How to Legally Dismiss an Employee in Vietnam

In Vietnam, the grounds to legally dismiss an employee are specified under the Labor Code 2019. It’s crucial to align your reasons for dismissal with these legal grounds to avoid any potential disputes or legal challenges.

1. Serious Breach of Duties: If an employee commits a serious violation of company policies or engages in misconduct, such as theft or fraud, this can be a valid reason for dismissal. It is essential to document these breaches thoroughly and ensure that they are serious enough to warrant termination. The process should include a detailed investigation and documentation of the employee’s actions.

2. Incapacity: Employees who are unable to perform their job duties due to long-term illness or disability may be subject to dismissal if they are unable to fulfill their job requirements. The employer must provide medical evidence and follow proper procedures to ensure that all options, such as reasonable accommodations, have been exhausted.

3. Economic Necessity: Organizational restructuring, downsizing, or economic challenges may necessitate the dismissal of employees. This reason must be supported by clear evidence of the business’s financial difficulties or restructuring plans. It is essential to follow legal requirements regarding redundancy and provide appropriate notice and compensation.

4. Contract Expiry: Fixed-term contracts automatically end when their term expires. If the contract is not renewed, the dismissal is generally considered lawful. However, it is important to adhere to the notice period requirements as specified in the employment contract and the Labor Code.

To ensure a legal and smooth dismissal process, follow these detailed steps:

Start by reviewing the employment contract to confirm the grounds for dismissal and ensure that you comply with the terms agreed upon. This includes understanding the notice period, any clauses related to termination, and the employee’s rights.

Compile comprehensive documentation of the employee’s performance issues or misconduct. This should include performance reviews, disciplinary actions taken, and any relevant communications. Thorough documentation helps support your decision and provides evidence if challenged.

Adhere to the notice period requirements specified in the employment contract or the Labor Code. The notice period allows the employee time to prepare for their departure and ensures compliance with legal requirements.

Draft and deliver a formal Employment Termination Letter to the employee. This letter should clearly state the reasons for dismissal, the effective date, and any details regarding severance pay or compensation. Providing a written notice helps to formalize the process and avoid misunderstandings.

Explore Legal Guide to Terminating Probationary Employees for specific termination guidance.

An Employment Termination Letter is a vital document in the dismissal process. It serves as formal notification and outlines key details related to the termination. Here’s what should be included:

The Labor Code 2019 stipulates specific notice period requirements for different types of employment contracts:

1. Probationary Period: For employees in their probationary period, the notice period is typically 3 days. During this time, the employer or employee can terminate the contract with minimal notice.

2. Fixed-term Contract: For employees on fixed-term contracts, a notice period of 30 days is generally required before the contract expires. This notice allows the employee time to prepare for their departure and ensures compliance with contractual terms.

3. Indefinite Contract: Employees with indefinite contracts require a notice period of 45 days for dismissal. This extended period provides additional time for both the employee and employer to manage the transition and comply with legal obligations.

Severance pay is a critical component of the dismissal process, particularly in cases of redundancy or economic necessity. According to the Labor Code 2019, severance pay is calculated based on the employee’s length of service and average monthly salary.

Calculation: Severance pay is typically calculated as half a month’s salary for each year of service. Ensure that calculations are accurate and reflect the employee’s full service duration.

Payment: Ensure that severance pay, along with any other entitlements such as unused leave, is paid promptly. Providing a clear breakdown of the severance pay and any deductions helps maintain transparency and reduces the risk of disputes.

Once the dismissal is executed, complete the following steps to finalize the process:

Learn from Issuing Work Certificates: A Legal Guide to manage post-termination documentation.

Ensure that your dismissal process complies with all legal requirements to avoid potential disputes. Refer to the Vietnamese Labor Code 2019 for comprehensive regulations regarding employee dismissal. Consulting with legal experts or Themis Partner can provide additional guidance and ensure that all aspects of the dismissal process are handled correctly.