 strictly prohibits employers from keeping originals of employees’ personal papers, diplomas and certificates.
Frequently asked questions
Which salary is the basis for calculating allowances?
The salary under the labor contract averaged over the 06 consecutive months before the employee quits or loses the job.
Can employees agree on higher allowances than the law?
Yes. The law provides minimum levels; the parties may agree on higher levels in labor contracts, collective labor agreements or enterprise regulations.
Where are allowance disputes resolved?
Individual labor disputes over allowances may be resolved through labor mediators, the Labor Arbitration Council or the Court under litigation procedures.
Notes on applying current legislation
Many enterprises miscalculate the base working time for allowances (failing to deduct unemployment insurance participation periods), leading to over- or underpayment and disputes. Before deciding to terminate contracts of a large number of employees, enterprises should carefully review financial obligations. Contact ANT Legal lawyers at 0966.475.966 for advice.
Common risks to note
- Calculating allowances on total working time without deducting unemployment insurance periods;
- Late payment beyond 14 working days upon contract termination;
- Keeping originals of employees’ diplomas and certificates;
- Unilaterally terminating contracts on improper grounds, having to reinstate and compensate.
How can ANT Legal help?
ANT Legal advises on labor law for enterprises and employees: labor contracts, discipline, contract termination, allowances and labor dispute resolution. For prompt advice, please contact our lawyers at 0966.475.966.
Related articles
- Labor law Q&A No. (03)
- Labor law Q&A No. (01)
- Is it unlawful for employers to keep original diplomas and certificates of employees?
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- Order and procedures for registering changes of legal representatives for LLCs and joint-stock companies
