Termination and Severance — Vietnam

Opus research pass, 2026-04-10. Sources: ILO NATLEX official English translation of Labor Code 2019, Vietnamese law firm publications (ASL LAW, ADK Lawyers, Viet An Law, LeTran Law, PLF Law), and international employment guides (CMS, Multiplier, Rivermate). All article references are to Bộ luật Lao động 2019 (Law 45/2019/QH14) unless otherwise noted.

Key structural notes:

1. Vietnam distinguishes between severance allowance (trợ cấp thôi việc, Art. 46) and job-loss allowance (trợ cấp mất việc làm, Art. 47) — different triggers and rates.
2. The 2019 Labor Code (effective 2021-01-01) replaced the 2012 Code and significantly expanded employer grounds for unilateral termination.
3. Unemployment insurance (BHTN) offsets employer severance: years covered by UI are deducted from the working period used for severance/job-loss calculation.
4. Vietnam has no at-will employment. All terminations must follow statutory grounds and procedures.

1. 主要法源

• Bộ luật Lao động 2019 (Labor Code No. 45/2019/QH14)

  • Art. 34: Cases of employment contract termination (13 grounds)
  • Art. 35: Employee's right to unilateral termination
  • Art. 36: Employer's right to unilateral termination (grounds + notice)
  • Art. 37: Situations where employer may NOT unilaterally terminate
  • Art. 38: Withdrawal of unilateral termination
  • Art. 39: Dismissal as a disciplinary measure (kỷ luật sa thải)
  • Art. 40: Illegal unilateral termination (by employer)
  • Art. 41: Employer's obligations upon illegal termination
  • Art. 42-44: Restructuring / economic layoff obligations
  • Art. 46: Severance allowance (trợ cấp thôi việc)
  • Art. 47: Job-loss allowance (trợ cấp mất việc làm)
  • Art. 48: Settlement of payments upon termination
  • Art. 122-125: Labor discipline (dismissal as disciplinary penalty)
  • Art. 137: Protections for female employees (pregnancy/maternity)

• Nghị định 145/2020/NĐ-CP (Decree 145/2020) — implementing regulations on labor contracts, working hours, labor discipline, and severance

• Luật Bảo hiểm xã hội 2014 (Social Insurance Law) — retirement pension eligibility (relevant to Art. 46 severance exclusion)

• Luật Việc làm 2013 (Employment Law) — unemployment insurance framework (BHTN); employer/employee/state contributions

• 主管機關:

  • Bộ Lao động - Thương binh và Xã hội (MOLISA): https://www.molisa.gov.vn/
  • ILO NATLEX official text: https://natlex.ilo.org/dyn/natlex2/natlex2/files/download/110469/VNM110469%20Eng.pdf

2. 核心規定

2.1 合法資遣事由 (Just Cause for Dismissal)

Vietnam law provides three distinct pathways for an employer to end employment: (A) mutual/statutory termination under Art. 34, (B) employer unilateral termination under Art. 36, and (C) dismissal as disciplinary action under Art. 122/125.

A. 勞動合同終止事由 — Art. 34 (Contract Termination) 🟢

Art. 34 lists 13 cases of employment contract termination:

B. 雇主單方解除 — Art. 36 (Employer Unilateral Termination) 🟢

The employer may unilaterally terminate the labor contract in these cases:

1. Employee repeatedly fails to perform duties per evaluation criteria in employer's regulations (Art. 36.1.a)
2. Employee's illness/injury — treatment for ≥12 consecutive months (indefinite contract), ≥6 months (12-36 month contract), or ≥ half the contract term (contract <12 months) without recovery (Art. 36.1.b)
3. Force majeure — natural disaster, fire, dangerous epidemic, enemy sabotage, relocation by government order — employer has taken all remedial measures but must still reduce workforce (Art. 36.1.c)
4. Employee fails to report within 15 days after suspension of contract performance (Art. 36.1.d)
5. Employee reaches retirement age — unless otherwise agreed (Art. 36.1.đ)
6. Employee abandonment — absent without approved leave for ≥5 consecutive working days (Art. 36.1.e)
7. Employee provides false information during hiring that affected the conclusion of the contract (Art. 36.1.g — new in 2019 Code)

C. 紀律解僱 — Art. 122, 125 (Disciplinary Dismissal / sa thải) 🟢

The most severe form of termination. Grounds under Art. 125:

1. Theft, embezzlement, gambling, intentional infliction of injury, or drug use at the workplace
2. Disclosure of business/technology secrets of the employer
3. Acts that cause serious damage or threaten very serious damage to employer's assets/interests
4. Sexual harassment at the workplace as defined in employer's internal regulations
5. Repeated offense — employee who has received a salary deferral (one step below dismissal) commits another disciplinary act during the period of that sanction
6. Unauthorized absence totaling 5 days within 30 days, or 20 days within 365 days, without legitimate reason

Procedural requirements for disciplinary dismissal 🟢:

• Employer must hold a formal disciplinary meeting (Art. 122.1)
• Employee must receive at least 5 working days' advance notice of the meeting (Decree 145/2020)
• Employee's representative labor organization (union) must be notified and invited
• Employee has the right to self-defense, engage a lawyer, or have a representative (Art. 122.3)
• Disciplinary action must be taken within the statute of limitations: 6 months from the date of violation (extendable to 12 months for theft, embezzlement, bribery, drug use, or acts requiring investigation) (Art. 123)
• Written disciplinary decision must be issued and served to the employee (Art. 122.5)

2.2 預告期 (Notice Period) 🟢

法條: Art. 36.2

Exceptions — no advance notice required 🟢(Art. 36.2):

• Art. 36.1.d: Employee fails to report within 15 days after suspension
• Art. 36.1.e: Employee absent ≥5 consecutive working days without approved leave

Violation penalty (Art. 40.1) 🟢:

• If employer fails to give proper notice, employer must pay employee wages for the unnotified days (i.e., the difference between required notice and actual notice given)

Employee's notice period (Art. 35) 🟢:

• Under the 2019 Code, employees may resign for any reason with advance notice:
  • Indefinite-term: 45 days
  • Fixed-term 12-36 months: 30 days
  • Fixed-term <12 months: 3 working days
• Certain situations allow immediate resignation without notice: employee not assigned agreed-upon work, not paid in full/on time, mistreated, pregnant (with medical certificate), etc.

2.3 資遣費計算公式 (Severance Formula) 🟢

Vietnam has two distinct allowances depending on the termination ground:

A. 離職津貼 — Severance Allowance (trợ cấp thôi việc) — Art. 46 🟢

Trigger: Contract termination under Art. 34, clauses 1, 2, 3, 4, 6, 7, 9, or 10

Formula:

Severance = 0.5 month's wage x years of eligible service

Excluded from severance (Art. 46.1) 🟢:

• Employees eligible for retirement pension (under Social Insurance Law)
• Employees dismissed as disciplinary action (Art. 34.8 — sa thải)

B. 失業津貼 — Job-Loss Allowance (trợ cấp mất việc làm) — Art. 47 🟢

Trigger: Contract termination under Art. 34, clause 11 (restructuring/economic layoff under Arts. 42-43)

Formula:

Job-Loss Allowance = 1 month's wage x years of eligible service
Minimum = 2 months' wages

Key distinction: Severance = 0.5 month/year; Job-loss = 1.0 month/year (minimum 2 months). The job-loss allowance is intentionally more generous because the termination is due to employer's business decisions, not employee conduct. 🟡

C. 失業保險抵扣機制 — Unemployment Insurance Offset 🟢

• Employer and employee each contribute 1% of salary to unemployment insurance (BHTN) under the Employment Law 2013
• State contributes an additional 1% (total: employer 1% + employee 1% + state 1%)
• The period during which UI premiums were paid is deducted from the eligible working period for severance/job-loss calculation
• In practice, most employees post-2009 (when UI became mandatory) will have significantly reduced or zero employer severance obligations for recent service years 🟠
• For service years before UI coverage (pre-2009 or uncovered periods), the employer bears full severance/job-loss allowance liability

2.4 經濟性裁員程序 (Economic Layoff Procedure) 🟢

法條: Arts. 42, 43, 44

Triggering Events (Art. 42.1) 🟢:

Art. 43: Enterprise division, merger, consolidation, sale, lease, or conversion affecting many employees also triggers this procedure.

Mandatory Procedure (Art. 42, 44) 🟢:

Labor utilization plan content (Art. 44) 🟡:

• List of current employees (by position, type of contract)
• Number of employees to be retained, retrained, redeployed, or terminated
• Measures to implement the plan
• Financial resources for implementation
• Timeline

Priority for retention 🟡:

• Employees with higher skills and longer service should be prioritized for retention
• Employees with labor contracts of longer remaining terms should be given priority

Failure to follow procedure results in the termination being deemed illegal (Art. 40), triggering Art. 41 remedies 🟢

2.5 非法解僱救濟 (Unlawful Dismissal Remedies) 🟢

法條: Art. 41

When an employer's unilateral termination or disciplinary dismissal is found illegal (vi phạm pháp luật):

Statute of limitations: Employee must file within 1 year from the date of discovering the violation 🟠

Forum: Employee may:

1. Request labor mediation (hòa giải) through a labor mediator
2. File a complaint with the labor inspectorate
3. Bring a lawsuit before the People's Court (Tòa án nhân dân)

2.6 合意終止 (Mutual Termination) 🟢

法條: Art. 34.3

• Both parties may agree to terminate the labor contract at any time
• Must be voluntary — coerced mutual termination may be challenged as illegal termination
• Employee is entitled to severance allowance under Art. 46 (mutual termination falls under Art. 34.3, which is covered by Art. 46)
• No specific form requirement in the Code, but written agreement is strongly recommended for evidence purposes 🟠
• Payment settlement must occur within 14 working days of termination (Art. 48)

2.7 特定族群解僱限制 (Protected Categories) 🟢

法條: Arts. 37, 137, 122.4

A. 禁止解僱期間 — Art. 37 (Employer may NOT unilaterally terminate) 🟢:

B. 孕婦保護 — Art. 137 (Female Employee Protections) 🟢:

• Employer may not dismiss or unilaterally terminate a female employee for reasons of marriage, pregnancy, maternity leave, or raising a child under 12 months (Art. 137.3)
• If the female employee's contract expires during pregnancy or while raising a child under 12 months, she is prioritized for contract renewal (Art. 137.3) 🟡
• Pregnant employees may unilaterally terminate without giving required advance notice if confirmed by a medical facility that continuing work would adversely affect the fetus (Art. 138.1)

C. 工會幹部保護 🟡:

• Art. 177: Employer may not unilaterally terminate, discipline, or transfer the job assignment of a trade union officer (cán bộ công đoàn) without prior agreement of the grassroots-level union executive committee
• Part-time union officers: require agreement of the upper-level union organization
• This protection applies during and for 6 months after the union officer's term

D. 紀律處分限制 — Art. 122.4 🟢:

Employer is prohibited from disciplining (including dismissal) employees who are:

• On sick leave, recovering from occupational injury/disease
• Detained or temporarily held by authorities
• Awaiting results of an investigation by competent authorities
• Pregnant female employees, on maternity leave, or raising a child under 12 months

3. 立法理由與實務見解

2019 Labor Code Reform — Key Changes from 2012 Code

Practical Issues 🟠

1. "Repeated failure to perform duties" (Art. 36.1.a) — requires the employer to have written performance evaluation criteria in internal regulations. Without documented KPIs and evidence of repeated failure, this ground is extremely difficult to sustain in court.

2. Disciplinary hearing formalities — courts strictly review procedural compliance. Missing a step (e.g., insufficient notice to employee/union, no written decision) can render the dismissal illegal regardless of the underlying merits.

3. Severance vs. UI offset — for long-tenure employees who joined before 2009 (when UI was not yet mandatory), the employer may owe significant severance for pre-UI years. Employers sometimes miscalculate by applying UI offset to the entire tenure.

4. Mutual termination abuse — some employers pressure employees into "mutual agreements" to avoid paying job-loss allowance. Courts may recharacterize these as illegal terminations if evidence of coercion exists.

4. 法律適用邊界與實務灰色地帶

• 🟠Performance-based termination: Art. 36.1.a requires "repeated" failure per "evaluation criteria set out in employer's regulations." In practice, one-time poor performance does not suffice. Employers must show: (1) documented evaluation criteria, (2) prior warnings, (3) repeated failure. Many employers lack sufficient documentation.

• 🟠Probationary period termination: Art. 27 allows either party to terminate during probation without notice and without severance if the job does not meet agreed conditions. But "not meeting agreed conditions" must be documented — arbitrary probation terminations are frequently challenged.

• 🟠Fixed-term contract non-renewal vs. termination: Under Art. 34.1, a fixed-term contract naturally expires without triggering Art. 36 (unilateral termination). However, if the employer has renewed twice already, the third renewal must be indefinite-term (Art. 20.1.b). Some employers manipulate by changing the job title slightly to reset the renewal count — this practice is legally risky.

• 🔴Retirement age: Under Art. 169 of the 2019 Code and Decree 135/2020, retirement age is gradually increasing: male from 60 to 62 (by 2028), female from 55 to 60 (by 2035). The transitioning age creates ambiguity in some years.

• 🟠Foreign employees: Work permit expiration (Art. 34.5) automatically terminates the contract. However, if the employer fails to assist in work permit renewal, some courts have treated this as constructive termination.

5. 常見雇主義務清單

• 🟢Identify correct legal ground for termination under Art. 34, 36, or 125 — document with evidence
• 🟢Provide advance notice: 45 days (indefinite), 30 days (fixed-term 12-36 months), 3 working days (<12 months)
• 🟢Hold formal disciplinary hearing if dismissing under Art. 125 — notify employee ≥5 working days in advance, invite union, allow self-defense
• 🟢Verify employee is NOT in a protected category (Art. 37): sick leave, annual leave, pregnant/maternity, paternity leave
• 🟢Calculate correct allowance: severance (0.5 month/year) or job-loss (1.0 month/year, min 2 months), deducting UI-covered years
• 🟢Settle all payments within 14 working days of termination (Art. 48) — may extend to 30 days in special cases
• 🟢Issue severance payment certificate and update social insurance book
• 🟢Return employee's personal documents (social insurance book, original diplomas if held)
• 🟡Economic layoff: prepare labor utilization plan (Art. 44), consult union, notify provincial labor department 30 days in advance
• 🟡Maintain performance evaluation records if using Art. 36.1.a as ground
• 🟡Obtain union executive committee's consent before terminating/disciplining a union officer (Art. 177)
• 🟠Written mutual termination agreement — not legally required, but strongly recommended for evidence

6. 與其他轄區比較

• vs. mexico: 🔶 差異 — Mexico has constitutional 3-month severance floor for unjustified dismissal; Vietnam has no such floor (0.5 month/year). Mexico offers reinstatement OR 20-days/year compensation as alternatives; Vietnam mandates reinstatement + back pay as primary remedy.
• vs. brazil: 🔶 差異 — Brazil uses FGTS (8% monthly deposits + 40% fine on dismissal without cause) as the severance mechanism; Vietnam uses direct employer payment (0.5 or 1.0 month/year). Brazil's aviso previo proporcional (30-90 days) is more generous than Vietnam's 45-day maximum.
• vs. taiwan: 🔷 相似 — Both require advance notice scaled by contract type, both distinguish between employer-initiated vs. employee-initiated termination, both offer reinstatement as remedy. Taiwan's severance (0.5 month/year under Labor Pension Act) matches Vietnam's rate.
• vs. china: 🔷 相似 — Both require documented grounds for termination, both mandate severance at approximately 1 month/year (China: N or N+1; Vietnam: 0.5 month/year for regular + UI offset). China's economic layoff requires labor bureau approval for 20+ employees; Vietnam requires provincial notification.

7. 資料來源

8. 待確認事項