Can Employer Terminate the Labour Contract in Vietnam with Employee Due To Covid 19 Outbreak?

Due to intricate occurrence of Covid 19, many enterprises are forced themselves to reduce the number of employees for maintaining the operation financially. Specifically, the employer has to make difficult decision to terminate the labour contract with the employee. The termination of the labour contract has to be considered carefully because of potential legal risks brought up which dispute lawyers in labour should be consulted before execution. Within this post, we are not trying to resolve all cases but only aiming to brief some matters of concern for preparation.

 

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The employer could refer to the regulation in the Labor Code which allows “an employer may unilaterally terminate a labor contract if as a result of natural disaster, fire or another force majeure event as prescribed by law, the employer, though having applied every remedial measure, has to scale down production and cut jobs. Force majeure in this case is understood as (i) Enemy-inflicates destruction, epidemics (ii) Relocation or narrowing of the production and business sites, at the request of competent State agencies.

In particular, after applying corrective measures, over the time, considering enterprise’s financial potential is insufficient as well as the business production is reduced significantly due to epidemic, the employer may consider unilaterally terminate labor contract with employee. However, employer still have to abide by or ensure the rights to employee regarding the interests which employee is entitle to receive when being unilaterally terminated labor contract includes salary, severance allowance, social insurance, payment for untaken leave days, the tax payment which employer must paid for employee. Besides, employer also is subject to pay a compensation if consented by both sides are employer and employee.

Firstly, employer is obliged to pay salary to employee timely and fully as in the agreed labor contract by both parties;

Secondly, employer is responsible for paying the severance allowance to employee whom has worked regularly for full 12 months or longer at the rate of half of a month’s wage for each working year.

Thirdly, social insurance, employer is responsible for the fulfill payment of social insurance and perform the closing insurance book for employee after terminate the labour contract according to the law of social insurance.

Fourthly, if the income of employee subject to personal income tax, employer must extract from the income of employee to submit the tax to tax agency according to law on personal income tax.

ANT Lawyers – A labour dispute law firm in Vietnam with international standard, local expertise and strong international network. We focus on customers’ needs and provide clients with a high quality legal advice and services. For advice or service request, please contact us via email ant@antlawyers.vn, or call us +84 24 730 86 529.

 

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When a Contract is Invalid Due to Non-compliance With Form in Vietnam?

Generally, contracts for sale and purchase of goods and service contract shall be expressed in verbal or written form or established with specific acts. For types of contract which must be made in writing provided by law, such contract must comply with such form regulation. Particularly, contract for international purchase and sale of goods shall be conducted on the basis of written contracts or other forms of equal legal validity.

 

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There are two cases of non-compliance with form: (i) form of contract is not in accordance with the law and; (ii) contract violates against regulations on notarizing or authorization. It should be noted that the form of contract shall be the conditions for its effectiveness in cases where it is provided by law. The time limit of requiring the court to declare a contract of non-compliance with form in Vietnam invalid is 02 years, from the establishment date of contract. After such time limit, if there is still no request for declaring contract invalid, such contract still remains valid.

When the contract is invalid, the general rule is restoring everything to its original state and returning to each other what have received. The non-compliance with form contract could be valid de facto contract if recognized by the Court’s decision when one party or the parties has fulfill at least two third of the obligation contract. Obligations means work whereby one or more entities must transfer objects, rights, pay money or provide valuable papers, perform or not perform certain work for the interests of one or more other entities. However, one party or the parties fulfilling at least two third of the obligation contract will not naturally make such contract valid unless there is decision of the the Court to recognize such. Specifically, according to request of one party, after fully considering conditions mentioned above, the Court shall make a decision on recognizing the validity of such contract.

It is important for parties to have a proper contract with terms and conditions that provide sufficient details with consideration of the nature of the business transactions and the possible resolution when potential disputes arise.  Further, the law governing the contract and the dispute resolution clause which refers to court or arbitration choice should be as clear as possible to avoid confusion and extended time resolving the arisen disputes.

ANT Lawyers - A Contract dispute law firm in Vietnam with international standard, local expertise and strong international network. We focus on customers’ needs and provide clients with a high quality legal advice and services. For advice or services request, please contact us via email ant@antlawyers.vn, or call us +84 24 730 86 529

 

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What Are Procedures for Postponement at the First Instance Court?

In case that civil lawsuit cannot be mediated or cannot conduct the mediation, the Judge shall hold the meetings for checking the handover, access, disclosure of evidences and mediation. In cases there are many parties in a case and some of them are absent but present parties agree to conduct the meetings and the conduct of the meeting does not affect rights and obligations of absent parties, the Judges shall conduct meeting between present parties. If parties request to postpone the mediation meeting until all parties attend, the Judge shall postpone the meeting. The Judges must notify postponement and re-open of meeting to the parties. The litigation dispute lawyers in Vietnam could be the best advisors to the client to utilize the procedures for the best interests of their client depending on the situation.

 

Procedures for Postponement at the First Instance Court

In the first-instance court hearings, when being summoned duly the the Court for the first time, the parties or their representatives and defense counsels shall be present at the Court hearings. If any of them is absent, the Trial Panel shall postpone the Court hearings, unless such person requests for trial in his/her absence. The Courts must notify the postponement of the Court hearings to the parties, their representatives and defense counsels. When being summoned duly for the second time, parties or their representatives and defense counsels shall be present at the Court hearings unless they request for trials in their absence. If the absence is caused by a force majeure event or an objective obstacle, the Court may postpone the Court hearings, otherwise the Court shall handle as follows: (i) The absence of plaintiff without his/her representative shall be considered giving up the lawsuit initiation, thus the Court shall issue a decision to terminate the case resolution for his/her request for lawsuit initiation, unless such plaintiff requests for trials in their absence. The plaintiff may re-initiate lawsuits according to law provisions; (ii) If neither the defendant without counter-claims or a person with relevant interests and duties (relevant person) without independent claims nor his/her representative participates in the Court hearings, the Court shall conduct trial in their absence; (iii) If neither the defendant with counter-claims nor his/her representative participates in the Court hearings, such defendant shall be considered giving up the counter claims, thus the Court shall issue a decision to terminate the resolution for his/her counter claims, unless such defendant requests for trial in his/her absence. The defendant may re-initiate lawsuits for his/her counter-claims according to law provisions; (iv) If neither relevant person with independent claims nor his/her representative participates in the Court hearings, such person shall be considered giving up the independent claims, thus the Court shall issue a decision to terminate the resolution for his/her independent claims, unless such person requests for trial in his/her absence. Such person may re-initiate lawsuits for his/her independent claims according to law provisions; (v) If the defense counsels of the parties is absent, the Court shall conduct trial in their absence.

When the witnesses are absent, the Trial Panels shall decide to conduct trial or to postpone the court. The Trial Panels shall still conduct trial if the witnesses are absent but have earlier given their testimonies in person or sent their testimonies to courts. The presiding Judges shall make such testimonies public. The Trial Panels shall decide to postpone the Court hearings if the absence of the witnesses at Court creates difficulties or affects the objective and comprehensive resolution of the cases.

If the expert-witnesses are absent, the Trial Panels shall decide to conduct trial or to postpone the court. If the interpreters are absent without substitutes, the Trial Panels shall decide to postpone the Court hearings. If expert-witnesses or interpreters must be replaced, the Judges, the Trial panels or the Civil matter-resolving council shall issue decisions to postpone the Court hearings.

When any procedure participants are absent from Court hearings and it does not fall into the cases which the Courts must postpone the Court hearings, the presiding Judges must ask if there is any one requesting to postpone the Court hearings. If there is, the Trial Panels shall consider and decide to accept or not accept such request. In case of non-acceptance, the reasons must be clearly stated.

In addition to absence and change of procedure participants, the change of procedure-conducting person may make the Court hearings be postponed. Firstly, in case of change of the Judge, People’s Jurors, Ombudspersons, Court clerks, procurators, the Trial Panels shall issue decisions to postpone the Court hearings.

Decision on postponing the Court hearings in above circumstances is made by Trial Panels and the time limit for postponing shall not exceed 01 month or not exceed 15 days, applicable to Court carried out under simplified procedure, from the day on which the decision to postpone the Court session is issued.

Having said that, the client could rely on the litigation dispute lawyers in Vietnam for the solution in each case to protect the best interests if postponement procedures of the first instance trial could be applied.

We are a law firm in Vietnam with international standard, local expertise and strong international network. We focus on customers’ needs and provide clients with a high quality legal advice and services. For advice or services request, please contact us via email ant@antlawyers.vn, or call us +84 24 730 86 529

 

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