Allens is a Bronze Sponsor of AusCham. Below, Allens provides important information on “New guidance on restructuring your workforce in Vietnam”, dated 23 April 2015.

The original article can be seen by clicking here.

In brief: Dismissing employees, whether for under-performance or misconduct, has always been a difficult task in Vietnam given the strongly pro-employee labour legislation. However, the Government has recently issued new legislation in an attempt to level the playing field and create a clearer avenue for companies to legally dismiss employees for under-performance. Partner Linh Bui (view CV), Senior Associate Mai Loan Nguyen and Associate Hai Nguyen report.

How does it affect you?

  • Companies can now issue internal rules setting out performance criteria that can be used to assess an employee’s performance and form the basis of a decision to terminate a labour contract
  • The new decree sets out specific circumstances in which companies have the right to retrench employees in the case of ‘restructuring’, or for ‘economic reasons’
  • It is now clear that in case of retrenchment, only the retrenchment allowance needs to be paid, and severance allowance is not additionally payable
  • Employees can now unilaterally terminate their contracts for ‘personal or family difficulties’ only in limited prescribed circumstances

* To view the original article which has full details, click here.