Distinguishing the notice of employment agreement termination upon agreement expiration and unilateral termination of employment agreement

Under the current labor law, when an employment agreement expires or is unilaterally terminated, the employer must notify the employee. However, notices differ in these cases, requiring both the employer and the employee to distinguish clearly to avoid disputes. For instance, upon the agreement expiration, the employee might erroneously expect notice akin to unilateral termination. 

 

Criteria  Notice of Employment Agreement termination under Article 45 of the Labor Code 2019  Prior notice in case of unilateral termination of Employment Agreement under Article 36 of the Labor Code 2019 
Time of issuance of the notice  Current labor law does not specify a particular time for issuing this notice. Therefore, the employer has flexibility in determining the timing for issuing this notice. 

 

Depending on the type of employment agreement, the employer must notify the agreement termination at least 03, 30, or 45 days in advance. 

 

Note: For certain industries, professions, or specialized jobs, this notice period may extend up to 120 days. 

 

The legality of Employment Agreement termination 

without issuance of such notice 

In cases where the employer fails to issue the termination notice, the employment agreement termination remains legal. 

 

Accordingly, the issuance of the termination notice is an administrative procedure and does not affect the legal validity of the employment agreement termination. 

 

If the employer fails to issue the termination notice within the specified period as mentioned above, the unilateral termination of the employment agreement will be considered illegal under Article 39 of the Labor Code 2019. 

 

Accordingly, the issuance of the termination notice is a prerequisite for the unilateral termination of the agreement to be legally valid. 

 

Legal consequences of failing to issue a notice 
  • If the employment agreement expires and the employee continues working, the failure to issue a notice will not result in an administrative penalty. 

 

  • If the employee does not continue working, the failure to issue a notice will incur a fine ranging from VND 2,000,000 to VND 6,000,000 (for the organizational employer).

 

 

In case of failing to issue a notice, the organizational employer will be fined from VND 2,000,000 to VND 6,000,000. 

In addition to the administrative responsibility, the employer must also bear responsibility to the employee as follows:

 

1. The employer must allow the employee to return to work and pay the following amounts: 

 

  • Salary, social insurance, health insurance, and unemployment insurance for the days the employee was unable to work;  

 

  • An amount at least equal to 2 months’ salary under the employment agreement; and 

 

  • An amount corresponding to the salary under the employment agreement for the days the employer failed to issue the prior termination notice. 

 

2. If the employee does not wish to continue working: in addition to the payments in section i, the employer must pay severance allowance. 

 

3. If the employer does not wish to accept the employee back and the employee agrees: in addition to the payments in sections i and ii, the employer must pay compensation equal to at least 2 months’ salary under the employment agreement. 

See more:

1/ Can employees and employers agree to severance pay before terminating the labor contract?

2/ Labor contracts of foreign workers working in Vietnam are void due to lack of a work permit

3/ Unilateral termination of the labor contract and labor discipline – What options are available to the employer?


Disclaimers:

This article is for general information purposes only and is not intended to provide any legal advice for any particular case. The legal provisions referenced in the content are in effect at the time of publication but may have expired at the time you read the content. We therefore advise that you always consult a professional consultant before applying any content.

For issues related to the content or intellectual property rights of the article, please email cs@apolatlegal.vn.

Apolat Legal is a law firm in Vietnam with experience and capacity to provide consulting services related to Employment and contact our team of lawyers in Vietnam via email info@apolatlegal.com.

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