When do enterprises unilaterally terminate a labor contract?

Enterprises unilaterally terminate a labor contract is a unilateral act to terminate the labor relationship with an employee when there are grounds. Unilateral termination must strictly comply with the provisions of labor law. The article below will provide specific information about schools as well as procedures for enterprises to unilaterally terminate a labor contract.

Cases where enterprises unilaterally terminate a labor contract

According to the provisions of Article 36 of the Labor Code 2019, the employer has the right to unilaterally terminate the labor contract in the following cases:

1. Employees who regularly fail to complete work according to the labor contract are determined according to the criteria for evaluating the level of work completion in the employer’s regulations.
2. Employees are sick or have accidents and cannot recover their ability to work. Continuous treatment time:

• 12 months for labor contracts of indefinite term.
• 06 months for labor contracts with a fixed term from 12 to 36 months.
• More than half of the contract term for labor contracts under 12 months.
• Due to natural disasters, fires, dangerous epidemics, enemy attacks, or relocation or contraction of production and business at the request of a competent state agency, the employer has sought every remedy but is still forced to reduce the workplace.

3. The employee is not present at the workplace after the deadline specified in Article 31 of the Labor Code 2019.
4. The employee reaches retirement age as prescribed in Article 169 of the Labor Code 2019, unless otherwise agreed.
5. Employees voluntarily quit their job without a legitimate reason for 5 consecutive working days or more.
6. Employees provide dishonest information when concluding labor contracts, affecting the recruitment process.

Obligations when enterprises unilaterally terminate a labor contract

Enterprises must fulfill the following obligations to employees when legally unilaterally terminating labor contracts:

Payment of severance allowance:

According to Article 46 of the Labor Code 2019, companies must pay severance benefits to employees who have worked regularly for 12 months or more, with half a month’s salary paid for each year of employment.

The working time used to calculate severance pay is the total time the employee actually worked, minus the time spent participating in unemployment insurance and the time for which severance pay and redundancy pay were paid.

The salary used to calculate severance pay is the average salary according to the labor contract of the 6 consecutive months before the employee quits his job.

There are two cases where the company does not have to pay severance benefits: when the employee is eligible for pension and when the employee voluntarily quits the job without a legitimate reason for 5 consecutive working days or more.

Payment of amounts related to employee benefits:

According to Clause 1, Article 48 of the Labor Code 2019, the company must fully pay the employee within 14 working days from the date of termination of the labor contract.

This period can be extended up to 30 days in some special cases such as when the employer is not an individual terminating operations, changing structure or technology, or due to natural disasters, fires, enemy attacks or dangerous epidemics.

Other responsibilities:

Complete the procedure to confirm the time of social insurance and unemployment insurance payment and return it along with the original documents if the employer has kept the employee’s.

Provide copies of documents related to the employee’s work history if the employee requests. The cost of copying and sending documents is paid by the employer.

Procedures for enterprises unilaterally terminate a labor contract

When unilaterally terminating a labor contract, enterprises need to comply with the following procedures:

Step 1: Clearly determine the reason and grounds for termination

Enterprises need to clearly identify the reason for terminating the contract and ensure that this reason is consistent with the provisions of labor law.

Step 2: Notify workers in advance

The notice period depends on the type of employment contract.

• At least 45 days for indefinite term labor contracts.
• At least 30 days for fixed-term labor contracts from 12 to 36 months.
• At least 03 working days for labor contracts with a fixed term of less than 12 months.
• For some specific occupations, the notice period may be different according to Government regulations.

In case the employee voluntarily quits his job or is not present at the workplace after the prescribed time limit, the enterprise does not need to notify in advance.

Step 3: Make a decision to terminate the labor contract

This decision must clearly state the reason for termination, termination time and the amounts the enterprise must pay to the employee.

Step 4: Fulfill financial obligations

Pay severance benefits, pay related amounts and complete social insurance and unemployment insurance procedures for employees.

Complete insurance procedures and return documents: Complete procedures related to social insurance, unemployment insurance and return original documents to employees.

>>> See more: Company Terminates Labor Contract Before Expiration: What Should You Note?

Consulting services and guidance for enterprises unilaterally terminate a labor contract

Long Phan provides consulting services and detailed guidance on the process for Enterprises unilaterally terminate a labor contract. Below are our services:

• Consulting on cases where enterprises unilaterally terminate a labor contract;
• Consulting on rights and obligations when unilaterally terminating a contract;
• Advise on advance notice period;
• Consulting and guiding the process of terminating labor contracts;
• Support businesses in developing procedures for legally terminating labor contracts;
• Drafting notices and decisions to terminate labor contracts;
• Consulting on dispute resolution (if any);
• Consulting and answering other related issues.

Frequently Asked Questions (FAQ)

Below are frequently asked questions about enterprises unilaterally terminate a labor contract

Are employees entitled to severance pay if they have worked for less than 12 months?

No, employees are only entitled to severance pay when they work regularly for 12 months or more.

Does an enterprise have to pay wages for days not taken on annual leave when terminating the labor contract?

Yes, according to the provisions of Article 113 of the Labor Code 2019, enterprises must pay wages for the days of unpaid annual leave of employees when the labor contract terminates.

If enterprises unilaterally terminate a labor contract illegally, what rights do employees have?

According to Article 41 of the Labor Code 2019, if unilaterally terminated illegally, the employee has the right to be reinstated and compensated with wages for days not worked plus at least 02 months’ salary according to the labor contract. If the employee does not want to work again, in addition to the salary for the days not worked and at least 02 months salary according to the labor contract, they will also receive a severance allowance.

Do employees have the right to complain if they disagree with the enterprise’s decision to unilaterally terminate the labor contract?

Yes, workers have the right to complain to the enterprise, the labor conciliator or sue in court.

Does an enterprise have the right to unilaterally terminate the labor contract of an employee who is on probation?

According to Article 27 of the Labor Code 2019, during the probationary period, each party has the right to cancel the probation agreement or the signed labor contract without prior notice and without compensation.

In what cases can an enterprise reduce the notice period when unilaterally terminating a labor contract?

Enterprises are not allowed to reduce the notice period. Mandatory compliance with current laws.

Conclude

Enterprises unilaterally terminate a labor contract must comply with the provisions of law. Otherwise, it can lead to unnecessary disputes, causing damage to the reputation and finances of the business. To ensure the process of terminating the labor contract goes smoothly and legally, please contact Long Phan Consulting Company via the hotline: 0906735386 for detailed advice and support.