“Mass layoffs” in Vietnamese labour practice are not disciplinary dismissals at all, but the termination of many employees for structural or technological change or for economic reasons. In that process the employee representative organisation is not a spectator — it is a party whose participation is mandated at clearly defined milestones.
The two collective-redundancy doors and the union’s place
The 2019 Labour Code sets two doors for cutting many jobs. The first is structural or technological change (Article 42): reorganisation of structure and labour; changes in processes, technology, machinery tied to the production line; changes in products or product mix leading to fewer workers. The second is economic reasons (Article 43): economic crisis or recession, or implementing state policies and laws when restructuring the economy. Both doors affect many employees’ jobs and both trigger the same protective procedure in Articles 44 and 45.
Inside that procedure, the workplace representative organisation (usually the grassroots union) participates in building the labour utilisation plan — the central document of any redundancy round. Where no representative organisation exists yet, employee voices are gathered through the democracy-regulations channels, and the directly superior union can support representation of the collective. A redundancy round designed in secret inside the director’s office and announced as a done deal inverts the law’s design entirely.
The labour utilisation plan and the Article 45 thirty-day lock
The labour utilisation plan under Article 44 must carry core contents: the number and list of employees retained, of those retrained for continued employment, of those retiring, of those moved to part-time work, and of those whose contracts must end; plus the measures and financial sources guaranteeing implementation. The plan is built with the representative organisation’s participation, and the company must prioritise retraining and redeployment before resorting to terminations.
Article 45 sets the final gate: the employer may only let employees go after having discussed with the workplace representative organisation and given thirty days’ prior notice to the provincial People’s Committee (the labour authority) and to the employees. This notice is no after-the-fact report — it is a time condition that must fully run before the first departure date, and the local labour authority may step in and demand clarification if the plan shows signs of violation.
Job-loss allowance and the dispute front
Employees let go through the structural or economic doors receive a job-loss allowance under Article 47: one month’s salary per year of service, with a floor of two months, where the counting period is total actual working time minus periods covered by unemployment insurance and periods for which allowances were already paid. This differs from the Article 46 severance allowance for ordinary terminations — confusing the two regimes is a very common costing error in redundancy rounds.
On disputes, a redundancy round is most often challenged at three points: whether a genuine Article 42 or 43 ground exists or is merely a pretext for removing individuals; whether representative participation and the thirty-day notice were complete; and whether the selection list shows discrimination (targeting union officials, pregnant employees, those raising small children). The representative organisation may support and represent the collective in mediation and litigation; a plan built transparently with the union from the start is the company’s cheapest insurance.
Frequently Asked Questions
Must mass layoffs go through the union?
They must pass steps with representative participation: the labour utilisation plan under Article 44 of the 2019 Labour Code is built with the representative organisation’s participation; and under Article 45 the company may only let staff go after discussing with the representative organisation and giving thirty days’ notice to the provincial People’s Committee (labour authority) and the employees.
What is the plan?
The labour utilisation plan must state: employees retained, employees retrained for continued work, retirees, those moved to part-time work, and those whose contracts must end, plus implementation measures and financing (Article 44). Retraining and redeployment take priority over termination.
What allowance is paid?
A job-loss allowance under Article 47 of the 2019 Labour Code: one month’s salary per year of service, minimum two months, counted on total actual service minus unemployment-insurance periods and previously paid allowance periods. Do not confuse it with the Article 46 severance allowance for ordinary terminations.
Where do disputes bite?
Challenges usually target: whether the Article 42/43 ground is genuine; whether representative participation and the thirty-day notice were complete; and whether the selection list discriminates. The representative organisation may support and represent the collective in mediation and suits; a plan built transparently with the union from the outset sharply reduces this exposure.
This article has been quality-reviewed by the FLAW AI Legal Council