The employer's obligation to terminate the employment contract in the situation of Covid-19 epidemic
Ask:
DTD International Law Firm let me ask: I am currently a director of a restaurant services company. The Covid-19 epidemic has had a great influence on the general situation of the economy today and our company is no exception. The business of our company has been delayed for a long time, without any profit or even a loss. In order to maintain the Company's operations during this period, I would like to make a staff reduction - terminate labor contracts with some employees and leave only key employees to minimize financial payments. However, I would like to know for sure whether the law allows businesses to dismiss their employees in this case, if so, what are our obligations to our employees? Thank you!
Answer:
Hello, thank you for trusting and sending your request for legal advice to DTD International Law Firm. The content of your question has been researched and advised by our team of lawyers as follows:
*Legal grounds:
+ Labor Code 2012.
+ Decree No. 05/2015 / ND-CP.
+ Decree 148/2018 / ND-CP on amending to the Government's Decree No. 05/2015 / ND-CP dated January 12, 2015 on elaboration of some contents of the Labor Code.
Covid - 19 now has been considered a "pandemic" and very spread out hundreds of countries around the world as announced by the World Health Organization (WHO). Therefore, under the provisions of Clause 2, Article 12 of Decree No. 05/2015 / ND-CP, your company has the right to unilaterally terminate the labor contract when there is a force majeure reason in one of the following cases: “Due to enemy-inflicted destruction or epidemic; Relocation or narrowing of production and business locations at the request of competent state agencies ”. At the same time, the Company had to "find all measures to overcome the situation of the Company but still forced to shrink production and reduce workplaces" (Point c, Clause 1, Article 38 of the Labor Code) before making a decision. to terminate the contract with the employee.
Your company must perform the following obligations to employees upon termination of labor contracts:
+ Notify the employee under the provisions of Clause 2, Article 38 of the Labor Code ("At least 45 days for indefinite-term labor contracts; At least 30 days for definite labor contracts; ; At least 03 working days for cases specified at Point b, Clause 1 of this Article and for seasonal labor contracts or for a certain job with a term of less than 12 months ").
+ Payment of severance allowances to employees (Article 48 Labor Code: “In case a labor contract terminates in accordance with Clause 1, 2, 3, 5, 6, 7, 9 or 10, Article 36 of this Code, the employer shall pay a severance allowance to the employee who has worked regularly for full 12 months or longer at the rate of half of a month’s wage for each working year.”
Note: “Working duration as the basis for calculation of severance pay or redundancy pay is the total period of time the employee has worked for the employer minus (-) the unemployment insurance period and the period over which severance pay or redundancy pay is paid by the employer (if any).” (More specifically specified in Clause 5, Article 1 of Decree 148/2018 / ND-CP).
+ Within 07 working days from the date of employment contract termination, the employer and employee shall settle each other benefits. This time limit may be extended to up to 30 days in special cases. (Clause 8, Article 1 of Decree 148/2018 / ND-CP).
In addition, on April 10, 2010, the Government issued Resolution No. 42 / NQ-CP on measures to support people in difficulty in the Covid-19 pandemic. The main content of the Resolution is to provide support levels for those who are struggling in the epidemic situation, including businesses and workers. In particular, there are policies to support employees who have terminated labor contracts but are not eligible for unemployment benefits. These people will be entitled to VND 1 million / month depending on the situation of the epidemic. Therefore, DTD also recommends that your Company consider additional allowances for employees and guide them to carry out the procedures to receive Government benefits when terminating the contract. Because, they are one of the people hardest affected by Covid-19, should get help at this time.
