Unilateral termination of labor contract: Understand It Correctly to Avoid Legal Risks

💡 Why is it important to clearly understand unilateral termination of a labor contract?

Understanding the regulations on unilateral termination helps both employees and employers:

Protect their legal rights and interests
Avoid legal risks
Maintain a professional and reputable image for themselves or their business
Be aware of the rights and obligations arising upon termination of the labor contract

Termination of Labor Contract

📌 Legal basis: Article 34 of the 2019 Labor Code

Termination of a labor contract means ending the employment relationship between the employee and employer, rendering the labor contract legally invalid from the point of termination. After termination, the parties are no longer bound by obligations related to work performance, salary payment, or compliance with contract terms (except for certain post-contract obligations like handovers, settlements, confidentiality, etc., if stipulated).

A labor contract shall be terminated in the following cases:

Expiration of the contract
Completion of the work under the contract
Mutual agreement between both parties to terminate
The employee is sentenced to imprisonment, death penalty, or prohibited from doing the work specified in the contract
The employee is deported or no longer permitted to reside/work in Vietnam
The employee dies, is declared legally incapacitated, or missing
The employer (individual) dies, is missing, or loses legal status
The employee is dismissed due to disciplinary action
The employee unilaterally terminates the contract
The employer unilaterally terminates the contract
The employer lays off the employee according to legal regulations
The work permit expires for foreign employees in Vietnam
Probation is unsuccessful or the probation agreement is canceled

Unilateral Termination of Labor Contract

Unilateral termination of a labor contract refers to one party in the employment relationship (either the employee or the employer) deciding to end the contract without the other party's consent, but this must be done for a valid reason and in accordance with the law.

Employees have the right to unilaterally terminate their labor contracts (i.e., resign), but to ensure business operations are not disrupted, the law requires advance notice in many situations. The aim is to give the employer sufficient time to prepare and reorganize while also safeguarding employees' legitimate rights.

Unilateral Termination by the Employee

📌 Legal basis: Article 35 of the 2019 Labor Code

Employees may unilaterally terminate the labor contract, but must notify the employer in advance as follows:

For certain industries or specific jobs, the notice period shall follow Government regulations.

Cases where employees are not required to give advance notice:

Not assigned to the correct job, location, or working conditions as agreed (except as per Article 29 of the Labor Code)
Not paid in full or on time (except as per Clause 4, Article 97)
Subjected to abuse, physical violence, verbal insults, or actions affecting health, dignity, or honor
Forced labor
Sexual harassment in the workplace
Pregnant female workers needing to resign
Reaching retirement age
The employer provides false information

Unilateral Termination by the Employer

📌 Legal basis: Article 36 of the 2019 Labor Code

An employer may unilaterally terminate the labor contract under the following circumstances:

The employee frequently fails to complete assigned work
Prolonged illness or recovery after an accident
Natural disasters, fire, pandemics, etc., leading to job cuts
The employee fails to return after a period of suspension
The employee reaches retirement age
Absence from work for 5 or more consecutive days without a valid reason
Providing false information that affects contract signing

The employer must provide prior notice to the employee:

For certain industries or specific jobs, the notice period shall follow Government regulations.

Cases where employers are not required to give advance notice:

The employee is absent for 5 or more consecutive working days without a valid reason
The employee does not return after the permitted suspension period

📌 Legal basis: Article 37 of the 2019 Labor Code

Cases Where Employees May Not Unilaterally Terminate the Labor Contract

When receiving treatment or rehabilitation for illness, accident, or occupational disease as prescribed by a competent medical authority (except for the case in Point b, Clause 1, Article 36)
During annual leave, personal leave, or other approved absences
During pregnancy, maternity leave, or when caring for a child under 12 months old

Responsibilities Upon Unilateral Termination

General Responsibilities

When a labor contract is unilaterally terminated lawfully, both employer and employee must settle all payments and related rights within 14 days from the termination date. In some cases, this period may be extended but must not exceed 30 days.

Employer’s Responsibilities

Complete social insurance documentation and return any employee records
Provide copies of related documents upon request (at the employer’s expense)
Pay unemployment allowances in accordance with Article 46 of the 2019

👉 If you need support in unilaterally terminating a labor contract or legal advice on lawful termination procedures, contact our legal team for specific consultation.