Relevant Legislation
Labour Code of the Socialist Republic of Vietnam, 23 June 1994 (Amended 2 April 2002, eff ective 1 January 2003)7
Unlawful Termination, Damages and Compensation
Article 39 outlines the circumstances under which the unilateral termination of a labour contract is considered to be unlawful. These include where the employee is suffering from an occupational illness or work-related injury and is being treated for this and where the employee is on annual leave or another form of permissible leave. Furthermore, as stipulated under Article 111(3):
An employer is prohibited from dismissing a female employee or unilaterally terminating the labour contract of a female employee for reason of marriage, pregnancy, taking maternity leave, or raising a child under twelve (12) months old, except where the enterprise ceases its operation. During pregnancy, maternity leave, or raising a child under twelve (12) months old, a female employee shall be entitled to postponement of unilateral termination of her labour contract or to extension of the period of consideration for labour discipline, except where the enterprise ceases its operation.
Article 155(4) further provides:
When an employer decides to retrench or to terminate unilaterally the labour contract of an employee who is a member of the executive committee of the trade union of the enterprise, the approval of the executive committee of the trade union of the enterprise must be obtained. Where the employee is the chairman of the executive committee of the trade union of the enterprise, the approval of the immediately superior trade union organisation must be obtained.
Under Article 41, where an employer unlawfully terminates a labour contract he/she must:
[…] re-employ the employee for the position stipulated in the signed contract and must pay compensation equal to the amount of wages and wage allowances (if any) for the period the employee was not allowed to work, plus at least two months’ wages and wage allowances (if any).
In the event that the employee does not wish to return to work, they shall be given a severance allowance pursuant to Article 42 of the Labour Code (‘equal to the aggregate amount of half of one month’s wages for each year of employment plus wage allowances (if any)’). Where the employer does not wish to re-employ the employee and the employee is in agreement, then ‘in addition to the compensation provided for in the first paragraph of this clause and the allowance stipulated in arti cle 42 of this Code, the two parties shall agree on an additional amount of compensation for the employee for the purpose of termination of the labour contract’. If an employee unlawfully terminates the contract then they will not be able to claim a severance allowance and must additionally pay the employer: ‘compensation equal to half of one month’s wages and wage allowances (if any)’ [Article 41(2)]. Furthermore, under Article 41(3), ‘Where an employee unilaterally terminates the labour contract, he shall be liable for payment of compensation for costs of training (if any) in accordance with the provisions of the Government’.
Finally, pursuant to Article 41(4):
Where a labour contract is unilaterally terminated in breach of the provisions on giving advance notice, the party in breach shall pay compensation to the other party in a sum equal to the wages which would otherwise have been paid to the employee for those days not notified.
Endnotes
7 Labour Code of the Socialist Republic of Vietnam, 23/06/1994, available at http://www. global-standards.com/Resources/VNLaborCode1994-2002.pdf (accessed 16/05/11).
