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1. Vietnam’s Premier Boutique Litigation Firm
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Ward 10, Phu Nhuan District, Ho Chi Minh City, Vietnam
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CASES OF TERMINATION OF LABOR CONTRACTS
Under the 2012 Labor Code and its current guiding legal documents
Updated in March, 2017

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Alternatives
THE EMPLOYER TERMINATES THE LABOR CONTRACT
Cases in which the employer shall not unilaterally terminate the
labor contract (Article 39)
• The employee is sick or has a work accident or occupational
disease and is being treated or nursed under the decision of a
competent health establishment, except the case in GROUND 2 of
Appendix III.
• The employee is on annual leave, personal leave or any other types
of leave permitted by the employer.
• The employer may neither dismiss a female employee nor
unilaterally terminate the labor contract with a female employee
for the reason of her marriage, pregnancy, maternity leave, or that
she is rearing a child under 12 months of age.
• The employee is on maternity leave in accordance with the Law on
Social Insurance.
Terminating the
labor contract
based on grounds
under Article 38
(See Appendix III)
Terminating the
labor contract
based on grounds
under Article 44,
Article 45
(See Appendix II)
Terminating the
labor contract by
dismissing the
employee
(See Appendix I)
• Confirming and returning the insurance book and other
documents to the employee; and
• Paying the employee wage that has not been paid yet, unused
days-off and other overdue payments.
Paying severance
allowance (if any)
(Article 48)
Paying job-loss
allowance (if any)
(Article 49)
The employee
resigns
Approving the
resignation
letter
Issuing the
decision on
termination of
labor contract
Both parties agree
on termination of
labor contract
Signing agreement of
termination of labor
contract
&
Revoking the
decision on unilateral
termination of labor
contract in case such
decision has already
been issued.

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APPENDIX 1: DISMISSING EMPLOYEE
UNDER THE GROUNDS OF ARTICLE 126
The employee commits an act of theft,
embezzlement, gambling, intentional
infliction of injury, use of drugs inside the
workplace, disclosure of technological or
business secrets or infringement of
intellectual property rights of the
employer, or acts which cause serious
damage or threaten to cause serious
damage to the assets or interests of the
employer.
The employee who has been subject to the
disciplinary measure of prolonging the wage
rise period commits recidivism when the
disciplinary record has not yet been written off
or the employee who has been subject to the
disciplinary measure of removal from office
commits recidivism.
Note: Recidivism means that an employee re-
commits the same violation for which he/she
has been disciplined while his/her disciplinary
record has not yet been written off.
The employee has been absent from work
without permission for a total of (i) 05
working days within 30 days or (ii) 20 days
within 365 days commencing from the first
day of absence without plausible reasons.
Note: Plausible reasons include natural
disaster, fire, and illness of the employee or
his/her next of kin with certification by a
competent health establishment and other
events defined in the internal labor
regulations.
CONDITIONS TO DISMISSAL
THE STATUTE OF LIMITATIONS STILL
DOES NOT EXPIRE (ARTICLE 124)
THE EMPLOYEE IS NOT IN NON –
DISCIPLINE TIME PERIOD
(ARTICLE 123.4)
The statute of limitations for handling a
violation of labor discipline is:
• 06 months from the date the violation is
committed for normal violations; or
• 12 months from the date the violation is
committed for violations directly related to
finance, assets or disclosure of
technological or business secrets.
Note:
• Upon expiry of the period specified at
CONDITION 2 herein, if the statute of
limitations has expired, it may be extended
but for no more than 60 days from the
expiry date of the period specified at
CONDITION 2.
• Decisions on handling violations of labor
discipline must be issued within the time
limits specified above.
Labor discipline may not be imposed for
violations in the following cases:
a. The employee is taking sickness or
convalescence leave or a leave with
the employer’s consent;
b. The employee is currently kept in
custody or temporary detention;
c. Waiting for results of verification and
conclusion of a competent agency for
acts of violation specified in GROUND
1 herein; and
d. The female employee is pregnant or
on maternity leave, or the employee
who is a biological or legally adoptive
father/mother rearing a child under
12 months of age.
VIOLATION HAS TO BE DEFINED IN
THE INTERNAL LABOR REGULATIONS
(ARTICLE 128.3)
GROUND 1 GROUND 2 GROUND 3
CONDITION 2 CONDITION 1 CONDITION 3

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PROCEDURE FOR DISMISSAL
Minutes should be signed by the employee and/or other witnessing
parties such as security, employees working in the same division, etc.
TEMPORARY SUSPENSION (ARTICLE 129)
(OPTIONAL)
REQUESTING THE EMPLOYEE WRITE AN EXPLANATION
ISSUING THE DECISION
• The employer may suspend the employee from working if the
employer considers that the case of violation is complex and any
continued performance of the work by the employee can cause
difficulties to the verification of his/her violation. Work
suspension may only be applied after the grassroots-level
representative organization of the employees’ collective has been
consulted.
• The period of work suspension must not exceed 15 days, or 90
days in special cases. During the period of work suspension, the
employee is entitled to 50% of the wage he/she receives prior to
the work suspension.
• Upon the expiry of the period of work suspension, the employer
must receive the employee back to his/her work.
The employee is not
required to reimburse
the wage advanced to
him/her
The employer shall pay
the full wage for the
period of work
suspension
• It is prohibited to impose more than one
form of discipline for a single violation of
labor discipline.
• For an employee who simultaneously
commits more than one violation of labor
discipline, it is only allowed to apply the
highest form of discipline corresponding
to the most serious violation.
• No labor discipline will be imposed on an
employee who violates the internal labor
regulations while suffering a mental
disorder or another disease which
deprives him/her of the capacity to
perceive or control his/her acts.
The attendant(s) does not
come to the Disciplinary
Meeting
All attendants come to the Disciplinary Meeting
Sending another
invitation(s)
The attendant(s) is still
absent after 03 times of
invitation
Immediately sending copies of the decision to all the
attendants.
MAKING MINUTES OF THE VIOLATION
IN CASE OF
DISMISSAL
IN CASE OF NON-
DISMISSAL
THINGS NEED TO BE CONSIDERED
WHEN MAKING DECISION
• Attendants include:
a. The employer or person who is authorized by employer being presiding
person;
b. The representative of the grassroots-level representative organization of the
employees’ collective;
c. The concerned employee;
d. Parents or legal representative of the concerned employee if he/she is under
18 years old;
e. Eyewitness (if any);
f. Defense counsel for the concerned employee (if any); and
g. Other people decided by the employer (if any).
• The handling of the violation of labor discipline must be recorded in the
minutes.
SENDING A WRITTEN INVITATION TO ALL ATTENDANTS AT LEAST 05 WORKING
DAYS PRIOR TO THE DISCIPLINARY MEETING
HOLDING A DISCIPLINARY MEETING

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Affecting 01
employee
Affecting 02 or
more employees
APPENDIX II: TERMINATING LABOR CONTRACT UNDER THE
GROUNDS OF ARTICLE 44 & ARTICLE 45
CHANGING STRUCTURE, TECHNOLOGY ECONOMIC REASONS
MERGE, CONSOLIDATION, SPLIT,
SEPARATION, TRANSFERRING
ASSET OWNERSHIP OR USE RIGHTS
OF ENTERPRISE
The following cases shall be considered as
restructuring or technological change:
• Changing organizational structure,
reorganizing personnel;
• Changing products or product structures;
or
• Changing process, technology,
machinery, equipment for production
and business in connection with
production, business lines of the
employer.
(FOR GROUND 1 & GROUND 2)
• DICUSSING WITH THE GRASSROOTS-LEVEL REPRESENTATIVE
ORGANIZATION OF THE EMPLOYEES’ COLLECTIVE; AND
• NOTIFYING THE PROVINCIAL-LEVEL LABOR AUTHORITY.
ELABORATING AND IMPLEMENTING A LABOR UTILIZATION PLAN
(ARTICLE 46)
• A labor utilization plan must have the following principal contents:
a. The lists and numbers of employees to be further employed and employees to
be re-trained for continued employment;
b. The list and number of employees to be retired;
c. The lists and numbers of employees to be assigned part-time jobs and those
to terminate their labor contracts; and
d. Measures and financial sources for implementing the plan.
• The labor utilization plan must be elaborated with the participation of the
grassroots-level representative organization of the employees’ collective.
MERGE,
CONSOLIDATION, SPLIT,
SEPARATION
TRANSFERRING ASSET
OWNERSHIP OR USE
RIGHTS
The succeeding employer shall
elaborate and implement a
labor utilization plan.
The preceding employer shall
elaborate a labor utilization
plan.
ISSUING THE DECISION ON TERMINATION OF LABOR CONTRACT
GROUND 1 GROUND 2 GROUND 3
After 30 days
The following cases shall be
considered as economic reasons:
• Economic crisis or recession; or
• Implementation of the State
policies regarding economic
restructure or international
commitments.

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The employee
agrees The employee
disagrees
After the advance notice
duration expires
The employee often fails to
perform his/her job stated in the
labor contract.
• Failing to perform his/her
assigned works or tasks;
• Criteria to evaluate the level
of assigned work/tasks
performance have to be
specified in the internal
regulations and labor norms
of the employer. Such
regulations and labor norms
shall only be issued after
obtaining written opinion of
the grassroots-level
representative organization
of the employees’ collective;
• Proving that employee fails
to fulfill his/her job because
of “subjective reasons”;
• The employee was noticed
by written warnings (letters)
or minutes at least twice a
month; and the employee
still fails to redress his/her
shortcomings.
The employee is sick or
has a labor accident from
which the employee’s
labor capacity has not
recovered after having
received treatment for:
• 12 consecutive
months for the
indefinite-term labor
contract;
• 06 consecutive
months for the
definite-term labor
contract; or
• More than half the
term of the contract
for the labor contract
for seasonal job or
specific job of under
12 months.
Other force majeure events are:
• Enemy sabotage, epidemic; or
• Relocation, scaling down
business, production location(s)
at the request of the competent
State agencies.
Cases of suspension of a labor
contract:
• The employee is called up for
military service;
• The employee is held in
custody or detention
according to the criminal
procedure law;
• The employee is subject to a
decision on application of the
measure of consignment to a
reformatory, compulsory
drug detoxification center or
compulsory education
institution;
• The female employee is
pregnant and has a
certificate of a competent
health establishment which
states that she cannot
continue to work; and
• Other cases as agreed upon
by the two parties.
If, as a result of natural disaster, fire
or other force majeure event as
prescribed by law, the employer,
though having applied every remedial
measure, has to scale down
production and cut jobs.
The employee is still absent from
the workplace after 15 days from
the date on which the period of
suspension of the labor contract
expired.
APPENDIX III: TERMINATING LABOR CONTRACT
UNDER THE GROUNDS OF ARTICLE 38
GROUND 1 GROUND 2 GROUND 3 GROUND 4
GIVING THE EMPLOYEE A WRITTEN ADVANCE NOTICE
ISSUING THE DECISION ON TERMINATION OF LABOR
CONTRACT
The advance notice duration shall be at least:
• 45 days for indefinite-term labor contract;
• 30 days for definite-term labor contract; or
• 03 working days for (i) GROUND 2; or (ii) seasonal labor contract; or
(iii) specific-work labor contract of under 12 months. The employer still
wishes to terminate
the labor contract
The employer does not want to
terminate the labor contract
Issuing a decision on canceling
the previous decision and
sending a written notice to the
employee
THE LABOR CONTRACT
STILL REMAINS
OBTAINING WRITTEN OPINION OF THE GRASSROOTS-LEVEL REPRESENTATIVE
ORGANIZATION OF THE EMPLOYEES’ COLLECTIVE