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Company responsibilities in labor contract termination, in compliance with current regulations, are outlined in the following analysis provided by LawPlus for your reference.

1. Payment of Severance Allowance for Contract Termination:

According to the 2012 Labor Code, the employer is responsible for paying severance allowance when unilaterally terminating the employment contract. However, Article 46 of the 2019 Labor Code specifies two cases where the employer is not required to pay severance allowance:

  • When the employee is eligible for retirement.
  • When the employee voluntarily resigns for five consecutive days without a justifiable reason.

In such cases, the employer is only obligated to pay severance allowance to employees who have worked continuously for at least 12 months, with half a month’s salary granted for each year of service.

2. Company responsibilities regarding the settlement of payments related to employee rights:

To ensure the settlement of financial obligations between the employee and employer upon the termination of.the employment contract, the 2019 Labor Code extends the payment period for relevant amounts related to the rights of each party.

Under the new regulations, within 14 working days from the date of contract termination (increased from 7 days under the 2012 Labor Code),.both parties are responsible for fully settling all financial amounts related to the rights of each party, except in cases stipulated by law, and this period should not exceed 30 days.

  • When the employer is an individual terminating business activities.
  • When the employer undergoes structural changes, technological changes, or for economic reasons.
  • In cases of division, separation, merger, consolidation; sale, lease, conversion of business type;.transfer of ownership rights, use rights of the enterprise’s assets, or cooperation.
  • Due to natural disasters, fires, enemy attacks, or dangerous epidemics.

3. Other Responsibilities of the Employer When Terminating the Contract:

According to the provisions of Article 48(3) of the 2019 Labor Code, when unilaterally terminating.the employment contract with an employee, the employer also has the responsibility to:

  • Complete the procedures to confirm the period of social insurance, unemployment insurance,.and return them along with other relevant documents held by the employee (if any).
  • Provide copies of relevant documents related to the employee’s work history if requested by the employee. The cost of copying and sending documents is borne by the employer.

In addition, the employer must notify the employee in writing about the termination of the labor contract,.except in certain cases as specified by the Labor Code.

For any inquiries, you can contact Law Plus through the website, hotline 02862 779 399 / 0965 052 039 / 0966 008 030 (WhatsApp, Viber, Zalo), or email info@lawplus.vn.”

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