Ending Employment in Vietnam: Termination, Notice and Severance Considerations

Ending an employment relationship in Vietnam is rarely a matter of issuing a short notice and running one final payroll. The legal route, the employee’s contract and status, the evidence on file, and the reason for exit can change the sequence. For overseas employers, the practical discipline is to classify the route first, then organise notice, consultation, final pay and records around that route.

This article is general information for business planning, not legal, tax, immigration or personal advice. Employment exits are fact-specific; obtain Vietnam-qualified HR and legal review before taking action, particularly where there is a dispute, protected status, a workforce reduction or a foreign employee.

Direct answer: Vietnam employee termination and severance should be assessed by statutory route, not by a generic ‘termination’ label. Vietnam’s Labour Code distinguishes contract-ending events, employee resignation, lawful employer unilateral termination, disciplinary dismissal, redundancy and foreign work-permit expiry. Notice, documentation, final settlement and allowance outcomes can differ; final rights are generally settled within 14 working days, subject to limited statutory extensions. 1

1. Start with the legal route, not an exit letter

The first decision is not how to word the notice. It is which legal event actually ends the contract. Article 34 of the Labour Code lists a range of contract-termination circumstances, including expiry, completed work, mutual agreement, disciplinary dismissal, lawful unilateral termination by either party, redundancy-related termination and expiry of a foreign employee’s work permit. These are not interchangeable labels; they carry different prerequisites, evidence and settlement consequences. 12

Map the event to the correct pathway

A fixed-term contract reaching its end date may be a contract-expiry case, provided the factual and statutory conditions are met. A consensual separation is a mutual-agreement case, but the agreement should not be treated as a shortcut around mandatory rights or a cure for an earlier process defect. An employee who resigns exercises a separate unilateral right, ordinarily with notice unless a stated exception applies. The company’s preferred outcome does not decide the route on its own. 1

An employer-led exit demands particular care. Article 36 contains defined situations in which an employer may unilaterally terminate, such as repeated failure to meet properly established assessment criteria, extended illness or accident treatment in the stated periods, particular force-majeure or authority-driven circumstances after possibilities are exhausted, qualifying absence, retirement, sustained unjustified absence, or materially untruthful recruitment information. The facts must fit the invoked ground. A global policy or a manager’s conclusion that an employee is “not a fit” is not itself a Vietnam statutory ground. 13

Disciplinary dismissal is also distinct from ordinary employer unilateral termination. It sits within the Labour Code’s labour-discipline framework and should not be repackaged as a performance termination merely because evidence is incomplete. Likewise, a business decision affecting multiple roles may call for the structure, technology or economic-reason framework rather than a series of individual notices. Classifying the case early makes it easier to identify the right decision maker, records and consultations. 14

Figure 2. Termination-route screening tool. Source: Labour Code 2019, Articles 34–48; Decree 219/2025 (accessed 10 September 2026). Original visual created from cited legal sources.

VietPard editorial analysis based on the cited sources: treat this screen as a triage tool, not a dismissal playbook. If the case touches protected status, collective impact, discipline or immigration status, pause before communications and seek Vietnamese review.

2. Notice, evidence and protected status determine the timing

Notice is route-specific. For an employer’s unilateral termination in the Article 36 situations where advance notice is required, the general framework is at least 45 days for an indefinite-term contract, 30 days for a fixed-term contract from 12 to 36 months, and 3 working days for a contract below 12 months and for the specified illness-treatment case. Article 36 also identifies situations where advance notice is not required, and the Government may set rules for certain fields and jobs. 14

Decision aid 1. General employer unilateral-termination notice framework. Source: Labour Code 2019, Article 36 (accessed 10 September 2026). Table is a screening aid, not a universal notice rule.

Build the evidence before relying on a performance ground

For repeated failure to perform work, Article 36 refers to employer-established criteria for assessing fulfilment of duties and requires consideration of the employee representative organisation’s views, if any, when those criteria are established. In practice, the defensible question is not whether the manager is dissatisfied. It is whether the company can show valid criteria, how they were communicated and applied, the employee’s assessed results, and why the statutory threshold is met. Retrospective criteria or uneven assessment creates avoidable risk. 14

The same discipline applies to an illness or accident case. The Code specifies treatment periods that vary with contract type. Employers should check medical-status evidence, contract term, the precise Article 36 condition and the employee’s actual ability to work rather than treating any absence as a termination trigger. Where recovery occurs, the Code says the employer may consider a new contract, which reinforces the need for a fact-based record rather than an automatic outcome. 1

Check restrictions before an employer acts

Article 37 prohibits an employer from unilaterally terminating in certain protected circumstances: while an employee is undergoing treatment or nursing for illness, work accident or occupational disease under a competent health institution’s decision (subject to the Article 36 illness exception); during annual, personal or employer-approved leave; and during pregnancy, maternity leave or while raising a child under 12 months. This is a statutory screen, not an HR courtesy. The full facts, including the exception and any other legal route, need review before action. 12

For either party, a written withdrawal of unilateral termination before the notice period ends requires the other party’s agreement. Keep the notice, any withdrawal and acceptance in the case file. Clear records reduce the risk that a changed plan is later described as an informal waiver, a new dismissal or an unapproved extension of employment. 1

3. Separate severance allowance from redundancy allowance

Severance and redundancy are different statutory allowances. Neither is a standard “one month per year” payment that applies to every departure. The correct allowance follows the confirmed route, qualifying service, statutory exclusions and wage basis. A calculation should therefore be the output of the route analysis—not the reason chosen for the route. 1

Severance allowance: a qualifying individual contract ending

Article 46 provides for severance allowance for an employee who has worked regularly for at least 12 months when the contract ends through the qualifying Article 34 cases identified in that article, subject to statutory exclusions. The framework is one half of a month’s salary for each qualifying working year. The working period used in the calculation is total actual working time less time of unemployment-insurance participation and time already used to pay severance or redundancy allowance. The salary basis is the average contractual salary of the six months before termination. 12

Those elements make a spreadsheet-only answer unsafe. The employee’s full service history may not equal qualifying working time; an apparently continuous relationship may include periods that must be excluded; and the contractual salary average is not necessarily the same as gross cash paid in the final month. Confirm both historical insurance participation and any earlier allowance settlement before issuing a final figure. 15

Redundancy allowance: a workforce-change consequence

Article 47 addresses employees who have worked regularly for at least 12 months and lose their jobs under the restructuring, technology, economic-reason or certain business-transfer routes. The framework is one month’s salary per qualifying working year, with a statutory minimum of two months’ salary. Article 42 connects that payment to a process involving a labour-utilisation plan, discussion with the employee representative organisation where applicable, and prior notice to the provincial People’s Committee and employees when the employer has to dismiss employees in that setting. 12

Figure 3. Severance and redundancy comparison. Source: Labour Code 2019, Articles 42, 46 and 47 (accessed 10 September 2026). Original visual created from cited legal sources.

The calculation concept in Article 47 uses the Article 46 working-period and salary concepts, but the trigger and minimum differ. That is why a redundancy analysis has two tracks: confirm that the organisational or economic facts fit the statutory route, then calculate the allowance from verified employment, insurance and pay records. Calling a reduction “redundancy” in a global restructuring memo does not by itself establish the Vietnamese route. 14

Decision aid 2. Allowance route and calculation framework. Source: Labour Code 2019, Articles 42, 46 and 47 (accessed 10 September 2026).

4. Treat a restructuring as a workforce process, not multiple individual exits

When a change in structure or technology affects employment for a large number of employees, Article 42 requires the employer to develop and implement a labour-utilisation plan under Article 44. The Code identifies examples of structure and technology changes, including organisational structure or personnel rearrangement, process, technology or equipment changes associated with business lines, and changes in products or product structure. Economic reasons include an economic crisis or depression, or changes in law and state policy connected with economic restructuring or international commitments. 12

The law also gives continued employment a place in the sequence. In the Article 42 setting, if new vacancies exist, the employer must give priority to retraining existing employees for continued employment. Only where it cannot create jobs and has to dismiss employees does the redundancy allowance arise. This makes the labour-utilisation plan more than a communications document; it is part of the legal route analysis. 1

Before dismissals in the Article 42 case, the employer must discuss with the representative organisation of employees, if any, and give 30 days’ prior notice to the provincial People’s Committee and the employees. Plan scope, representation, timing and overlap with a merger, sale or transfer need fact-specific review. Do not split a coordinated workforce measure into serial individual exits to avoid statutory process. 14

Business transfers and reorganisations can require the same discipline. Article 43 addresses full or partial division, consolidation, merger, sale, lease, conversion, or transfer of asset ownership or use where employment of a large number of employees is affected. The current and next employer must implement the adopted labour-utilisation plan, and laid-off employees receive redundancy allowance under Article 47. Contract, transaction and employment-law advice should be coordinated before the deal timetable drives employee communications. 12

5. Close payroll, leave, insurance and documents in one controlled workstream

Final settlement is a statutory workstream, not an afterthought. Article 48 states that, within 14 working days after termination, the parties must settle all rights and interests related to the employment contract; the period may be extended but must not exceed 30 days in the specific cases listed in the Code. The article also sets a payment order where the employer terminates operations, is dissolved or bankrupt. Work back from the effective date rather than relying on the ordinary monthly payroll cycle. 12

The final-pay review should capture earned contractual salary through the termination date and any approved pay elements that remain due. It should separately check approved overtime or night-work inputs, authorised deductions, expense treatment where relevant, and any statutory allowance analysis. Article 95 requires each salary payment to include a note showing salary, overtime pay, night-work pay and deductions, if any. The final pay record should keep those items intelligible rather than bury them in one unexplained figure. 14

Unused annual leave can also be an exit item. Article 113 establishes annual paid leave entitlements and Article 114 provides that an employee who has not taken or not fully taken annual leave because of termination or job loss is paid for the untaken days. Use a clean leave ledger, including pro-rating where relevant; a global carryover policy may not answer the statutory question. 12

Article 48 requires the employer to complete procedures for verifying duration of social-insurance and unemployment-insurance participation and to return documents and original copies of other employee documents, if any. On request, it must provide copies of documents relevant to the employee’s work, with the employer bearing the copying and sending cost. The current Social Insurance Law 2024 and its compulsory-insurance implementation decree have applied since 1 July 2025, so payroll and HR should use current administrative guidance for the insurance handover rather than rely on an old checklist. 167

Figure 4. Exit settlement and records timeline. Source: Labour Code 2019, Articles 48 and 113; Social Insurance Law 2024 and Decree 158/2025 (accessed 10 September 2026). Original visual created from cited legal sources.

A foreign employee adds a work-authorisation check. Article 34 includes expiry of a foreign employee’s work permit as a contract-termination case. Decree 219/2025/ND-CP, effective 7 August 2025, is the current foreign-worker regulation identified in the official legal database. Confirm the current authorisation type, expiry, renewal or exemption position and the contractual facts before deciding either the employment outcome or any immigration communication. A work-authorisation issue should not be handled as a routine payroll exit. 18

Build an exit case file that joins the legal and payroll evidence

A well-ordered file makes the final review more reliable and helps different teams work from the same facts. It should include the contract and amendments, the route analysis, decision authority, notices and delivery evidence, the relevant performance, attendance, medical or restructuring records, payroll workpapers, leave balance, insurance verification and document-return record. Limit access to people with a genuine need to know and apply current privacy and retention requirements; this article does not prescribe a retention period. 16

Figure 5. Offboarding case-file workflow. Source: Labour Code 2019, Articles 36–48; Social Insurance Law 2024; Decree 158/2025 (accessed 10 September 2026). Original visual created from cited legal sources.

What this means for an overseas HR or country manager

For an overseas HR or country manager, the operational rule is simple: appoint a local case owner before a termination decision becomes a manager conversation. That owner should assemble the employment record, map the reason to the route, flag protected status and foreign-worker issues, and coordinate an independently checked final-pay workbook. The board or regional leadership can decide the business objective, but the local employment process still needs to match Vietnamese law. 14

Use a small approval gate before the notice is released. It should ask: Who is the legal employer? What contract and route apply? What evidence supports the route? Does a protected situation or representative-organisation discussion apply? Does the case have a collective impact? What payments, leave and insurance records must be finalised? Who owns employee communication and system access? It avoids a preventable mismatch between a commercial deadline and a legally coherent process.

For organisations testing Vietnam without a local entity, the contractual employer and the operating business need especially clear roles. A staff-leasing or secondment arrangement should be reviewed against its governing employment documents and the actual allocation of employer responsibilities; the operating manager should not assume that its instructions can substitute for the legal employer’s route analysis. VietPard’s staff-leasing page describes local employment administration as part of its service positioning, but statutory claims in this article are based on the primary sources cited above. 101

PRACTICAL EXIT CHECKLIST; Confirm the legal employer, the live contract and the proposed effective date.; Map the event to Article 34 or the relevant Article 36, 42, 43 or disciplinary route; record the reasoning and authority.; Screen for notice, protected status, employee representation, collective impact, foreign work authorisation and any required specialist review. 18; Reconcile final salary, approved time data, unused leave, allowance inputs, insurance participation and requested documents before the settlement deadline. 1

Common mistakes to avoid

Using “at will” language or a global termination template. Vietnam’s statutory routes and protections need to drive the process, not a foreign parent’s standard form. 1

Choosing an allowance formula before confirming the legal route. Severance and redundancy differ in triggers, calculations and process requirements. 1

Treating a notice period as universal. Article 36 has route-specific periods, no-notice cases and special-field qualifications. 1

Relying on an undocumented performance concern. The Article 36 performance ground turns on established assessment criteria and repeated failure, not an informal dissatisfaction narrative. 1

Ignoring annual-leave, insurance and document-return tasks because salary has been paid. Article 48 and Article 114 create separate exit controls. 1

Assuming an expired work permit is just an immigration matter. It is listed as a contract-termination event, and the authorisation position should be checked under current foreign-worker rules. 18

When managed employment support may help

Where a company is using a managed employment model while assessing Vietnam, it still benefits from a clear division between operating business, legal employer and worker. If you need to discuss staff leasing or secondment arrangements and the operational hand-offs for employment records, payroll and lifecycle administration, speak with VietPard about staff leasing in Vietnam. 10

Frequently asked questions

How much notice is required to terminate an employee in Vietnam?

For an employer’s unilateral termination where Article 36 requires advance notice, the general framework is at least 45 days for an indefinite-term contract, 30 days for a 12–36 month fixed-term contract and 3 working days for a contract under 12 months and the specified illness-treatment case. Article 36 also has stated no-notice cases and special-field rules, so the reason and contract must be checked before setting a date. 1

What is severance pay in Vietnam?

Article 46 provides a severance-allowance framework for qualifying employees who have worked regularly for at least 12 months and whose contracts end through the specified qualifying cases. The framework is half a month’s salary for each qualifying working year. Qualifying working time excludes unemployment-insurance participation and previous severance or redundancy-payment periods; the wage basis is the average contractual salary of the six months before termination. 1

What is the difference between severance allowance and redundancy allowance?

Severance allowance is an Article 46 framework for qualifying individual contract-ending cases. Redundancy allowance concerns job loss through the Article 42–43 workforce-change routes. Its framework is one month’s salary for each qualifying working year, with a statutory minimum of two months’ salary. The process, trigger and calculation controls differ, so the terms should not be used interchangeably. 12

When must final salary and exit payments be made?

Article 48 provides a general period of 14 working days after termination for settlement of rights and interests related to the contract. It permits an extension, not exceeding 30 days, only in the cases specified in the Code. The final review should also include unused-leave pay where applicable, insurance-participation verification and requested work documents. 1

Can an employer terminate an employee during maternity leave?

Article 37 restricts employer unilateral termination when the employee is pregnant, on maternity leave or raising a child under 12 months. It also identifies treatment and leave protections, subject to the stated statutory exception. The correct route and full facts matter, so this is a situation for case-specific Vietnamese HR and legal review before any employment communication. 12

What happens when a foreign employee’s work permit expires?

Expiry of a foreign employee’s work permit is listed in Article 34 as a contract-termination circumstance. Before acting, confirm the worker’s current authorisation type, relevant expiry or renewal facts and the current foreign-worker rules. Decree 219/2025/ND-CP has been effective since 7 August 2025, but the appropriate handling depends on the individual’s status and documents. 18

Conclusion: make the legal route the first control

Vietnam employee termination severance decisions are most manageable when the legal route comes first. Confirm the reason and contract status, then test notice, protection, consultation and payment consequences against that route. Keep the final-pay calculation and insurance/document handover in the same controlled case file. For restructurings, foreign-worker cases, disciplinary matters or any uncertainty around statutory entitlement, obtain local professional review before implementation. This is general information, current to the verification date shown above. 18

Sources and Further Reading

Primary legal sources are listed first. Access date: 10 September 2026. The English ASEAN text is used as an editorial aid; the official Vietnamese legal record controls if there is any ambiguity.

1. Government of Vietnam / National Assembly. Labour Code, Law No. 45/2019/QH14. 20 November 2019; effective 1 January 2021. URL: Source link. Accessed 10 September 2026.

1. ASEAN. Labour Code No. 45, Year 2019 (English text). undated English rendering; accessed 10 September 2026. URL: Source link. Accessed 10 September 2026.

1. International Labour Organization. NATLEX record: Labour Code (No. 45/2019/QH14). record accessed 10 September 2026. URL: Source link. Accessed 10 September 2026.

1. Government of Vietnam. Decree No. 145/2020/ND-CP on implementation of Labour Code provisions on working conditions and labour relations. 14 December 2020; effective 1 February 2021. URL: Source link. Accessed 10 September 2026.

1. Government of Vietnam / National Assembly. Law No. 74/2025/QH15, Law on Employment. 16 June 2025; effective 1 January 2026. URL: Source link. Accessed 10 September 2026.

1. Government of Vietnam / National Assembly. Law No. 41/2024/QH15, Law on Social Insurance. 29 June 2024; effective 1 July 2025. URL: Source link. Accessed 10 September 2026.

1. Government of Vietnam. Decree No. 158/2025/ND-CP on compulsory social insurance implementation. 25 June 2025; effective 1 July 2025. URL: Source link. Accessed 10 September 2026.

1. Government of Vietnam. Decree No. 219/2025/ND-CP on foreign workers working in Vietnam. 7 August 2025; effective 7 August 2025. URL: Source link. Accessed 10 September 2026.

1. Vietnam Social Security. What are contribution rates for foreign employees and their employers to compulsory insurance funds?. 9 June 2025; accessed 10 September 2026. URL: Source link. Accessed 10 September 2026.

1. VietPard. Staff Leasing & Secondment (PEO). service page accessed 10 September 2026. URL: Source link. Accessed 10 September 2026.