FAQs: Termination of Labor Contracts in Vietnam

Termination of Labor Contracts in Vietnam

FAQs: Termination of Labor Contracts in Vietnam (According to Labor Code 45/2019/QH14)

1. What are the main legal grounds for terminating a labor contract in Vietnam?

Termination can happen in several lawful situations:

  • Contract expiration: The labor contract ends when its fixed term concludes. In some cases, such as for employee representatives, the term may extend.

  • Project completion: If a contract is tied to a specific task or project, it concludes when the job is completed.

  • Mutual agreement: Both parties may agree to end the contract at any point.

  • Other valid reasons: These include imprisonment, retirement, permanent incapacity, or force majeure (e.g., natural disasters, downsizing, or business restructuring).

2. Can both employers and employees terminate the labor contract unilaterally?

Yes — either party can unilaterally terminate a contract, but certain conditions must be met.

  • Employers can do so for reasons like poor performance, long-term illness, restructuring, or serious misconduct. However, they must follow legal procedures and document all actions.

  • Employees are allowed to resign without stating a reason, provided they give proper advance notice according to the contract type.

3. What are the legal notice periods?

The minimum notice period depends on contract duration:

  • Indefinite-term contracts: At least 45 days

  • Fixed-term contracts (12–36 months): At least 30 days

  • Contracts under 12 months: Minimum of 3 working days

In certain industries, the law may prescribe different notice rules.

4. What steps must be followed for a lawful termination?

To comply with the law, the party initiating the termination should:

  • Issue written notice within the required timeframe

  • Prepare documentation explaining the reason for termination (e.g., performance records, disciplinary action)

  • Settle severance and final payments as required

  • Liquidate the contract properly in cases of mutual termination or contract expiration

5. What responsibilities does the employer have upon termination?

Upon lawful termination, the employer is obligated to:

  • Pay severance if the employee worked for 12+ months and was not dismissed for misconduct

  • Return documents and provide employment certificates if requested

  • Complete all final payments (e.g., salaries, unused leave) within 14 working days unless otherwise agreed

6. What if the termination is unlawful?

If the termination violates the law, consequences may include:

  • Reinstating the employee to their former role

  • Paying compensation for lost income and potential damages

  • Facing legal disputes, which could affect the company’s reputation

7. Are there different rules for foreign employees?

Yes. A contract may be terminated if:

  • The employee’s work permit expires or is revoked

  • The individual is deported under an official decision

Foreign employees must also comply with all conditions outlined in labor and immigration laws.

8. How can both parties ensure compliance?

Here are a few key tips:

  • Study the Labor Code 2019 and relevant updates

  • Maintain accurate records for contracts, evaluations, and communication

  • Seek expert advice from HR professionals or legal consultants when needed

These FAQs are based on the current Vietnamese Labor Code 45/2019/QH14 and related legal guidance as of June 2025. For specific cases, always consult the latest official sources or legal counsel.

 

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