The Labour Code 2012 does not expressly require an employer, who intends to terminate an employment contract on the grounds of companies restructuring, change of technology or economic reasons (Company Restructuring), to give advance notice to the relevant employees.

The advance notice requirement is provided in Article 38.2 of the Labour Code 2012. Article 38.2 follows Article 38.1 which only covers termination of an employment contract on other grounds such as poor performance, prolonged illness, or force majuere events. Therefore, one can argue that Article 38.2 only applies to the scenarios contemplated under Article 38.1 of the Labour Code 2012 but not a Company Restructuring.

On the other hand, the above view may be not reasonable since:

Although in terms of presentation, Article 38.2 follows Article 38.1, the wording of Article 38.2 can cover any termination of an employment contract by the employer including termination on the ground of Company Restructuring.
An advance notice period may give the terminated employee an opportunity to (1) look for a new job before leaving his/her current job; or (2) make a complaint against the employer’s decision in case of wrongful termination. Therefore, there is no reason why a termination due to Company Restructuring should be treated differently from other cases.
This interpretation has been adopted by the courts in certain cases.

This post is contributed in parts by Nguyen Hoang Duong, a trainee at Venture North Law Limited.

Vietnam Business Law