Vietnam Severance Pay Policy Guide

Severance pay is a crucial aspect of Vietnamese labor law, protecting employees’ rights upon termination of employment. Understanding this policy ensures employees receive their due benefits and helps businesses comply with regulations, fostering harmonious labor relations.

When is Severance Pay Applicable?

Under current regulations, employees are entitled to severance pay in the following circumstances:

• Unlawful unilateral termination of the labor contract by the employer.
• Expiration of a fixed-term labor contract without renewal by the employee.
• Bankruptcy, dissolution, or cessation of business operations.
• Unilateral termination of the labor contract by the employee due to unpaid wages, social insurance contributions, etc.

How is Severance Pay Calculated?

Severance pay is calculated based on the average salary of the six consecutive months preceding termination and the number of years worked at the company. Specifically:

• Each year of service equates to one month’s average salary.
• For less than 12 months of service, the payment is prorated.
• For seasonal or irregular work, severance pay is half the number of months of average salary.

Example: Mr. A worked at company X for 5 years with an average salary of 10 million VND/month over the last 6 months. Upon resignation, he will receive: 10 million VND/month x 5 months = 50 million VND.

Severance Pay Application Process

To receive severance pay, employees must follow these steps:

1. Submit a severance pay request to the employer.
2. Provide relevant documents such as the labor contract, termination decision, social insurance book, etc.

Note:

• The application deadline is 30 days from the termination date.
• Employers must pay severance within 7 days of receiving a complete application.

Severance Pay: Fostering Harmonious Labor Relations

Understanding and applying severance pay policies correctly not only protects employee rights but also builds a professional, transparent company image, attracting talent. Compliance with labor laws also helps businesses avoid legal risks.

Severance Pay FAQs

1. Am I entitled to severance pay if dismissed for disciplinary violations?

Answer: This depends on the severity of the violation and the company’s internal regulations.

2. Can I negotiate a higher severance package than the legal minimum?

Answer: Absolutely. Employees and employers can negotiate severance pay, as long as it’s not below the legal minimum.

3. Can the employer deduct from severance pay to compensate for damages caused by the employee?

Answer: Deductions are only permissible for material damages caused by the employee and explicitly stated in the labor contract or collective bargaining agreement.

4. Who can I contact for detailed severance pay advice?

Answer: Contact the Department of Labor, Invalids and Social Affairs (DOLISA) where the company is located or reputable legal consulting firms.

Severance pay consultation in Vietnam

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