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How to dismiss someone: A guide to firing an employee in Vietnam

[UPDATED on 21-10-2021 by Miss Hồ Thị Thúy Hằng Senior Legal Advisor at PCA Company Services]

 

PROCESS OF COMPANY TERMINATING LABOR CONTRACT

When the Company wants to actively terminate the Labor Contract with the Employee in accordance with the law, it needs to comply with the conditions of Ground and Procedure. Here are 3 cases in which the Company can actively terminate the Labor Contract.

  • Company unilaterally terminates the labor contract according to the provisions of Article 36 of the Labor Code 2019:
  • Grounds for termination of labor contract:

Note that when terminating the labor contract in this case, the Company needs to have a reason prescribed by the law, specifically:

  1. The employee regularly fails to complete the work according to the labor contract.

The company must have, and issued a Regulation on assessing the level of work completion. This represents a set of rules thanks to which the work of a staff will be evaluated.

When building the Regulation on assessing the level of work completion of employees, the Company must consult with the representative organization of employees at the Company, if any.

  1. The employee has been treated for an illness or accident for 12 consecutive months for an indefinite term labor contract, 06 consecutive months for a definite term labor contract, and over half of the term for an employee with a seasonal labor contract service or for a certain job with a term of less than 12 months but the working capacity has not yet recovered.
  2. Due to natural disasters, fires, dangerous epidemics, enemy sabotage or relocation or downsizing of production and business at the request of competent state agencies, the Company has sought all remedies but still forced to reduce the workplace.
  3. The employee is not present at the workplace after the period of suspension of the performance of the labor contract.

Within 15 days from the expiry date of the temporary suspension of the performance of the labor contract, if the employee is not present at the workplace, the Company has the right to unilaterally terminate the labor contract for the employee.

  1. Employee reaches retirement age.

When the employee reaches the retirement age, the Company has the right to terminate the labor contract with the employee so that the employee can enjoy the social insurance regime in accordance with the law on social insurance, regardless of the period of participation in social insurance payment of the employee.

  1. The employee is not present at work without acceptable excuses for at least 05 consecutive working days.

When an employee is absent from work for 5 consecutive days or more without a valid reason, such as: himself or his family member is sick (certified by a competent medical facility); natural disaster, fire, etc., the Company has the right to unilaterally terminate the labor contract with the employee. On the contrary, if an employee leaves for 5 consecutive days or more with a legitimate reason and the Company unilaterally terminates the labor contract with the employee, this will be considered illegal.

  1. Employee provided dishonest information when entering into labor contract, affecting the recruitment of the Company.

  • Procedures for terminating the labor contract:

In addition to having a reason for termination in section 1, the following conditions must be met:

  • The company needs to collect documents and make a Minute if necessary to prove that the above unilateral termination of the labor contract is in accordance with the law.
  • The company also needs to comply with the notice period for the employee if the case specified at Points a, b, c, e and g in Section 1. The notice period is as follows:
  • At least 45 days for an indefinite term labor contract;
  • At least 30 days for definite-term labor contracts with a term from 12 months to 36 months;
  • At least 03 working days for a definite-term labor contract with a term of less than 12 months or for case (b).
  • Company terminates the labor contract according to the provisions of Articles 42 and 43 of the Labor Code:
  • Grounds for termination of labor contract:
  1. Company has a change in technology structure or for economic reasons.

Structural or technological change is a change in part or all of machinery, equipment, advanced technological processes with higher labor productivity, changes in products or product structure leading to the reduction in the use of labor; economic reason is that the Company falls into a crisis or economic downturn; implement State policies and laws when restructuring the economy or implementing international commitments.

  1. The division, partial division, consolidation, the merger of the Company; sale, lease, change the type of business; Transfer of ownership and right to use the Company’s assets.

The company must be responsible for retraining employees to create the maximum ability to continue using employees in new jobs. If a new job cannot be found, the employee shall be dismissed.

Note that during the unilateral termination of this labor contract, the Company does not recruit new employees to do the job of the employee who has lost his or her job.

  • Procedures for terminating the labor contract:
  • In case of affecting the employment of many employees, the Company must develop a plan for the use of labor.

When developing this plan, the Company must consult with the representative organization of employees at the Company, if any. The labor use plan must be publicly notified to the employees within 15 days from the date of approval.

  • The case of severance at point (a) shall be carried out only after consulting with the representative organization of employees at the Company, if any, and notifying 30 days in advance to the provincial People’s Committee and to the employees.
  • In addition, the Company needs to keep documents, Decisions and Plans to prove that the Company has grounds to terminate the labor contract.
  • Company terminates the labor contract when the employee violates labor discipline leading to dismissal.
  • Dismissal cases:
  • Employee engaged in theft, embezzlement, gambling, intentionally causing injury, using drugs at work;
  • Employee has acts of disclosing business secrets, technology secrets, infringing upon the Company’s intellectual property rights;
  • Employee commits acts of causing serious damage or threatens to cause particularly serious damage to the property and interests of the Company;
  • Employee sexually harassed other person at work stipulated in the internal labor regulations;
  • Employee is disciplined for prolonging the time limit for salary increase or dismissal but re-offends while the discipline has not been removed;
  • Employee is not present at work for 5 cumulative days within 30 days or 20 cumulative days within 365 days from the first day of absence without a justified reason.
  • Cases of not disciplining employees:
  • Taking sick leave, convalescence; leave with the consent of the Company;
  • Being held in custody or temporary detention;
  • Waiting for the results of the competent authorities to investigate, verify and conclude on the violation of theft, disclosure of business secrets, etc. prescribed in Clauses 1 and 2, Article 125 of the Labor Code 2019;
  • Pregnant female employees; employees taking maternity leave, raising children under 12 months old;
  • Having a mental illness or another illness that makes them lose their ability to perceive or control their behavior.

 

Prohibited behaviors when handling discipline: Labor discipline is applied to employees who commit violations that are not specified in the Internal Labor Regulations or are not agreed upon in the signed labor contract or there is no provision in the labor law.

  • Simple process for labor discipline:

  • Legal documents and references:
    • Labor Code 2019;
  • Decree No. 145/2020/ND-CP dated December 14, 2020 detailing and guiding the implementation of a number of articles of the Labor Code on working conditions and labor relations.