The employer can lawfully unilaterally terminate labour contract with the employee by one of the following circumstance:

  • The employee repeatedly fails to perform the work in accordance with the term of the contract;
  • The employee is disciplined in the form of dismissal;
  • Where the employee suffers illness and remain unable to work after having received treatment for a period of 12 consecutive months in the case of indefinite term labour contract, or 06 consecutive months in the case of a definite term contract with duration of 12 months to 36 months, or more than half the duration of the contract in the case of a seasonal labour contract or a labour contract for a specific job. Upon the recovery of the employee, the employer shall consider the continuation of the labour contracts;
  • The employer is force to reduce production and employment after trying all measures to recover from a natural disaster, a fire, or another event of force majeure as stipulated by the Government; or
  • The enterprise, body, or organization cease operation.
  • From 1 May 2013, a new circumstance is added i.e. the employee is absent from the working place after expiry of the duration of temporary cease of implementation of labour contract.

The employer must give a notice in advance of at least 45 working days in case of indefinite term labour contracts or at least 30 working days in case of definite term labour contract with a duration of from full 12 to thirty 06 months or at least three days in the case of a seasonal labour contract or a labour contract for a specific job with a duration of less than 12 months.

Where the employer decides to terminate the employee’s labour contract according to the circumstance as listed at Items from (i) to (iii) above, it must reach a written agreement of the executive committee of the Grassroots Trade Union (from 1 May 2013, if any enterprise without grassroots trade union, the trade union of higher level managing such grassroots trade union will take charge of this obligation). Then the decision on unilateral termination of labour contract of the employee must be submitted to the local labour management authorities for their review. After 30 days from the date of submission of notification to the local labour management authorities in charge, the employer shall have the right to unilaterally terminate the labour contract with the employee and be responsible for that decision.