When a foreign employee has been employed at a company for over two years and the contract expires and is not renewed are they entitled to severance? My company says no and gives the reasoning that there is no unemployment insurance for foreigners and that it is included in our monthly salary. However this is not in the employment contract and there is no mention of contributions or deductions relating to this in the payslips.

Can you please advise on this matter as I believe that the company is required to pay severance as per the Labor Code at 0.5 months salary per 12 months worked.

Answer:

 As regulation in Article 2 Law Code about Subjects of application:

1. The Vietnamese employees, apprentices, interns and other employees specified in this Code.

 2. The employers.

 3. Foreign employees working in Vietnam.

 4. Other individuals, agencies and organizations directly related to the labor relation

Although, Law do not mention about form of employee for every specific regultion, foreign employees are still applied to severance pay as follows: Clause 1 Article 48 Labour Code 2012

When the labor contract terminates as prescribed in Clause 1, 2, 3, 5, 6, 7, 9 and 10 Article 36 of this Code, the employer is responsible to give the severance pay to the regular employees that have been worked for 12 months or more. A half- month salary shall be paid for each working year

Clause 1, 2, 3, 5, 6, 7, 9 and 10 Article 36 of Labour Code includes:

1. The labor contract expires, except for the case prescribed in Clause 6 Article 192 of this Code.

2. The work under the labor contract is done.

3. Both parties agree to terminate the labor contract.

5. The employee is condemned to imprisonment, to death or prohibited from doing the work in the labor contract according to the legal judgment and decision from the Court.

6. The employee dies, is declared dead, missing or incapable of civil acts by the Court.

7. The employer being an individual dies, is declared dead, missing or incapable of civil acts by the Court; the employer not being an individual stops the operation.

9. The employee unilaterally terminates the labor contract as prescribed in Article 37 of this Code.

10. The employer unilaterally terminates the labor contract as prescribed in Article 38 of this Code; the employer dismisses the employee due to changes in the mechanism, technology or for some economic reasons, or merger, separation of enterprises, cooperatives

In conclusion, for your case if you are eligible in Clause 1, 2, 3, 5, 6, 7, 9 and 10 Article 36 of Labour Code, the employer is responsible to give the severance pay to the regular employees that have been worked for 12 months or more. A half- month salary shall be paid for each working year following law provisions .