Layoff regulations Vietnam 2026 update

What is dismissal? Dismissal is a form of labor disciplinary action in which an employer terminates an employee's employment contract due to serious violations of laws or company regulations. This article from Faro Vietnam will help you understand the legal regulations regarding dismissal and the detailed steps to follow in accordance with the law.

1. What is Dismissal?

What is dismissal or lay-off? This is the most severe form of labor discipline, applied by employers to terminate employment contracts with employees when they commit serious violations of labor discipline that harm the business.

According to Article 125 of the 2019 Labor Code, dismissal is stipulated as one of four forms of labor disciplinary action, alongside reprimand, delaying salary increases, and demotion. This shows the serious nature and clear difference of dismissal compared to other disciplinary measures.
 

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2. Steps to Legally Dismiss an Employee

2.1. Confirming the Violation

The first and most crucial step in the labor disciplinary process is confirming the violation. As soon as signs of a labor disciplinary violation are detected, the employer must promptly and effectively create a written record of the incident. Creating a record on the spot ensures the accuracy and objectivity of the information, documenting the specific circumstances of the violation. The record should clearly state the time, location, content of the violation, witnesses (if any), and signatures of all relevant parties.

2.2. Organizing a Disciplinary Meeting

After verifying the violation and gathering sufficient evidence, the next step is to organize a disciplinary meeting. This meeting plays a vital role in ensuring transparency, openness, and democracy in the decision-making process regarding dismissal.

Before the meeting takes place, the employer must send written notice to the relevant parties at least 5 working days before the scheduled meeting date. The parties to be notified include: the employee representative organization at the workplace (if any), the employee being considered for disciplinary action, and the employee's legal representative if the employee is under 15 years old. The notice must clearly state the time, location of the meeting, and the main agenda (disciplinary action). The time and location of the meeting must be publicly and clearly stated so that all parties can make necessary preparations.

2.3. Issuing the Disciplinary Decision

After the disciplinary meeting has been fully and properly conducted, the employer will review the factors and evidence to make a final decision on dismissal. The dismissal decision must be issued in writing and signed by an authorized person.

3. Is Prior Notice Required When Dismissing an Employee?

Current labor laws, specifically the 2019 Labor Code, do not stipulate the obligation of "advance notice" when applying dismissal. Dismissal is considered a labor disciplinary measure, distinct from unilateral termination of an employment contract, and therefore the principle of advance notice in the conventional sense does not apply.
 

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However, before making a dismissal decision, the employer must fully comply with the disciplinary process, including sending a notice of the disciplinary meeting to the employee and relevant parties at least 5 working days before the meeting takes place. This allows the employee time to prepare and understand the information before the disciplinary decision is issued.

In addition, the law allows businesses to temporarily suspend an employee's work if the violation is serious and requires time for investigation and verification. The maximum suspension period is 15 working days, and in exceptionally complex cases, it can be extended to 90 days. During this period, the employee receives an advance payment of 50% of their contractual salary; if they are not subsequently dismissed, they must be paid the remaining amount in full.

4. Responsibilities of the Parties Upon Termination of an Employment Contract

When an employment contract is terminated due to disciplinary dismissal of the employee, both the employer and the employee have legal responsibilities to fulfill. These responsibilities are specifically stipulated in Clause 8, Article 34 and Article 48 of the 2019 Labor Code, aiming to ensure the rights of the employee and the compliance of the enterprise with the law after the employment relationship ends. Specific regulations and responsibilities of the parties:

• Payment deadline for related amounts: The employer is responsible for paying the employee all entitlements within 14 working days from the date of contract termination. In some special cases, the deadline may be extended but not exceeding 30 days.
• Priority payment when a business is dissolved or goes bankrupt. In this case, payments related to employees are made first.
• Other benefits as per the contract or collective labor agreement.

Hopefully, the above article has helped you understand what dismissal is, the permitted cases, and its legal consequences. Mastering this knowledge helps build a transparent, fair, and stable labor environment, contributing to the sustainable development of the job market. To learn more about labor law, visit Faro Vietnam today.

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