Understanding Employment Contract Termination

Dec 31, 2024

HR & Payroll

Understanding Employment Contract Termination

In the context of employment contracts, terminating an employment contract is a significant event that requires strict legal regulation. This is because it often has major socio-economic consequences. To protect both labor relations and employee rights, the law clearly defines various termination cases and guarantees employee rights through state regulation.

Table of Contents

Cases of Employment Contract Termination

According to Article 34 of the 2019 Labor Code, the law lists 13 specific cases in which an employment contract may end:

The employee’s contract expires, except when the employee is part of the executive committee of the labor representative organization.
The employee completes the tasks stated in the contract.
Both parties mutually agree to end the contract.
A court issues a final decision, and the employee faces imprisonment without probation or a legal restriction from performing the work outlined in the contract.
A foreign employee in Vietnam is expelled based on a legally binding decision.
The employee dies or a court declares them missing, deceased, or lacking legal capacity.
If the employer, as an individual, dies or is declared missing or incapacitated by a court. If the employer is an organization, it ceases operations or is dissolved by competent business authorities.
The employer dismisses the employee as a disciplinary measure.
The employee ends the contract unilaterally according to legal provisions.
The employer unilaterally ends the contract according to the law.
The employer terminates the contract under lawful conditions.
The work permit for a foreign employee in Vietnam expires.
The probation period does not meet the requirements, or either party cancels the probation agreement.

Unlawful Termination of Employment Contracts

Unlawful termination often leads to disputes, harming both labor relationships and broader social connections. Disputes may arise when either party fails to follow proper notice requirements, provides invalid reasons for termination, or neglects to consult with labor representatives or competent authorities.

Regulations on Advance Notice for Contract Termination

The law links advance notice for contract termination directly to the rights of both employees and employers. Articles 35 and 36 of the 2019 Labor Code specify different notice periods, which vary based on the type of contract and the reason for termination.

Advance Notice for Different Contract Types

For indefinite-term contracts, the party terminating the contract must give at least 45 days’ notice.
For fixed-term contracts between 12 and 36 months, the law requires at least 30 days’ notice.
For contracts shorter than 12 months, the notice period is at least 3 days.

Special Cases for Notice Periods

Certain industries, trades, or jobs follow different notice periods, as outlined in Article 7 of Decree No. 145/2020/ND-CP:

At least 120 days for indefinite-term contracts or fixed-term contracts of 12 months or more.
At least one-quarter of the contract’s duration for contracts shorter than 12 months.

Industries and jobs with special requirements include:

Aircraft crew members and aviation maintenance staff.
Enterprise managers, as defined by the Law on Enterprises.
Crew members on Vietnamese ships operating abroad or leased to work on foreign ships.

Cases Where No Advance Notice Is Required

In some situations, no advance notice is necessary. Here are the most common examples:

Employee-Initiated Termination Without Notice

An employee may terminate the contract without giving advance notice if:

The employer assigns tasks or work locations that violate the contract.
The employer fails to pay the full salary on time.
The employee suffers mistreatment or is coerced into labor.
Sexual harassment occurs at work.
A pregnant employee leaves due to work conditions negatively impacting the fetus.
The employee reaches retirement age unless both parties agree otherwise.
The employer provides false information that affects the contract.

Employer-Initiated Termination Without Notice

An employer may terminate the contract without advance notice in these situations:

The employee does not return to work within 15 days after the suspension of the contract ends.
The employee abandons their job for 5 consecutive working days without a legitimate reason.

Methods of Providing Notice for Contract Termination

Although there is no specific legal document dictating the format of the advance notice, ensuring proper evidence of compliance is essential. Both parties should take the following steps:

Employees should submit a resignation letter or email and request confirmation from management.
Employers may send a written notice or email to inform the employee about the termination.

Conclusion

Understanding the rules for terminating employment contracts is crucial for both employees and employers. Adhering to legal requirements helps avoid disputes and ensures fair labor relations. This guide explains key termination cases, notice periods, and exceptions, ensuring clarity and compliance with the 2019 Labor Code.

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NetViet offers comprehensive HR solutions for businesses entering or expanding in the Vietnamese market. Established in 2000, NetViet provides expert, seamless, and compliant HR solutions.

Legal Disclaimer: The information provided is for general informational purposes only and does not constitute legal advice. For specific legal advice on compliance in Vietnam, schedule a consultation with NetViet or consult legal counsel.

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