What is Unilateral Termination of Employment Contract Contrary to Legal Regulations?

During the course of employment, there will be occasions when either the business entity or the employee no longer wishes to continue the Employment Contract (EC) and seeks to exercise the unilateral termination rights. However, in many cases, businesses or employees may not correctly exercise their respective rights, leading to unilateral termination of the employment contract contrary to legal regulations.

Unilateral termination of an employment contract contrary to legal regulations refers to cases where the employee or the business entity terminates the employment contract not in accordance with legal provisions.

Relevant Legal Documents:

1. Labour Code 2019;
2. Decree No. 145/2020/NĐ-CP guiding the Labour Code on labour conditions and labour relations.

Cases in which unilateral termination may occur:

1. For Employees: The only unlawful act that employees may commit when unilaterally terminating an employment contract is providing notice incorrectly. This often happens with ordinary labourers who may not have a high level of legal knowledge and seriousness in adhering to the signed employment contracts. When unilaterally terminating the contract unlawfully, employees are required to compensate the employer according to regulations.
   They will not be entitled to unemployment insurance benefits from the Social Insurance Agency:
   No severance pays (as the employer has to cover this).
   Compensation for half a month’s salary according to the employment contract and an amount equivalent to the salary under the employment contract for the days without prior notice.
   Reimbursement for the training costs (if any).
   
2. For Businesses:

Unlawful unilateral termination by businesses is more common and may include violations such as:

• Violating the notice period: demanding employees to leave immediately, e.g., after 1, 2, 3 days from the notification.
• Lack of an evaluation policy (properly established) but still evaluating employees as frequently not completing their tasks.
• Incorrectly assessing the reason for an employee’s absence from the workplace (whether it is a justifiable reason or not).

Unilaterally terminating the employment contract of a pregnant employee, on maternity leave, or breastfeeding; especially for male employees (a new provision compared to previous regulations).

When unlawfully unilaterally terminating the employment contract, businesses must reinstate the employee, and they are required to compensate the employee according to regulations (payment of salary, social insurance, health insurance, and unemployment insurance for the days the employee does not work, and an additional amount equal to at least two months’ salary under the employment contract). If there is a violation of the notice period, the business must pay an additional amount equivalent to the salary under the employment contract for the days without prior notice.

If the employee does not wish to return to work, the parties can negotiate a solution, but in most cases, the business will have to provide additional compensation of at least two months’ salary under the employment contract.

Due to the risks mentioned above, both businesses and employees should carefully consider before making decisions on unilateral termination. If possible, the two parties should engage in dialogue to find a solution that is suitable for the rights and interests of both. This helps avoid disputes and the need for resolution in court.

If there are any issues or concerns about these regulations, please do not hesitate to contact An Luật Việt Nam for advice and assistance. Our experienced lawyers are ready to support businesses and employees in finding appropriate solutions to resolve their labour relations.

In necessary cases, An Luật Việt Nam is ready to accompany clients in labour dispute lawsuits, protecting the legal rights and interests of clients before the court.