Legal Grounds for Termination
Termination of employment in Vietnam can occur for various reasons, including:
- Expiration of the Contract: The contract period ends.
- Mutual Agreement: Both parties agree to terminate the contract.
- Completion of Work: The work specified in the contract is completed.
- Retirement Age: The employee reaches retirement age.
- Misconduct or Poor Performance: The employee fails to perform their job.
- Health Reasons: The employee is unable to work after 12 months of treatment.
- Economic or Structural Changes: Layoffs due to company restructuring.
Termination Notice Requirements
Notice periods vary depending on the type of contract:
- Indefinite Contracts: Minimum 45 days’ notice.
- Fixed-term Contracts: Minimum 30 days’ notice.
- Contracts Under 12 Months: Minimum 3 working days’ notice.
Severance Pay Calculations
Severance pay is required for employees with at least one year of service. The calculation involves:
- Average Salary: Determine the average salary over the last six months.
- Length of Service: Multiply by 0.5 and then by the number of years of service.
- Rounding: Length of service is rounded up or down to the nearest half-year.
Employee Rights Upon Termination
Terminated employees are entitled to severance pay and notice. Additionally, they are entitled to payment for unused annual leave and other benefits.
Compliance and Best Practices
Employers must ensure compliance with all legal requirements to avoid disputes. Best practices include maintaining proper documentation, clear communication, and fair treatment.
Streamline Your Workforce and Focus on Growth
Don’t waste precious time. Get in touch with one of our outplacement experts today and learn how we can get your workforce back on track.
Understanding and complying with Vietnam’s labor law termination guidelines is crucial for maintaining a fair and compliant workplace. By following legal procedures and ensuring fair treatment, employers can minimize legal risks and maintain a positive work environment.
Want to stay up to date with the latest labour laws?
Our publications give you a clear overview of key labour law regulations. We cover major tax, labour law, payroll and visa information. It is designed to get you updated at-a-glance!
Please note that all the information listed below are to be used as a general guideline. For more detailed accounts of Vietnam employment laws and regulations, please visit the official governmental websites.
Updated on: 8th August 2024
Contact Us
Get in touch with one of us today to start streamlining your HR processes across Asia & the Middle East.
