Terminating a labor contract in accordance with legal provisions brings many benefits to both the employee and the employer. Therefore, when considering dismissing an employee, the company should pay attention to what issues? How does the proper termination of a labor contract proceed according to the law? LawPlus will share detailed information on these matters in the article below.
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1. Proper Termination of a Labor Contract According to Current Regulations
There are several ways for the employer or employee to terminate a labor contract under the provisions of the 2019 Labor Code:
- Termination of the labor contract in cases such as expiration, completion of the work, conviction, expulsion, incapacity, disappearance, or death.
- Termination by mutual agreement between the parties.
- Unilateral termination of the labor contract by one party, but compliance with the notice period for the other party.
- Termination of the labor contract due to changes in structure, technology, economic reasons, or due to the division, separation, merger, or consolidation of the enterprise.
- Termination of the labor contract during the probationary period.
2. Cases where the employer is not allowed to unilaterally terminate the labor contract
According to Article 37 of the 2019 Labor Code, the employer is not allowed.to dismiss an employee in the following cases:
- The employee is sick or injured, suffering from an occupational disease and is undergoing treatment,.rehabilitation as prescribed by the authorized medical examination and treatment facility, except for cases where the employee’s.sickness or injury has been treated beyond the legal time limit and the employee’s ability to work has not recovered.
- The employee is on annual leave, personal leave, and other agreed-upon leave.
- Female employees who are pregnant, employees on maternity leave, or nursing a child under 12 months old.
3. Obligations that the employer must fulfill when unilaterally terminating the labor contract unlawfully
- Must take the employee back to work under the previously signed labor contract; must pay wages, social insurance,.health insurance, unemployment insurance for the days the employee does not work and must pay an.additional amount to the employee of at least 02 months’ salary as per the labor contract.
After being reinstated, the employee must repay the employer the severance pay,.job loss allowance if already received from the employer.
In the case of no longer having the position, job stipulated in the labor contract, and the.employee still wants to work, the two parties agree to amend, supplement the labor contract.
In case of violating the notice period as stipulated, it is necessary to pay an amount.corresponding to the salary according to the labor contract for the days not notified.
- In case the employee does not want to continue working, in addition to the amount payable mentioned above,.the employer must pay severance pay to terminate the labor contract.
- In case the employer does not want to rehire the employee, and the employee agrees, in addition to the amounts payable.mentioned above, the employer and the employee agree on additional compensation for the employee,.but at least equal to 02 months’ salary according to the labor contract to terminate the labor contract.
4. Benefits of Properly Terminating a Labor Contract
The employer will not be liable for damages, lawsuits, or administrative penalties when terminating.the labor contract in accordance with the law with the employee. In addition, the employer will maintain credibility and good relations with employees.
Properly terminating a labor contract also contributes to the development of the labor market, providing opportunities.for employees and employers to find suitable jobs and labor according to their needs. This is an important factor in improving productivity and the quality of labor,.contributing to the socio-economic development of the country.
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