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:
- 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.
- The 2019 Labor Code (effective 2021-01-01) replaced the 2012 Code and significantly expanded employer grounds for unilateral termination.
- Unemployment insurance (BHTN) offsets employer severance: years covered by UI are deducted from the working period used for severance/job-loss calculation.
- Vietnam has no at-will employment. All terminations must follow statutory grounds and procedures.
Bộ luật Lao động 2019 (Labor Code No. 45/2019/QH14)
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:
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.
Art. 34 lists 13 cases of employment contract termination:
| Clause | Ground |
|---|---|
| 1 | Contract expires (fixed-term) |
| 2 | Job stated in contract has been completed |
| 3 | Mutual agreement of both parties |
| 4 | Employee sentenced to imprisonment or prohibited from performing the contractual job |
| 5 | Foreign employee's work permit expires (without renewal) |
| 6 | Employee dies; declared missing or dead by court |
| 7 | Employer (individual) dies; declared missing or dead; employer (organization) ceases operations |
| 8 | Employee is disciplinarily dismissed (sa thải) |
| 9 | Employee unilaterally terminates under Art. 35 |
| 10 | Employer unilaterally terminates under Art. 36 |
| 11 | Employer restructures due to structural/technological/economic changes; or division/merger/sale of enterprise (Arts. 42-43) |
| 12 | Employer's operating license or registration is revoked |
| 13 | Employer provides false information that affected the conclusion of the contract (new in 2019 Code) |
The employer may unilaterally terminate the labor contract in these cases:
The most severe form of termination. Grounds under Art. 125:
Procedural requirements for disciplinary dismissal 🟢:
法條: Art. 36.2
| Contract Type | Minimum Advance Notice |
|---|---|
| Indefinite-term (không xác định thời hạn) | 45 calendar days |
| Fixed-term 12-36 months (xác định thời hạn) | 30 calendar days |
| Fixed-term <12 months | 3 working days |
| Seasonal/specific job <12 months | 3 working days |
Exceptions — no advance notice required 🟢(Art. 36.2):
Violation penalty (Art. 40.1) 🟢:
Employee's notice period (Art. 35) 🟢:
Vietnam has two distinct allowances depending on the termination ground:
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
| Element | Rule |
|---|---|
| Rate | Half (0.5) month's wage per year of service |
| Minimum service | Full 12 months of regular work |
| Wage base | Average wage of 6 consecutive months immediately preceding termination (Art. 46.3) |
| Eligible service | Total actual working period minus: (a) period covered by unemployment insurance (BHTN), (b) period for which severance/job-loss allowance was already paid |
| Minimum payment | Half a month's wage (i.e., if eligible service rounds to 1 year, pay 0.5 month) |
Excluded from severance (Art. 46.1) 🟢:
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
| Element | Rule |
|---|---|
| Rate | One (1.0) full month's wage per year of service — double the severance rate |
| Minimum service | Full 12 months of regular work |
| Minimum payout | 2 months' wages (even if service is only 12 months) |
| Wage base | Average wage of 6 consecutive months immediately preceding termination |
| Eligible service | Same deduction as severance: minus UI-covered period and prior allowances |
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. 🟡
法條: Arts. 42, 43, 44
| Category | Examples |
|---|---|
| Structural change | Organizational restructuring, workforce reorganization |
| Technological change | Changes to production processes, technology, machinery, equipment |
| Economic reasons | Economic crisis, recession; implementation of state restructuring policies; international commitments |
Art. 43: Enterprise division, merger, consolidation, sale, lease, or conversion affecting many employees also triggers this procedure.
| Step | Requirement |
|---|---|
| 1 | Develop a labor utilization plan (phương án sử dụng lao động) per Art. 44 |
| 2 | Consult the grassroots-level employee representative organization (trade union) on the plan — employer must consider union's views |
| 3 | Prioritize retraining and redeployment to new positions within the enterprise |
| 4 | Only after exhausting redeployment options may employer terminate contracts |
| 5 | Give 30 days' advance notice to the provincial People's Committee (Sở LĐ-TB&XH) |
| 6 | Give 30 days' advance notice to each affected employee |
| 7 | Pay job-loss allowance (Art. 47) to each terminated employee |
Labor utilization plan content (Art. 44) 🟡:
Priority for retention 🟡:
Failure to follow procedure results in the termination being deemed illegal (Art. 40), triggering Art. 41 remedies 🟢
法條: Art. 41
When an employer's unilateral termination or disciplinary dismissal is found illegal (vi phạm pháp luật):
| Remedy | Detail |
|---|---|
| Reinstatement | Employer must reinstate employee to original position under original contract (Art. 41.1) |
| Back pay | Pay full wages + social insurance + health insurance + unemployment insurance contributions for the entire period the employee was out of work (Art. 41.1) |
| Supplementary compensation | Pay at least 2 months' wages as additional compensation on top of back pay (Art. 41.1) |
| Severance (if employee declines reinstatement) | If employee does not wish to return, employer pays: back pay + supplementary compensation (≥2 months) + severance allowance under Art. 46 (Art. 41.2) |
| Employer declines reinstatement | If employer does not wish to reinstate and employee agrees: back pay + supplementary compensation (≥2 months) + severance (Art. 46) + additional negotiated compensation of at least 2 months' wages (Art. 41.3) |
| Notice pay | If employer violated notice requirements (Art. 36.2): pay wages for the unnotified days (Art. 41.5) |
Statute of limitations: Employee must file within 1 year from the date of discovering the violation 🟠
Forum: Employee may:
法條: Art. 34.3
法條: Arts. 37, 137, 122.4
| Protected Situation | Duration |
|---|---|
| Employee on sick leave ordered by medical facility | During the sick leave period |
| Employee on annual leave | During the leave period |
| Female employee who is pregnant, on maternity leave, or raising a child under 12 months | Entire pregnancy + maternity leave + until child is 12 months |
| Male employee on paternity leave per Social Insurance Law | During paternity leave period |
Employer is prohibited from disciplining (including dismissal) employees who are:
| Topic | 2012 Code | 2019 Code (effective 2021-01-01) |
|---|---|---|
| Employee resignation | Required specific grounds | May resign for any reason with proper notice (Art. 35) |
| Employer unilateral grounds | Narrower list | Added: false information by employee (Art. 36.1.g), employee absent ≥5 days (Art. 36.1.e) |
| Notice period (indefinite) | 45 days | 45 days (unchanged) |
| Disciplinary dismissal — sexual harassment | Not listed | Added as ground for dismissal (Art. 125.2) |
| Retirement age ground | Not explicit | Explicit ground for employer unilateral termination (Art. 36.1.đ) |
| Paternity leave protection | Not specified | Male employees on paternity leave now protected (Art. 37) |
| Contract types | 3 types | Reduced to 2 types: indefinite + fixed-term (max 36 months); eliminated seasonal contracts |
"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.
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.
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.
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.
🟠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.
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.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.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.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.| # | Source | Type | Trust | URL |
|---|---|---|---|---|
| 1 | ILO NATLEX — Labor Code 2019 official English translation | Official law text | 🟢 | https://natlex.ilo.org/dyn/natlex2/natlex2/files/download/110469/VNM110469%20Eng.pdf |
| 2 | VBPL official law database — Code 45/2019/QH14 | Official law text | 🟢 | https://vbpl.vn/TW/Pages/vbpqen-toanvan.aspx?ItemID=11135 |
| 3 | MOLISA official site — Vietnam Labour Code 2019 | Government portal | 🟢 | https://boluatlaodong2019.molisa.gov.vn/lang_en/topic/viet_nam_labour_code/index |
| 4 | ASL LAW — Severance allowance regulations | Vietnamese law firm | 🟡 | https://aslgate.com/regulations-on-severance-allowance-in-vietnam/ |
| 5 | ADK Lawyers — Severance and job-loss allowance | Vietnamese law firm | 🟡 | https://adk-lawyers.com/en/regulations-on-employees-severance-allowance-and-job-loss-allowance/ |
| 6 | ADK Lawyers — Lawful termination of labor contract | Vietnamese law firm | 🟡 | https://adk-lawyers.com/en/lawfully-termination-of-the-labour-contract-with-the-employee-in-viet-nam/ |
| 7 | Viet An Law — Employer unilateral termination | Vietnamese law firm | 🟡 | https://vietanlaw.com/the-employer-unilaterally-terminates-the-labor-contract-in-vietnam/ |
| 8 | LexConsult — Unlawful dismissal disputes | Vietnamese law firm | 🟡 | https://lexconsult.com.vn/en/unlawful-dismissal-disputes-legal-protection/ |
| 9 | PLF Law — Employee termination practices (restructuring) | Vietnamese law firm | 🟡 | https://plf.vn/employee-termination-practices-5-insights-on-restructuring-technology-and-economic-reasons/ |
| 10 | CMS Expert Guide — Dismissals: Vietnam | International law firm | 🟡 | https://cms.law/en/int/expert-guides/cms-expert-guide-to-dismissals/ |
| 11 | Mondaq — Cross-border workforce restructuring: Vietnam | International legal platform | 🟡 | https://www.mondaq.com/redundancylayoff/1414242/guide-to-restructuring-a-cross-border-workforce-2024-vietnam-chapter |
| 12 | Multiplier — Vietnam employment laws | EOR platform | 🟠 | https://www.usemultiplier.com/vietnam/employment-laws |
| 13 | Rivermate — Vietnam termination guide | EOR platform | 🟠 | https://rivermate.com/guides/vietnam/termination |
| 14 | G2B — Terminating employees in Vietnam | Consulting | 🟠 | https://g2b.co/news/terminating-employees-in-vietnam |
| Priority | Item | Action |
|---|---|---|
| 🟠P1 | Decree 145/2020 detailed procedural requirements for disciplinary meetings (exact notice format, union participation rules) | Read full Decree text |
| 🟠P2 | Retirement age transition schedule by year (2021-2035) under Decree 135/2020 | Verify current year's retirement ages |
| 🟠P3 | Whether job-loss allowance minimum of 2 months applies even if eligible service <12 months after UI deduction | Verify Art. 47 interaction with UI offset |
| 🟡P4 | Court statistics on illegal termination claims (reinstatement vs. compensation outcomes) | Vietnam court statistical yearbook |
| 🟡P5 | Treatment of probationary period employees under restructuring (Art. 42) — are they eligible for job-loss allowance? | Case law / MOLISA guidance |
| 🟡P6 | Interaction between collective bargaining agreements (CBA) and statutory severance — can CBA increase but not decrease? | Verify Art. 75 on CBA limitations |