Allowances Vietnamese employees receive upon termination of labor contracts in accordance with the law during the Covid-19 pandemic, Allowances Vietnamese employees receive upon termination of labor contracts, Allowances employees are entitled to receive when unilaterally terminate the labor contract with the employer, Allowances employees are entitled to receive, unilaterally terminate the labor contract with the employer

Allowances Vietnamese employees receive upon termination of labor contracts in accordance with the law during the Covid-19 pandemic

Due to the Covid-19 pandemic, many employers have had to lay off their employees in order to reduce the burden for their businesses. However, on the other hand, what will happen if the employees are the one who decides to quit due to the Covid-19 pandemic? In both circumstances, what are the allowances that Vietnamese employees will receive? 

With the Covid-19 pandemic keeps raging for months in Vietnam with no signs of relief, revenue decreases, prices for basic necessities increases, fear for life and health of the family and loved one takes place, business owners and employers are under stress constantly.

On the business owner’s side, although they know that the employees, as well as them, are in a tough position, they have no choice but to reduce the number of employees in order to get the business as a whole out of this crisis.

For business owners, they can consult with the article on How do employers lower employees’ wages without breaking the law during the Covid-19 pandemic in Vietnam?

Nonetheless, although rare, there are some instances where the employees are the ones to back down from work because they realize that the working environment is unsafe, high risk of infections from the Covid-19 pandemic. 

They want to quit but do not know how to do it properly and most importantly, legally.

Allowances employees are entitled to receive when unilaterally terminate the labor contract with the employer

The Labor Code of Vietnam was built on the principle of protecting the rightful rights of employees. Thus, the Labor Code 2019 gives priority to the protection of the employee rather than the employers.

Accordingly, in the situation of complicated epidemic developments, if the employee unilaterally terminates the labor contract because they feel unsafe with the high-risk working environment, they may unilaterally terminate the labor contract with the employer.

The unilateral termination of the labor contract of an employee must comply with the obligation to give advance notice specified in Article 35 of the Labor Code 2019.

Employees, after legally terminating their labor contracts, are entitled to the following allowances:

+) Severance allowance: According to Clause 1, Article 46 of the Labor Code 2019, when unilaterally terminating a labor contract, an employee is entitled to a severance allowance if he/she has worked on a regular basis for a period of at least 12 months.

+) Job loss-allowance: Applicable to employees who have worked for 12 months or more and have their labor contracts terminated in case the enterprise changes its organization or reorganizes its labor for economic reasons; division, separation, and merger of enterprises; sale, lease, change the type of enterprise; transfer ownership or right to use assets of enterprises or cooperatives. The job-loss allowance is calculated based on the total working time of the employee, i.e. for every 1 working year, he/she is entitled to 1 month’s salary allowance for every 1 year of working, but the lowest level is equal to 2 months’ salary (based on the average salary of the last 6 months before the termination of the labor contract).

+) Unemployment benefit: According to Article 49 of the 2013 Employment Law, employees who are paying unemployment insurance premiums are entitled to unemployment benefits in case of unilateral termination of labor contracts when fully meeting the following conditions:

  • The employee unilaterally terminates the labor contract in accordance with the law;
  • Have paid unemployment insurance for a full 12 months or more within 24 months before becoming unemployed;
  • Have applied for unemployment benefits at the employment service center;
  • Haven’t found a job after 15 days from the date of submitting the application for unemployment insurance except for the circumstances listed in point 4, article 49, Employment Law 2013.

ASL LAW is the top-tier Vietnam law firm for Employment and Labor Law. If you need any advice, please contact us for further information or collaboration.

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