The unilateral termination right of the employer in a labour contract
During the course of employment, there may be instances when the employer no longer wishes to continue the Employment Contract (EC) with the Employee. In such situations, the business may consider exercising the unilateral termination right as per the labour law regulations.
The unilateral termination right of the Employer (Business) is a situation where the business is allowed to independently make a decision to terminate the effectiveness of the signed Employment Contract (EC).
Relevant Legal Documents:
- Employees consistently fail to complete tasks according to the Employment Contract (EC). In order to unilaterally terminate the EC in this situation, the business must establish an evaluation regime for the level of task completion. This regime must be developed with the consultation of the grassroots labour union before issuance. The regime should include criteria that can be used to assess the employee’s performance. It’s important to note that documents related to employee evaluation must also be provided in the labour regulations dossier.
- Employee Sickness or Injury, Treated Continuously for 12 Months. For employees working under an indefinite-term Employment Contract (EC) or under an EC with a duration ranging from 12 to 36 months, if the employee has been under continuous medical treatment for sickness or injury for 12 months, or for those with a fixed-term EC, if the treatment period is 6 months and occurs within the first half of the EC’s duration, and the employee’s work capacity has not yet recovered, the employer is entitled to unilaterally terminate the EC.
- Due to Natural Disasters, Fire, Dangerous Epidemics, Adversities, or Relocation, Contraction of Production, Business Operations as Required by Competent State Authorities, despite the employer’s efforts to implement all possible remedies.
- After 15 days from the expiration of the temporary suspension of the Employment Contract (EC), the Employee is not present at the workplace.
- The Employee is eligible for retirement according to regulations (without the requirement of a sufficient contribution period to the Social Insurance Fund for retirement benefits as in the old law).
- The Employee voluntarily resigns without justifiable reason for five consecutive working days or more; justifiable reasons include natural disasters, fires, the employee’s own health issues, or illnesses of family members confirmed by an authorised medical facility, and other cases as specified in the internal labour regulations:
- The Employee provides dishonest information during the conclusion of the employment contract, affecting the recruitment process.
However, it is crucial to note that even if the conditions for applying the aforementioned cases are met, the enterprise cannot unilaterally terminate the employment contract in the following situations:
- If the employee is sick or injured, suffering from an occupational disease and is undergoing treatment or rehabilitation as prescribed by the medical facility (except for case 2).
- If the employee is on annual leave, personal leave, or other types of approved leave by the enterprise.
- If the employee is pregnant.
- If the employee (regardless of gender) is on maternity leave or is raising a child under 12 months old.
If the enterprise fails to carefully consider these exclusions or unilaterally terminates the employment contract without meeting the necessary conditions in each case, it implies that the unilateral termination by the enterprise is wrongful. In such instances, the enterprise will be held responsible for compensating the employee.
Additionally, when terminating the contracts of multiple employees, the enterprise may consider restructuring its operations.
If there are any concerns or questions regarding these regulations, please do not hesitate to contact An Luật Việt Nam for consultation and assistance. Our company, with experienced lawyers, is ready to support enterprises in establishing appropriate regulations for evaluating employees, as well as examining the conditions and arising practical situations to ensure that the unilateral termination of employment contracts by the enterprise complies with regulations and does not adversely affect business operations.
In necessary cases, An Luật Việt Nam is prepared to accompany enterprises in participating in labour court proceedings, protecting the legal rights and interests of the enterprise before the court.