Issues for termination of labor contract of employees in the field of aviation in Vietnam, termination of labor contract in Vietnam, termination of labor contract in aviation in Vietnam

Issues for termination of labor contract of employees in the field of aviation in Vietnam

Currently, due to the extremely complicated epidemic situation, airlines in Vietnam may face many difficulties in terms of financial situation which leads to the termination of labour contract in aviation field.

Under this circumstance, high-qualified aviation persons, such as First Officers and Captains, have not received a salary on the contract but received the salary based on their actual working hour, but in fact, they can only work a very small number of flight hours. Therefore, to solve their difficult situation, they have unilaterally terminated the contract with the airlines that hired them. However, in the case of high-qualified aviation persons, it is how their unilateral termination of the contract is legal and in the case of illegal termination, it is what risks they have to bear. The following article will focus on this issue.

Normally, according to the Labor Code, employees can unilaterally terminate labor contracts with airlines according to Article 35 of the Labor Code. Accordingly, these employees only have to give 30 days notice in advance if working under a definite-term labor contract with a term from 12 months to 36 months and 45 days if working under an indefinite labor contract t to employers who are airlines. However, in order to ensure the stringency of aviation safety and security and the approved flight plan for the aim of having more time to recruit highly qualified aviation staffs in Vietnam, for some important positions, the labor law stipulate other provisions on the termination of labor contracts. Specifically, it is according to the Decree No. 145/2020/ND-CP, when high-qualified aviation persons such as aircrew; aircraft maintenance technicians and aviation repairmen specialists; and flight dispatchers unilaterally terminate his/her labor contract, the period of prior notification must be at least 120 days, for indefinite-term labor contracts or labor contracts with a term of at least 12 months.

Therefore, for the aviation employees who have the role mentioned above, they are obliged to notify the employer 120 days in advance to ensure the safety and aviation security at the airlines.

However, these employees should note that their 120-day advance notice of contract termination is a legal unilateral termination of the contract and they are not obligated to compensate the employer, but they may still face the risk of having to compensate for training costs if the parties have signed a training contract. Indeed, according to the Circular No. 21/2017/TT-BGTVT, aircraft operators and aircraft maintenance organizations are for stipulating costs and compensation for training expenses and accumulated flight hours expenses; the cost of breaking the commitment of working time after training when unilaterally terminating the labor contract ahead of time to serve as a basis for the signing of training contracts, labor contracts with highly qualified aviation staff. Besides, high-qualified aviation persons, upon termination of labor contracts before the expiry date, are responsible for fulfilling the obligations under the training contract, labor contract and related agreements. In addition, one of the provisions in the training contract that the labor law stipulates is the clause “Training costs and responsibility to reimburse training costs”.

Accordingly, if the training contract between the employee (a high-qualified aviation personnel) and the employer (Airlines) has had a clear article on the calculation of the cost of breaking the commitment of working time after training when unilaterally terminating the labor contract ahead of time, the employee can meet the risk to pay all training cost, even when they unilaterally terminate the labor contract legally. However, if there is not any specified regulations on responsibility for reimbursement of training costs or training contracts are not signed, even though airlines have spent the costs to train their high-quality staff, this employee will not be reimbursed for this cost.

On the other side, if the high-qualified aviation personnel do not carry out reasonably the above notifying obligation, this shall be an illegally unilateral contract termination. According to Vietnamese Law, Obligations of the employee when unilaterally terminating a labor contract illegally:

Therefore, regarding this regulation, for the violation of the notifying obligation, you must pay Bamboo Company a compensation equal to half of your monthly wage in accordance with the labor contract plus an amount equivalent to your wage stated in the contract for the days you terminate the contract without giving a prior notice.

At first, we need to determine what the wage in accordance with the labor contract is, because your salary shall vary and be not fixed due to the Covid-19 pandemic. Currently, due to the Covid-19 epidemic, the salaries of many high-qualified aviation persons are based on the actual flight hours not on the basic salary according to their labor contract with airlines. Thus, their actual salaries are very lower than basic salary on the contract.

However, in practice, many courts determine that the wage for compensation is the wage specified on the labor contract, which is the basic salary on the labor contract to calculate the compensation, even all other allowances are also calculated as a part of the wage for compensation. Thus, there is a risk for these persons that they might compensate airlines the amount of money based on the basic salary on the Labor contract not actual salary they receive.

However, in some cases, there are some courts accepting that if you prove that other pilot received the salary and the flight hours as the same with you and the court consider the epidemic can lengthen, the salary can be determined on monthly average of total actual salary you get.

Moreover, if the high-qualified aviation persons make an illegally unilateral contract termination, they must reimburse training costs to airlines, if these airlines pay these persons any training costs for any training courses, even although you have not signed training contract.

Doan Vu Hoai Nam, Associate of ASL LAW

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

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