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This article outlines the legal challenges that employers in Vietnam may face when dismissing employees, terminating labor contracts, or dealing with labor disputes — and how to handle them in compliance with Vietnamese law.
Businesses should consider contact law firms specializing in advising labour law in Vietnam to receive detailed assistance on a case-by-case basis.
Dismissal: A Strictly Regulated Process
Under employment law in Vietnam, dismissal (sa thải) is among the most serious forms of labor discipline. It is only lawful in a few specific cases, such as theft, embezzlement, repeated violations after prior discipline, or absence without justification for five cumulative days within 30 days.
Before dismissing an employee, the employer must:
- Establish clear internal labor regulations registered with the labor authority.
- Conduct a lawful disciplinary process with the participation of the grassroots-level labor representative.
- Issue proper notice and ensure that procedural requirements are met.
Failure to comply may render the dismissal invalid and expose the employer to reinstatement orders, compensation obligations, and reputational harm.
Contract Termination: Grounds and Obligations
Vietnamese law permits both employers and employees to unilaterally terminate labor contracts under certain circumstances. For employers, legal grounds include:
- The employee frequently fails to perform their job as agreed in the contract.
- The business undergoes structural changes or technology transformation.
- The employee reaches retirement age.
- Mutual agreement on termination.
In any case, employers must provide advance notice (typically 30 or 45 days depending on contract type) and ensure payment of all lawful entitlements, including:
- Final salary
- Unused annual leave
- Severance or redundancy allowances, if applicable
- Social insurance procedures
Labor Disputes: Common Triggers and Resolution
Disputes typically arise from unclear labor contracts, unlawful terminations, wage arrears, or workplace discipline. Employment law in Vietnam classifies labor disputes into individual and collective disputes, each with different resolution mechanisms.
Employers should consider:
- Using internal grievance mechanisms before escalation
- Participating in mediation through labor conciliators
- Preparing for potential litigation or arbitration if resolution fails
Proactive dispute prevention includes clear documentation, compliance with internal policies, and regular legal review of employment practices.
Legal Foresight Equals Project Success
Navigating dismissal, contract termination, and labor disputes requires more than just HR instinct — it demands legal precision. Employers in Vietnam must stay alert to legal formalities to reduce liabilities and preserve workplace stability. When in doubt, legal counsel should be sought to avoid costly errors and regulatory exposure.
ASL Law is a leading full-service and independent Vietnamese law firm made up of experienced and talented lawyers. ASL Law is ranked as the top tier Law Firm in Vietnam by Legal500, Asia Law, WTR, and Asia Business Law Journal. Based in both Hanoi and Ho Chi Minh City in Vietnam, the firm’s main purpose is to provide the most practical, efficient and lawful advice to its domestic and international clients. If we can be of assistance, please email to [email protected].
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.
