Checklist Terminating Labor Contract Vietnam: 10 Steps Without a Counterclaim

Terminating a labor contract is the employer's riskiest decision: a single error in the legal ground, the notice period, or the allowance calculation is enough for the employee to sue, and the company must bear heavy compensation duties under Article 41 of the Labor Code 2019. This checklist terminating labor contract Vietnam sets out 10 mandatory steps for directors, HR and in-house counsel before signing any termination decision, with the specific legal basis for each step.

Table of contents

• 1. Who should use this checklist and how
• 2. Detailed checklist
• 3. Common mistakes when doing this yourself
• 4. After completing the checklist
• 5. Frequently asked questions

1. Who should use this checklist and how

This checklist terminating labor contract Vietnam is for employer companies preparing to terminate a labor contract with one or a group of employees, in unilateral termination, mutual termination, or dismissal situations. Do not use it for mass layoffs due to economic reasons or structural/technological changes — those follow the separate procedures of Articles 42, 43 and 44 of the Labor Code 2019.

How to use: mark ☐ for items not done, ☑ for items completed with evidence filed, ⚠ for items needing counsel before signing. Golden rule: do not issue the termination decision while any item remains ☐. Each item below has four parts: what to do, why, how, and a note — read the "why" carefully to understand the price of skipping.

2. Detailed checklist

The 10 steps in chronological order. Legal bases cited from the Labor Code 2019 (No. 45/2019/QH14, effective 01/01/2021) and its guiding decrees still in force.

Item 1: Choose the right termination path from the start ☐

• What: Determine which termination case under Article 34 of the Labor Code 2019 applies: mutual agreement (clause 3), employer's unilateral termination (clause 9, per Article 36), dismissal discipline (clause 8), or contract expiry (clause 1). Record this choice in an internal meeting minute.
• Why: Each path has different conditions, procedures and financial consequences. Using a unilateral termination decision to handle a disciplinary violation, or vice versa, is an error that gets the decision declared unlawful and saddles the company with the full Article 41 compensation duties.
• How: Match the facts against each clause of Article 34; where several grounds coincide, choose the path with the strongest evidence. Where dialogue is still possible, prefer mutual termination under Article 34(3) — the least dispute-prone route.
• Note: Mutual termination does not mean zero cost: a qualifying employee still gets severance allowance under Article 46, since Article 34(3) is listed among the entitled cases in Article 46(1).

Item 2: Rule out the cases where unilateral termination is prohibited ☐

• What: Before signing anything, check whether the employee falls under Article 37 of the Labor Code 2019: being sick, injured or suffering occupational disease and under treatment or convalescence as prescribed by a competent medical facility; on annual leave, personal leave or other leave consented by the employer; female employees who are pregnant, on maternity leave or nursing a child under 12 months old.
• Why: Unilateral termination in these cases is clearly unlawful. The consequence is the full Article 41 package: re-employment, back pay plus social/health/unemployment insurance contributions for the days off work, plus at least 02 months' wages. Worse, the employee may sue directly in court without conciliation (Article 188(1)(a)).
• How: HR cross-checks leave records, treatment prescriptions, pregnancy notices or birth certificates; obtain written confirmation that the employee is not in a prohibited category before submitting the decision for signature.
• Note: Prolonged illness beyond the statutory treatment period with unrecovered working capacity (Article 36(1)(b)) is a permitted ground, but the notice period must still be respected and the medical records must be complete, continuous and uninterrupted.

Item 3: Match the cited ground word-for-word with Article 36(1) ☐

• What: For unilateral termination, cite only one of the cases in Article 36(1): (a) regular failure to complete work under appraisal criteria; (b) illness/accident treated beyond the statutory period without recovery; (c) natural disaster, epidemic, enemy sabotage or state-ordered production cutback where all remedies have been tried; (d) failure to return to work after the suspension period; (dd) reaching retirement age; (e) voluntary absence without justifiable reason for at least 05 consecutive working days; (g) dishonest information at contracting that affected recruitment.
• Why: Citing the wrong point, or lacking evidence proving the point's content, is the most common reason courts declare unilateral termination unlawful.
• How: Build a separate ground dossier per employee: for point (a) you need a work-appraisal regulation already issued, consulted with the grassroots employee representative organization, and signed appraisal results; for point (e) you need attendance records proving 05 consecutive working days and minutes verifying the absence of justifiable reason.
• Note: Point (a) is the most litigated ground in practice. The appraisal regulation must be issued before the appraisal period, disclosed to employees, and consulted with the employee representative organization. Verbal assessments by a direct manager carry almost no evidentiary weight in court.

Item 4: Calculate the notice period correctly — and know the exemptions ☐

• What: Apply Article 36(2): at least 45 days' notice for indefinite-term contracts, at least 30 days for fixed-term contracts of 12–36 months, at least 03 working days for contracts under 12 months and for the prolonged-illness case at Article 36(1)(b). For certain special industries, trades and jobs, the notice period follows Article 7 of Decree 145/2020/ND-CP. No notice is required in the two Article 36(3) cases: failure to return after suspension (point d) and voluntary absence of 05 consecutive working days (point e).
• Why: Breaching the notice period risks not only an unlawful-termination finding but also a payment equal to wages for the days without notice under Article 41(1).
• How: Count from the day the notice is delivered with the employee's signed acknowledgment or other valid delivery evidence; add the full days for the contract type; file the delivery slip.
• Note: The classic trap is confusing calendar days with working days: 45 and 30 days are calendar days; 03 days are working days, excluding weekly days off and public holidays. One day short is enough for the employee to complain.

Item 5: Issue the termination document in the right form, by the right authority ☐

• What: Issue the labor-contract termination decision or notice in writing, stating: the specific legal ground down to point and clause; the reasons tied to evidence; the contract end date; the employee's payable benefits. The document must be signed by the authorized person — the legal representative or a duly authorized person in writing.
• Why: Failing to notify the employee of contract termination in writing is fined 1–3 million VND under Article 18(1) of Decree 283/2026/ND-CP, and fines for organizations are double those for individuals under Article 7. More importantly, a document with vague or missing grounds becomes the employee's first exhibit in a lawsuit.
• How: Use a company-standard template cleared by in-house counsel; verify the authorization letter's validity if the signer is not the legal representative; deliver one copy to the employee and keep delivery evidence.
• Note: For an employee who is a member of the leadership board of the grassroots employee representative organization, reach a written agreement with that board before unilateral termination; if no agreement, notify the provincial labor authority in advance per Article 177(3). Breach is fined 10–20 million VND under Article 39(2) of Decree 283/2026/ND-CP.

Item 6: Calculate severance or job-loss allowance correctly ☐

• What: Identify which applies. Severance allowance under Article 46 applies when the contract ends under Article 34(1),(2),(3),(4),(6),(7),(9),(10), with at least 12 months' regular work, at half a month's wage per working year — except where the employee qualifies for retirement pension or falls under Article 36(1)(e) (voluntary 05-day absence). Job-loss allowance under Article 47 applies to job loss under Articles 42–43, with at least 12 months' regular work, at 01 month's wage per working year with a minimum of 02 months' wages. The counted period must exclude time covered by unemployment insurance and time already paid severance/job-loss allowance. The wage base is the average wage of the 06 consecutive months under the labor contract before termination.
• Why: Allowance disputes are among the cases the employee may take straight to court without conciliation (Article 188(1)(b)). Miscalculating the allowance is handing yourself a lawsuit.
• How: Build a detailed calculation sheet per employee: total actual working time, time excluded for unemployment insurance participation, previously paid allowance periods, and the 06-month average wage; have two people independently cross-check before payment.
• Note: The most common trap is forgetting to exclude unemployment-insurance participation time — leading to overpayment that is nearly impossible to recover. The second is using the social-insurance contribution wage as the base instead of the contract wage averaged over 06 months as the law requires.

Item 7: Pay in full within 14 working days ☐

• What: Within 14 working days from the contract termination date, both parties must fully settle all amounts related to each party's rights. Only in special cases — the non-individual employer ceasing operations, structural/technological change, split/merger, natural disaster/fire/epidemic — may the period be extended, but not beyond 30 days per Article 48(1).
• Why: Late payment adds an independent ground for suit. Moreover, employees' wages, social insurance and severance allowances enjoy payment priority when the enterprise ceases operations, dissolves or goes bankrupt under Article 48(2).
• How: Schedule payment from the day the termination decision is signed; make bank transfers with each item described in the reference; keep payment orders and detailed statements acknowledged by the employee.
• Note: The law does not allow the company to withhold part of wages or allowances to force the employee to hand over work. Handover must be handled as a separate process with a deadline and a designated receiver — never by deducting the employee's money.

Item 8: Finalize the social insurance book and return documents on time ☐

• What: Complete the confirmation of social insurance and unemployment insurance contribution periods and return the book together with the originals of any other documents the company held; provide copies of work-process documents if requested, with copying and delivery costs borne by the company per Article 48(3). Coordinate with the social insurance agency on contribution-period confirmation when the employee terminates the contract under Article 13 of the Social Insurance Law 2024 (effective 01/7/2025).
• Why: Social insurance disputes do not require conciliation — the employee may sue directly (Article 188(1)(d)). Late finalization prevents the employee from claiming unemployment benefits, and that real damage can be claimed as compensation.
• How: Report the headcount reduction and file the book-finalization dossier right after the termination date; reconcile the contribution history with the agency before handing the book to the employee.
• Note: The law sets no exact day count for finalization, but agencies typically process within 15–30 days of receiving a complete dossier. The number-one cause of stuck finalizations is outstanding social insurance debt — clear it before terminating contracts in volume.

Item 9: Keep the entire dossier as if court were tomorrow ☐

• What: Keep a complete file per termination case: labor contract and appendices; internal labor regulations and appraisal regulations; notice documents with delivery evidence; termination decision; allowance calculation sheets; payment vouchers; social insurance finalization records; meeting minutes with the employee.
• Why: Disputes over dismissal, unilateral termination, damages and termination allowances may all bypass conciliation. The employee may petition the court directly under Article 188(1). Then, whichever side has a complete, coherent file takes the initiative.
• How: One employee, one file, both paper and scanned copies centralized at HR or in-house counsel, with clear access rights, retained at least until the statute of limitations expires and all complaints are resolved.
• Note: Internal emails and messages about the termination may become evidence. Do not delete them — but also do not let content showing an intent to force the employee out "at all costs" slip into the file; such lines will turn against the company in court.

Item 10: Have a lawyer review the file one final time before signing ☐

• What: Before issuing the termination decision, send the complete dossier for independent counsel review: is the cited ground the right point and clause, is the notice period sufficient, is the allowance calculation accurate — and especially the specially protected cases: pregnant or nursing mothers of children under 12 months, leadership members of the employee representative organization, foreign employees, employees under medical treatment.
• Why: Reviewing one termination decision always costs far less than one Article 41 lawsuit: re-employment, back pay plus insurance for all the days off work, at least 02 months' additional wages, plus court fees and both sides' counsel costs through a long proceeding.
• How: Send counsel the full dossier assembled in Item 9 plus the draft termination decision; require written legal advice and sign only after the risk points are cleared.
• Note: Do not wait for the lawsuit to arrive before finding a lawyer. Once a dispute arises, all evidence is frozen and errors in the termination decision are nearly impossible to fix.

3. Common mistakes when doing this yourself

Five errors companies make most when handling this themselves, with consequences and fixes.

Mistake 1: Using a termination decision to dodge dismissal procedures. When the employee committed a disciplinary violation, some companies issue a unilateral termination decision instead of following dismissal procedures. The decision is then declared unlawful for breaching the disciplinary principles of Article 122: the employer must prove fault, involve the grassroots employee representative organization, allow the employee's self-defense, and record the proceeding in minutes. Fix: a disciplinary case goes through the disciplinary path, with complete internal regulations, minutes and procedures.

Mistake 2: Citing Article 36(1)(a) without a valid appraisal regulation. Many decisions cite regular failure to complete work while the company never issued a work-appraisal regulation, or issued one without consulting the employee representative organization. In court, this ground collapses entirely. Fix: issue and disclose the appraisal regulation in advance, appraise periodically with signed records, then use the results as the ground.

Mistake 3: Forgetting to exclude unemployment insurance time when calculating severance. Under Article 46(2), the severance period must exclude unemployment-insurance participation time. Skipping this overpays a significant amount that is nearly impossible to recover from a departed employee. Fix: reconcile the unemployment-insurance history on the social insurance agency's system before building the calculation sheet.

Mistake 4: Short notice or no delivery evidence. Confusing calendar days with working days, or delivering notice verbally, gets the company treated as breaching the notice period and paying wages for the days without notice under Article 41. Fix: count days carefully per contract type, deliver in writing with the employee's signed acknowledgment, and file the delivery slip.

Mistake 5: Skipping special protection for protected employees. Terminating a pregnant or under-12-month-nursing mother, or a leadership member of the employee representative organization, without meeting Articles 37 and 177(3), both renders the decision unlawful and triggers administrative fines. Fix: make a protected-employee screening a separate step in the internal process, and always ask counsel before touching these cases.

4. After completing the checklist

When all 10 items of this checklist terminating labor contract Vietnam are marked ☑ and the dossier is filed, the company issues the termination decision, pays within 14 working days, and completes the social insurance finalization. Then track two things: first, confirm the employee received all money and documents, with minutes or signed acknowledgment; second, prepare a handling plan in case the employee complains or sues, led by the counsel who reviewed the file from the start.

Seek counsel in these situations: terminating a large number of employees at once; employees under special protection; grounds under Article 36(1)(a) or (g) which require complex evidence; or the company has previously been sued over labor disputes. In such cases, one hour of advice before signing can save months of litigation after.

If your company is preparing to terminate labor contracts and wants this checklist terminating labor contract Vietnam reviewed as a complete file before signing, FLAT Law Firm's lawyers can check the legal grounds, notice periods, allowance calculations and social insurance finalization procedures. Contact the hotline 0988424851 for advice.

5. Frequently asked questions

Must an employer give advance notice when unilaterally terminating a labor contract?

Yes, except the two cases where no notice is required under Article 36(3) of the Labor Code 2019: the employee fails to return to work after the suspension period (point d) and the employee voluntarily quits without justifiable reason for at least 05 consecutive working days (point e). All other cases require at least 45 days, 30 days, or 03 working days' notice depending on the labor contract type. Note: this notice regime applies only to the employer's unilateral termination path under Article 36; other termination forms (mutual agreement, contract expiry, dismissal) follow their own rules.

What compensation does an employee get for unlawful unilateral termination?

Under Article 41 of the Labor Code 2019, the employer must re-employ the employee under the signed contract, pay wages and contribute to social insurance, health insurance and unemployment insurance for the days the employee was not allowed to work, plus at least 02 months' wages. A breach of the notice period adds payment equal to wages for the days without notice.

Does a mutual termination agreement require severance allowance?

Yes, if the employee has regularly worked for at least 12 months. Mutual termination falls under Article 34(3) and is listed among the cases entitled to severance allowance under Article 46(1) of the Labor Code 2019. The rate is half a month's wage per working year, based on the average wage of the 06 consecutive months under the labor contract. Exceptions: the employee qualifies for retirement pension under social insurance law, or voluntarily quit for at least 05 consecutive working days without justifiable reason.

Is an employee who quits for 05 consecutive days entitled to severance allowance?

No. Article 46(1) of the Labor Code 2019 excludes termination where the employee voluntarily quits without justifiable reason for at least 05 consecutive working days — the case under Article 36(1)(e). This is also one of the two cases where the employer need not give advance notice for unilateral termination.

Can a terminated employee sue directly in court?

Yes. Under Article 188(1) of the Labor Code 2019, disputes over dismissal discipline, unilateral termination, damages and allowances upon labor contract termination, and social insurance disputes do not require conciliation by a labor mediator. The employee may petition the court directly.

References

• Labor Code No. 45/2019/QH14 dated 20/11/2019, effective 01/01/2021.
• Decree No. 145/2020/ND-CP dated 14/12/2020 guiding the Labor Code on working conditions and labor relations, effective 01/02/2021.
• Decree No. 283/2026/ND-CP on administrative sanctions in labor, social insurance and overseas Vietnamese workers, effective 10/9/2026 (replacing Decree 12/2022/ND-CP).
• Social Insurance Law 2024, effective 01/7/2025.