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When unilaterally terminating the labour contract illegally, can the employee receive a severance allowance?

  • Perform: Le Thao (Translator: Linh Chi)
  • 07/01/2023

Question: My company has several unilateral workers who terminate their employment contracts before the deadline without notice, all of which are cases where workers unilaterally terminate their illegal employment contracts. May I ask if the company has to pay severance pay to the aforementioned employees in these cases? Looking forward to counselling, thank you!

Article 40 of the Labor Code 2019 stipulates the obligations of employees when unilaterally terminating a labour contract illegally as follows:

“1. ​Not entitled to receive a severance allowance.

2. ​Required to compensate the employer with half of the monthly wage stated in the employment contract and a monetary amount corresponding to the worker’s wage for the number of days during which the required notice was not given.

3. ​Required to reimburse the employer for training costs as stipulated in Article 62 of this Code.”

Thus, employees who unilaterally terminate the labour contract illegally, the employee will not be entitled to a severance allowance. Therefore, for these cases, the company does not have to pay severance pay to employees.

In addition, according to the above provisions, when the employee unilaterally terminates the labour contract illegally, the employee is obliged to compensate the employer for half a month's salary according to the labour contract and an amount corresponding to the salary under the labour contract in unannounced days and must reimburse the employer for training costs as prescribed.