The right to unilaterally terminate an employment contract is a significant provision in the Labor Code 2019, which aims to protect the interests of both employees and employers in Vietnam. The Labor Code sets forth detailed regulations to ensure a balance between the rights and obligations of the parties involved in the employment relationship. This article will analyze the provisions related to unilateral termination of employment contracts in Vietnam, including the conditions and legal consequences involved.

1. Definition and Right to Unilaterally Terminate an Employment Contract

According to Article 34 of the Labor Code 2019, an employment contract can be terminated in various ways, including the right of both employees and employers to unilaterally terminate the contract. The right to unilaterally terminate an employment contract is understood as the right of one party, either the employee or the employer, to terminate the employment contract without the consent of the other party. However, to ensure fairness and reasonableness, the Labor Code 2019 specifies the conditions that each party must adhere to when exercising this right.

2. Employee’s Right to Unilaterally Terminate an Employment Contract

Employees have the right to unilaterally terminate their employment contract without prior notice in the following cases:

• Non-Compliance with Job Specifications: If the employee is not assigned to the agreed job, work location, or does not have working conditions as stipulated in the contract, they can terminate the contract without notice.
• Failure to Pay Salary or Delayed Salary Payments: If the employee does not receive full salary or if salary payments are delayed beyond the agreed date, the employee has the right to terminate the contract without prior notice.
• Abuse or Harassment: If the employee is subjected to abuse, physical violence, insult, or any actions affecting their health, dignity, or reputation, or is forced into labor, they may terminate the contract immediately without notice.
• Sexual Harassment at Work: In cases of sexual harassment at the workplace, the employee also has the right to terminate the contract immediately.
• Pregnant Employees Needing Leave: Pregnant employees can terminate their contract if they need to take leave as per legal provisions.
• Reaching Retirement Age: When the employee reaches the retirement age as specified by law, they may terminate the contract without prior notice.
• Providing False Information: If the employer provides false information affecting the performance of the contract, the employee may terminate the contract without notice.

The Labor Code 2019 details the employee’s right to unilaterally terminate the employment contract in Article 35. Employees can terminate the contract without providing a reason but must notify the employer within a specific time frame depending on the type of contract and the length of employment. Specifically, for indefinite-term contracts, employees must give at least 45 days’ notice. For fixed-term contracts of 12 to 36 months, the notice period is at least 30 days. For fixed-term contracts of less than 12 months, employees must provide at least 3 working days’ notice. Failure to comply with the notice period may require the employee to compensate the employer.

Additionally, employees may unilaterally terminate the contract without notice in special cases, such as non-compliance with job or location agreements, unpaid or delayed salary, sexual harassment at work, or other severe circumstances affecting health or safety.

3. Employer’s Right to Unilaterally Terminate an Employment Contract

Employers have the right to unilaterally terminate an employment contract in the following circumstances:

• Absenteeism Without Reason: If an employee is absent from work after the contract suspension period or agreed time frame, the employer may terminate the contract without prior notice.
• Unauthorized Absences: If an employee abandons work without a valid reason for 5 or more consecutive working days, the employer has the right to terminate the contract immediately.
• Frequent Failure to Complete Work: If an employee regularly fails to complete work as per the contract, as determined by the employer’s work performance criteria, the employer may terminate the contract with prior notice. The work performance criteria must be established and consulted with the employee representative organization if applicable.
• Long-Term Illness or Accident: If an employee suffers from illness or an accident and has been undergoing treatment for 12 months or more for an indefinite-term contract, or for 6 months or more for fixed-term contracts of 12 to 36 months, or exceeds half the contract term for contracts under 12 months, and the employee’s ability to work has not yet recovered, the employer may terminate the contract but must provide notice.
• Natural Disasters, Fires, Epidemics: In cases of natural disasters, fires, dangerous epidemics, or other force majeure events that require business relocation or downsizing as mandated by authorities, and if all possible measures have been taken but the business still needs to reduce the workforce, the employer may terminate the contract with prior notice.
• Employee Reaching Retirement Age: When the employee reaches retirement age, the employer may terminate the contract, but must comply with notice requirements.
• False Information by the Employee: If an employee provides false information during the contract negotiation affecting recruitment, the employer may terminate the contract with prior notice.

Article 36 of the Labor Code 2019 stipulates that employers also have the right to unilaterally terminate an employment contract under specific conditions outlined in the law. Employers may terminate the contract if the employee frequently fails to perform their duties, suffers from long-term illness or accidents beyond the stipulated period, or due to other force majeure events that prevent the business from continuing operations. Similar to employees, employers must provide prior notice based on the type and duration of the employment contract. Specifically, the notice period is 45 days for indefinite-term contracts, 30 days for fixed-term contracts of 12 to 36 months, and 3 working days for contracts of less than 12 months.

4. Notice Period for Terminating an Employment Contract in Vietnam

Under the Labor Code 2019, parties must adhere to the notice period for terminating an employment contract as follows:

• For indefinite-term contracts: The terminating party must provide at least 45 days’ notice.
• For fixed-term contracts of 12 to 36 months: The terminating party must provide at least 30 days’ notice.
• For fixed-term contracts of less than 12 months: The terminating party must provide at least 3 working days’ notice.

Adhering to these notice periods is essential to ensure legal rights and avoid disputes arising from the termination of the employment contract.

5. Conditions for Exercising the Right to Unilaterally Terminate an Employment Contract

Exercising the right to unilaterally terminate an employment contract must comply with the conditions specified in the Labor Code 2019. For employees, in addition to providing notice as required, they must ensure that the reasons for termination do not violate any legal prohibitions. For employers, the right to terminate the contract is only valid under specific and reasonable grounds, ensuring that employee rights are not infringed upon. Failure to comply with legal provisions may result in legal consequences for the terminating party. Employees may lose unemployment benefits or be required to compensate the employer, while employers may face fines, be required to compensate employees, and face administrative penalties for violations related to contract termination.

6. Consequences of Unlawful Termination of an Employment Contract by Employees

If an employee unilaterally terminates their employment contract unlawfully, they may face several consequences:

• The employee will not receive severance pay.
• The employee must compensate the employer with an amount equivalent to half a month’s salary as per the contract and an additional sum equivalent to the salary for the days not provided notice.
• The employee must also reimburse the employer for any training costs.

7. Legal Consequences of Unlawful Termination of an Employment Contract

If unilateral termination of an employment contract is not executed in accordance with legal provisions, the violating party will face specific legal consequences. Employees who terminate contracts unlawfully may be required to compensate the employer for the salary of the days without notice or reimburse training costs (if applicable) as stipulated in the contract. Conversely, if an employer unlawfully terminates an employment contract, they must reinstate the employee according to the original contract, pay the full salary, insurance, and other benefits for the period the employee was not working. If the employee does not wish to return to work, the employer must provide additional compensation equivalent to at least two months’ salary as per the contract.

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