VIETNAM Law and Practice Contributed by: Ngoc Luong Trinh, Tung Nguyen, Hanh Vo, Esko Cate, Nguyen Dang, Khanh Le, Hoang Nguyen and Truc Ta, VILAF
Unilateral Termination by the Employee An employee may unilaterally terminate the employ - ment contract by giving a prior notice of at least: • 45 days (for indefinite-term contracts), • 30 days (for fixed-term contracts of 12–36 months), • 3 working days (for fixed-term contracts under 12 months). In certain sectors (eg, aviation personnel, enterprise management personnel and seafarers), longer notice periods may apply. An employee may also terminate the employment contract without prior notice where: • the employee is not given the work, workplace or working conditions as agreed; • the employee fails to pay wages in full or on time; • the employer abuses, harasses or forces the employee to work against their will; • the employee is sexually harassed in the work - place; • the fmeale employee is pregnant and has to stop working; • the employee reaches the age of retirement; and • the employer provides false information when signing the contract (eg, work, workplace, working hours, remuneration or insurance). Monetary Entitlements Upon Termination of Employment Upon terminating or otherwise ending an employ - ment contract, the employer must pay the employee all entitlements, including salary and other contractual benefits, up to the date of termination. Depending on the reason for terminating or ending the contract, the employer may also have to pay a severance allowance or a job-loss allowance. 4.5 Employee Representations Under the Labour Code, an employee may join a “grassroot-level employees’ representative organisa - tion” (“representative organisation” for short), which is voluntarily established by the employees within an enterprise to protect their rights and interests. Such organisations may be either a Trade Union at the enterprise level, which is a part of the Vietnam
Trade Union or an employees’ organisation within the enterprise not belonging to the Vietnam Trade Union. In practice, the most common type of representative organisation is the Trade Union at the enterprise level. At law, an employer must engage in workplace dia - logue with employees (through their representatives) or the grassroots-level employees’ representative organisation on certain workplace topics at least annually, in accordance with the workplace democ - racy rules. In addition, an employer must consult and/ or have the grassroot-level employees’ representa - tive organisations (if established) participate in certain matters, including: • adoption of the internal rules on assessment of performance standards for employees; • retrenchment due to technological or organisation - al changes or economic reasons; • adoption of the labour usage plan in the case of retrenchment/ collective redundancies; • establishment of pay scales, payroll and productiv - ity norms; • establishment of a reward scheme; • adoption or amendment of internal labour rules; and • conducting disciplinary proceedings. Where no representative organisation has been estab - lished at the enterprise level, employers commonly, as a matter of prudence, involve the higher-level Trade Union for matters that would otherwise require such organisation’s participation, although this can be time- consuming.
5. Tax Law 5.1 Taxes Applicable to Employees/ Employers
Under Vietnamese law, employees are subject to PIT on employment income if they are either tax residents in Vietnam or non-residents deriving Vietnam-sourced income. An individual is generally regarded as a tax resident if he/she is present in Vietnam for 183 days or more within a calendar year or 12 consecutive months or have a permanent residence in Vietnam. Tax resi - dents are taxed at progressive rates from 5% to 35%,
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