Employment Termination in Vietnam: What Foreign Employers Need to Know

Vietnam’s labor market has become an attractive destination for many foreign investors and multinational companies. However, terminating an employee in Vietnam is not as straightforward as in many other jurisdictions. The Labor Code 2019 sets strict regulations to protect employees’ rights, and non-compliance can lead to significant legal and financial risks for employers. In case you need advice, please contact Apolo Lawyers via email at contact@apolo.com.vn or Hotline (+84) 903 419 479 for the best advice and support

1. Legal Grounds and Procedures for Termination

Under Vietnamese law, employers may terminate a labor contract under specific circumstances, including:

a. Lawful Reasons for Termination

According to Article 36 and 125 of the Labor Code 2019, employers can terminate employment in cases such as:

• The employee repeatedly fails to perform duties according to the contract.

• The employee commits serious misconduct (e.g., theft, disclosure of trade secrets).

• The company undergoes restructuring, merger, or technological changes that affect job positions.

• The employee reaches retirement age or is absent without justification for a prescribed period.

b. Required Procedures

Termination must comply with formal procedures, including:

• Providing advance notice (usually 30–45 days depending on the contract type).

• Consulting with the internal trade union (if applicable).

• Issuing a written termination decision with clear justification.

• Paying all outstanding salaries, severance allowance, and ensuring full settlement of social insurance contributions.

Employment Termination in Vietnam: What Foreign Employers Need to Know

Failure to comply with these procedures can result in the termination being deemed unlawful, and the employer may be required to reinstate the employee or pay compensation equivalent to several months of salary.

2. Apolo Lawyers’ Legal Services for Foreign Employers

At Apolo Lawyers, we specialize in advising foreign-invested enterprises (FIEs) and international employers on all aspects of labor law compliance in Vietnam.

Employment Termination in Vietnam: What Foreign Employers Need to Know

Our key services include:

• Legal consultation on employment termination, labor contract management, and compliance with the Labor Code 2019.

• Review and drafting of employment contracts, internal labor regulations, and termination decisions.

• Representation and dispute resolution before labor authorities and courts in case of wrongful termination claims.

• Training and compliance support for HR departments and foreign managers to understand Vietnamese labor practices.

With a team of experienced Vietnamese lawyers fluent in English, Apolo Lawyers ensures your business operates safely within the local legal framework while protecting your company’s interests.

>> View more: How to Set Up a Business in Vietnam – Why You Need a Lawyer

>> View more: Navigating Foreign Direct Investment: Characteristics and Conditions for Enterprises