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Notice periods in Vietnam
Termination of employment in Vietnam
Post-termination restraints in Vietnam
Employment waivers in Vietnam
Employment policies during mergers and acquisitions in Vietnam
Offboarding without stress with CXC
End of employment in Vietnam
Ending an employment relationship in Vietnam requires careful adherence to local labour laws, especially when issuing an end of contract letter to an employee. Whether the employment ends due to contract expiry, company restructuring, or termination with cause, employers must follow regulated procedures to avoid disputes and ensure transparency.
Vietnamese labour law mandates that employees be given proper notice in writing when their contract is ending. This end of contract letter should outline the reason for the termination, the effective date, any entitlements such as unused leave or severance, and instructions for final handover. Providing a clear and respectful communication not only fulfils legal requirements but also helps maintain a professional employer brand.
When preparing an end of contract letter sample for employees, it is important to tailor the content according to the type of employment contract involved—fixed-term, seasonal, or indefinite. For instance, employees on fixed-term contracts that expire naturally may not be entitled to the same level of severance as those whose contracts are terminated prematurely due to a merger or redundancy.
Partnering with an Employer of Record (EoR) like CXC can help simplify this process. CXC ensures full compliance with Vietnamese labour laws, from drafting compliant letters to managing final payroll, benefits, and statutory payments during offboarding.
By handling contract endings with fairness, clear documentation, and professional support, employers can minimise legal risk and preserve workforce goodwill.
Notice periods in Vietnam
Navigating the notice period in Vietnam is a key part of managing employment contracts and ensuring smooth transitions in the workplace. Employers must be aware of the legal requirements around termination and resignation notices to maintain compliance and foster respectful employer-employee relationships.
Termination notice period in Vietnam
Under Vietnam’s labour law notice period provisions, notice of termination must be given in writing. The duration depends on the type of labour contract in place. For an indefinite labour contract, the required notice is 45 days. If the contract is definite, lasting between one and three years, a 30-day notice is necessary. For seasonal contracts, which are contracts of less than one year, the notice period is only three working days. It is important to note that no notice is mandated during the probation period, providing flexibility in initial hiring phases.
Resignation notice period in Vietnam
Employees resigning from their roles must also adhere to the specified notice periods to comply with Vietnamese labour regulations. Resignations generally follow the same notice durations as termination, depending on the contract type, and must be submitted in writing. This allows employers sufficient time to prepare for the employee’s departure and ensures a smoother handover process.
Probation period in Vietnam
The probation period in Vietnam is designed to match the job’s complexity and required skills. Typically, this ranges from 6 to 60 days for most roles, but for managerial positions, the probation can extend up to 180 days. The salary during this probation period must be agreed upon in writing and cannot be less than 85% of the salary paid for the permanent role. This ensures fair treatment of employees while allowing employers to assess suitability.
Severance pay in Vietnam
Employers are obligated to provide severance pay to employees who have worked continuously for 12 months or longer. The severance amount equals half a month’s wages for each year of service. Contributions to a severance fund are made monthly by both the employer and employee, from which the final payment is drawn upon termination.
Familiarity with Vietnam’s labour law’s mandated notice period rules helps employers handle terminations and resignations professionally and within legal boundaries, reducing risks and fostering a positive work environment.
Termination of employment in Vietnam
Managing the end of an employment relationship requires careful attention to legal requirements and best practices to avoid disputes and ensure fairness. Vietnam’s labour laws set out specific rules governing the termination of contracts, balancing employer rights with employee protections. Employers must approach termination with clear justifications and proper documentation to remain compliant.
Lawful vs unlawful termination in Vietnam
Vietnam’s labour law on termination establishes strict grounds under which an employer may legally end an employment contract. These include mutual agreement between parties, expiry of a fixed-term contract, unsatisfactory job performance, company restructuring, employee misconduct, or prolonged illness preventing work.
Termination must always be supported by written notice specifying the reasons. It is important to note that terminating an employee during paid leave is prohibited under Vietnamese regulations. Employers should carefully assess whether the cause for dismissal aligns with the permitted legal grounds, as failure to comply may lead to claims of unlawful termination in Vietnam.
Unlawful dismissal can occur if employers terminate without valid cause, fail to follow required notice procedures, or discriminate unlawfully. This can result in penalties or reinstatement orders, making it critical to adhere closely to the Labour Code provisions.
Best practices when terminating employment in Vietnam
To manage terminations effectively, employers should document performance issues or misconduct clearly and provide employees with opportunities to improve where applicable. Written warnings and performance reviews serve as important evidence supporting lawful dismissal.
Providing termination notice in writing, respecting notice periods, and ensuring the employee receives all due payments, including severance where applicable, promotes compliance. Employers should avoid terminating employees during protected periods, such as paid leave or maternity leave.
Consulting with legal experts familiar with Vietnamese labour law before proceeding with termination helps mitigate risks of disputes. Transparent communication, fair treatment, and compliance with procedural requirements support a smooth transition while protecting the company’s reputation and reducing legal exposure.
For more detailed guidance on Vietnam’s labour law on termination, employers may refer to official labour regulations or seek advice from specialised employment law practitioners.
Post-termination restraints in Vietnam
Employers often rely on post-termination restraints to safeguard their business interests after an employee leaves. These restraints typically include non-compete and non-solicitation agreements, which prevent former employees from engaging in competitive activities or soliciting clients and staff. However, in Vietnam, the legal environment around these post-employment restrictions is limited and somewhat unclear, making it important for employers to carefully design and enforce such agreements.
Non-competes in Vietnam
Vietnam’s Labour Code 2019 does not specifically regulate non-compete clauses, creating uncertainty about their enforceability once the employment relationship ends. Article 21.2 allows employers to require employees involved with business or technological secrets to sign confidentiality agreements during employment, including terms on compensation. These agreements are enforceable if breached while employed.
However, the Labour Code generally views labour contracts as governing only the employment period. Therefore, any non-compete provisions intended to apply after termination are usually considered unenforceable if included in the labour contract. Courts have not provided clear guidance on this, adding to the ambiguity.
To address this, employers typically draft separate civil contracts with employees to cover non-compete obligations after the employment ends. These civil agreements are treated under civil law, which allows post-termination covenants to be binding if reasonable in scope, duration, and compensation. Employers should ensure the non-compete agreements clearly define the geographic area, duration (often 6 to 12 months), and financial compensation to increase their chances of enforcement.
Non-solicits in Vietnam
Non-solicitation clauses, which prevent former employees from soliciting company clients or staff, are not specifically regulated under Vietnam’s Labour Code. Their enforceability remains uncertain and can be difficult to uphold without explicit legal backing.
Employers wanting to impose non-solicitation restrictions should also use separate civil contracts to set out the terms. Clearly defining who or what is protected, the duration of the restriction, and consequences of breach is critical. Without clear regulations, these agreements may be vulnerable to legal challenges, so legal advice is recommended when drafting.
In conclusion, while post-termination restraints like non-competes and non-solicits can be valuable, employers in Vietnam must navigate a complex and evolving legal landscape. Drafting clear, separate civil agreements and offering appropriate compensation are key to strengthening enforceability and protecting business interests.
Employment waivers in Vietnam
Employment agreements often include various waivers that can affect the rights and obligations of both employers and employees. However, when it comes to the waiver in contract law within Vietnam, employers must tread carefully, as the legal framework does not clearly support the waiver of statutory employee rights.
Employment waiver laws in Vietnam
Vietnamese labour law does not explicitly regulate the waiver of statutory rights by employees. In practice, any waiver laws that attempt to allow an employee to give up legally protected rights or entitlements, such as minimum wages, paid leave, or severance pay, are generally viewed as unenforceable. The government prioritises the protection of employee rights as outlined in the Labour Code and related regulations, making it difficult for employers to rely on waivers to circumvent these obligations.
Because statutory protections are designed to safeguard workers’ fundamental rights, courts in Vietnam tend to invalidate any contractual terms that attempt to waive such protections. This means that while employees can waive certain contractual rights voluntarily, waivers that conflict with mandatory labour standards will not be upheld.
Best practices when enforcing employment waivers in Vietnam
Given the limitations of waiver laws in Vietnam, employers should exercise caution when including waivers in employment contracts. To ensure any waiver provisions are legally sound and enforceable, it is advisable to:
- Clearly distinguish between waivers of statutory rights (which are unlikely to be enforceable) and waivers of other contractual rights or claims that are not protected by law.
- Use clear, unambiguous language in any waiver clauses to ensure that employees understand what rights they may be waiving.
- Avoid using waivers to override core employee protections, such as minimum wage, social insurance contributions, or paid leave.
- Obtain explicit, documented consent from employees when including any waiver clauses, ensuring transparency and fairness.
- Consult legal experts experienced in Vietnamese labour law to draft contracts that comply with local regulations while managing risk effectively.
In conclusion, while employment waivers can be a useful tool for managing contractual relationships, their enforceability in Vietnam is limited when it comes to statutory employee rights. Employers should prioritise compliance with the Labour Code and approach waivers carefully to avoid legal disputes.
Employment policies during mergers and acquisitions in Vietnam
Mergers and acquisitions (M&A) in Vietnam present unique challenges, especially regarding employee rights and employment policies. Employers involved in such corporate changes must carefully navigate Vietnam’s merger and acquisition regulations to ensure a smooth transition and compliance with local labour laws.
Vietnam’s merger controls
Vietnam’s merger control framework governs how companies can consolidate, merge, or restructure. When a transfer of assets, ownership change, division, consolidation, or company conversion impacts employees, specific obligations arise. The outgoing employer is required to prepare a detailed labour usage plan that outlines how the workforce will be managed post-transaction. Both the outgoing and successor employers are responsible for implementing this plan to maintain labour stability during the transition.
Labour authorities closely monitor such transactions to protect workers affected by these changes. Employers must ensure compliance with all procedural requirements, including timely notification and consultation with employees, to avoid legal risks.
Best transfer of undertaking practices in Vietnam
During a transfer of undertaking, it is critical to uphold employees’ rights and maintain transparent communication. Employers should:
- Prepare a comprehensive labour usage plan early in the process to clarify the impact on staff and future workforce management.
- Honour existing employment contracts, as Vietnam’s labour law does not automatically terminate contracts due to company restructuring.
- When employee contracts are terminated due to M&A-related changes, employers must pay a job-loss allowance. This severance is required for employees who have worked continuously for at least 12 months and is calculated based on half a month’s wages for each year of service.
- Collaborate closely with legal and HR professionals to ensure all employment changes comply with Vietnamese labour regulations and avoid potential disputes.
- Maintain clear communication channels with employees throughout the process to foster trust and minimise disruptions.
Understanding these practices helps businesses manage the workforce effectively during mergers and acquisitions while respecting employee rights under Vietnamese law.
Offboarding without stress with CXC
Ending an employment relationship in Vietnam is not as simple as giving notice. It involves clear legal steps and missing one can led to disputes, delays, or even legal claims.
From confirming valid reasons for offboarding to issuing final pay, severance, and proper exit documents, every detail matters. Business transfers, contract conclusions, or voluntary resignations all come with their own regulations. And if those are not followed, you are exposed.
That is where CXC steps in. We manage the offboarding process from start to finish, making sure everything is done by the book. No guesswork. No risks. Just a smooth, compliant exit for your business and your employee.
Need help managing workers from onboarding to offboarding? We can help.
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