 |
| A foreign engineer and his local colleagues at the shipyard of Ha Long Shipbuilding Company, Quang Ninh province__Photo: Lam Khanh/VNA |
My company signs labor contracts with a number of foreign employees. When terminating labor contracts signed with foreign employees, do I have to pay severance allowance to them and what are the conditions for foreign workers to enjoy severance allowance?
Severance allowance is a type of allowance to be paid by employers to employees upon termination of labor contracts. According to Article 46 of the 2019 Labor Code, an employer must pay severance allowance to an employee who has worked for it/him/her for full 12 months or longer in one of the following cases, regardless of the employee’s nationality:
(i) The labor contract signed with the employee expires, unless the employee is a member of the leadership of the employees’ representative organization at the company whose labor contract expires while the employee is holding office; in this case, the labor contract signed with this employee must be extended until the end of the employee’s term of office (under Article 177.4 of the 2019 Labor Code);
(ii) The employee has completed the job(s) stated in the contract;
(iii) The two parties, the employer and employee, agree to terminate the contract;
(iv) The employee is sentenced to imprisonment and is not entitled to suspended sentence, or is not entitled to release as provided by law, is sentenced to death, or is prohibited from performing the job(s) stated in the contract under a court’s legally effective judgment or ruling;
(v) The employer/employee dies or is declared by the court to have lost civil act capacity, or be missing or dead;
(vi) The employer, that is an organization, terminates operation, or has no at-law representative or no person authorized to exercise the rights and perform the obligations of the at-law representative as notified by the specialized agency in charge of business registration under the provincial-level People’s Committee; and,
(vii) Either of the parties, the employer or employee, unilaterally terminates the contract in accordance with law.
Please be aware that, according to Article 8.6 of Decree 145 issued in 2020 (Decree 145), funds for payment of severance allowance will be accounted as the company’s production and business expenses or operating expenses.- (VLLF)
