EMPLOYERS UNILATERALLY TERMINATE LABOR CONTRACTS ILLEGALLY AND THE LEGAL CONSEQUENCES

Recruiting and maintaining a skilled workforce is a key factor for the success of any business. However, in the process of operation, there are many cases where employers are forced to unilaterally terminate labor contracts with employees. This decision, although arising from the practical needs of the business, raises many complex legal issues, requiring strict compliance with current labor law regulations. Unilateral termination of labor contracts by employers without following proper procedures or without a solid legal basis can lead to serious legal consequences, significantly affecting the reputation and business operations of the business. Therefore, understanding and properly applying the provisions of the law on the employer’s right to unilaterally terminate the labor contract, as well as grasping the legal consequences that may occur when this behavior goes against the provisions of the law, becomes an urgent requirement for all businesses.

Unilateral termination of a labor contract (LC) is a case where the employer (NSDLĐ) or the employee (NLĐ) terminates the LC according to the grounds and procedures prescribed by law, leading to the termination of the legal validity of the LC before the term without depending on the will of the other party in the labor relationship. In essence, this is an act expressing the unilateral will of one party in the labor relationship not wanting to continue performing the LC, leading to the termination of the rights and obligations of both parties in the LC.

The 2019 Labor Code (LLC 2019) allows both employees and employers to unilaterally terminate the contract before the term, specifically stipulated in Articles 35, 36 and 37 of this Code. Cases of termination of the labor contract that are not in accordance with the provisions of the labor law are called illegal unilateral termination of the labor contract.

Unlike employees who are allowed to unilaterally terminate the labor contract without reason, only need to give prior notice for each specific type of contract, employers can only unilaterally terminate the labor contract in cases prescribed by law. Specifically, Article 36 of the 2019 Labor Code stipulates that employers have the right to unilaterally terminate the labor contract in the following cases:

– Employees regularly fail to complete the work according to the labor contract as determined by the criteria for assessing the level of work completion in the regulations of the employer. The regulations on assessing the level of work completion are issued by the employer but must consult the representative organization of employees at the facility where there is a representative organization of employees at the facility;

– Employees who are sick or have an accident and have been treated for 12 consecutive months for those working under an indefinite-term labor contract or have been treated for 06 consecutive months for those working under a fixed-term labor contract with a term of 12 months to 36 months or more than half of the term of the labor contract for those working under a fixed-term labor contract with a term of less than 12 months but their working capacity has not yet recovered. When the employee’s health recovers, the employer shall consider continuing to sign the labor contract with the employee;

– Due to natural disasters, fires, dangerous epidemics, hostilities or relocation, reduction of production and business at the request of competent state agencies, the employer has sought all remedial measures but is still forced to reduce the number of jobs;

– The employee is not present at the workplace after the time limit specified in Article 31 of the 2019 Labor Code;

– The employee is of retirement age as prescribed in Article 169 of the 2019 Labor Code, unless otherwise agreed;

– The employee voluntarily quits the job without a valid reason for 05 consecutive working days or more;

– The employee provides dishonest information when concluding the labor contract, affecting the recruitment of the employee.

In addition, the employer who wants to unilaterally terminate the labor contract must also comply with the requirements on notice period, payments, severance pay, and unemployment benefits for the employee in accordance with the provisions of law. According to Clause 2, Article 36 of the 2019 Labor Code, the employer must notify the employee in advance as follows:

– At least 45 days for an indefinite-term labor contract;

– At least 30 days for fixed-term labor contracts with a term of 12 to 36 months;

– At least 03 working days for fixed-term labor contracts with a term of less than 12 months and for the cases specified in Point b, Clause 1, Article 36;

– For some specific industries, occupations and jobs, the notice period is implemented according to Government regulations.

– When unilaterally terminating a labor contract as specified in Point d and Point e, Clause 1, Article 36, the employer does not have to give notice to the employee.

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