There are quite a number of complicated procedures involved in the termination of employment by the employer in Vietnam. Therefore, the following article will clarify the procedures that need to be followed to ensure that the termination of employment is not challenged in court, as well as the obligation of the employer to state the reason for the termination and what standards of proof must be met by the employer.
Firstly, in the case of stopping work for a reasonable period of time or suspending the labor contract, this is on the basis of an agreement between the two parties. Then the employer only needs to ensure that the day of stopping work or suspending the labor contract, he must accept the employee back, unless otherwise agreed by the two parties.
Secondly, in the case of unilateral termination of the contract because of the epidemic leading to the downsizing of business, the obligation of the employer in this case of unilateral termination is the obligation to prove that all measures have been taken but still forced to downsize production, reduce workload and the obligation to notify employees in advance of unilateral termination of the contract. Thus, the employer, when unilaterally terminating a contract with an employee, must perform these obligations. If not, this termination will be considered as illegal unilateral termination of the contract and must compensate for this behavior.
Thirdly, in the case of laying off an employee due to a change in company structure under Article 42 of the Vietnam Labor Code, before laying an employee, the employer needs to perform the following obligations:
- Must develop a plan to use labor according to Article 44 of the Vietnam Labor Code, in case of new works, priority must be given to employees for training.
- In the event that new work cannot be arranged for an employee, the employer must discuss with the representative organization of the labor collective at the establishment, and
- Notify 30 days in advance of the Provincial People’s Committee and to the employees.
Thus, when the employer fails to perform one of the above obligations, the employer cannot lay off his or her employees. If an employee is terminated without performing these obligations, a dispute may arise that may lead to the Court declaring that the employer has unlawfully terminated the employee and requires the employee to be reinstated and compensated for the loss. Thus, to avoid these disadvantages in this case, before laying off the employee, the employer should consider meeting the above conditions.
In terms of whether the employer is obligated to state the reason for the cut above, considering the case of unilateral termination of the contract under Article 36 of the Vietnam Labor Code, the law clearly states that the employer needs to prove that he has taken all necessary measures, but because of the epidemic, he is still forced to reduce business. Usually, to prove this, employers need to prove that they are facing financial difficulties as well as reduced revenue without measures to solve, so to save costs, they must narrow business which leads to reduced employment.
Considering the case of laying off due to a change in the company structure under Article 42 of the Vietnam Labor Code, the law does not require the employer to prove why the structure needs to be changed. However, in fact, in labor disputes that the court hears, the court still requires the business owner to prove this reason. But proving this reason is not too difficult, but the employer only needs to prove that the company is having financial difficulties, in fact, even the employer only needs to prove that the company is not working effectively, so cutting some parts of the company is a necessary way.