I. Can foreign workers be paid severance allowance when they quit their jobs?
According to the provisions of Article 46 of the Labor Code 2019, the conditions for receiving severance allowance are as follows:
1. In case an employment contract is terminated as prescribed in Clauses 1, 2, 3, 4, 6, 7, 9 and 10, Article 34 of this Code, the employer is responsible for paying severance allowance to the employee who has worked on a regular basis for a period of at least 12 months. Each year of work will be worth half a month’s salary, except for the cases in which the employee is entitled to receive retirement pension as prescribed by social insurance laws, and the cases specified in Point e Clause 1 Article 36 of this Labor Code.
2. The qualified period of work as the basis for calculation of severance allowance shall be the total period during which the employee actually worked for the employer minus the period over which the employee participated in the unemployment insurance in accordance with unemployment insurance laws and the period for which severance allowance or redundancy allowance has been paid by the employer.
3. The salary as the basis for calculation of severance allowance shall be the average salary of the last 06 months under the employment contract before the termination.
4. The Government shall elaborate this Article.
Also according to the provisions of Article 2 of the 2019 Labor Code, the subjects applied by this Code include:
1. Employees, trainees, apprentices and other workers without labor relations.
3. Foreign employees who work in Vietnam.
4. Other organizations and individuals directly related to labor relations.
According to the above regulations, foreign workers working in Vietnam are also subject to the application of the 2019 Labor Code. Therefore, foreign workers working in Vietnam will be entitled to severance allowance if they meet the requirements meet the following conditions:
– Have worked regularly for full 12 months or more for the employer:
– Termination of the contract by the causes in Clauses 1, 2, 3, 4, 6, 7, 9 and 10, Article 34 of the Labor Code 2019
+ Due to the expiration of the labor contract.
Completed the work according to the labor contract.
+ Both parties agree to terminate the labor contract.
+ The employee is sentenced to prison (no suspended sentence/not released), death penalty, prohibited from doing the job specified in the contract.
+ The employee dies; has been declared by the Court to have lost his civil act capacity, is missing or has died.
+ The employer being an individual dies; has been declared by the Court to have lost his civil act capacity, is missing or has died.
+ The employee unilaterally terminates the labor contract according to the provisions of Article 35 of this Code.
+ The employer unilaterally terminates the labor contract according to the provisions of Article 36 of this Code.
II. How is the employer who does not pay severance pay to foreigners?
According to the provisions of Clause 1, Article 48 of the Labor Code 2019, it is the responsibility of the employer to fully pay all amounts related to the employee’s interests, including severance pay.
Within 14 working days following the termination of an employment contract, both parties shall settle all payments in respect of the rights and interests of each party. In the following cases, such period may be extended, but shall not exceed 30 days:
a) Shutdown of business operation of the employer that is not a natural person;
b) Changes in the organizational structure, technology or changes due to economic reasons;
c) Full division, partial division, consolidation, merger of the enterprise; sale, lease, conversion of the enterprise; transfer of the right to ownership or right to enjoyment of assets of the enterprise or cooperative;
d) Natural disasters, fire, hostility or major epidemics.
If the employer fails to pay or does not fully pay the severance allowance to the foreign worker when they leave the job, the employer will be sanctioned according to the provisions of Clause 2, Article 12 of Decree 12/2022/ ND-CP.
The fine level for the employer is based on the number of employees being violated:
– From VND 1,000,000 to VND 2,000,000 for violations from 01 to 10 employees;
– From VND 2,000,000 to VND 5,000,000 for violations of between 11 and 50 employees;
– From 5,000,000 VND to 10,000,000 VND for violations of between 51 and 100 employees;
– From 10,000,000 VND to 15,000,000 VND for violations of between 101 and 300 employees;
– From 15,000,000 VND to 20,000,000 VND for violations of 301 employees or more.
The employer is also required to pay the full severance allowance plus interest on the unpaid amount at the highest interest rate on demand deposits of state-owned commercial banks announced at the time of settlement punish.
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