Dismissal of 01 employee due to economic recession, the employer must notify the Provincial Department of Labor in Vietnam

Dismissal of 01 employee due to economic recession, the employer must notify the Provincial Department of Labor in Vietnam

In judgment No. 21/2023/LD-PT dated November 23, 2023 of People”s Court of Binh Duong Province, Vietnam regarding the dispute over the case of unilateral termination of the labor contract, the plaintiff was eventually fired by the company in 2022 due to economic recession leading to business losses. The plaintiff claimed that the company had not notified the Provincial People”s Committee about the dismissal according to Article 42 of the 2019 Labor Code, but the company had discussed with the competent authority and believed that if only 01 employee was dismissed, it is not necessary for such notice. However, the Binh Duong Court held that the law does not have any provisions exempting the notification obligation, and therefore the termination of the Labor Contract was illegal.

Pursuant to Clause 6, Article 42 of the Vietnam Labor Code 2019, the dismissal of employees in the following cases shall only be implemented after a discussion with the  representative organization of employees and after giving prior notice of 30 days to the People’s Committee of the province and the employees:

a) Changes in the organizational structure, personnel rearrangement;
b) Changes in processes, technology, equipment associated with the employer’s business lines;
c) Changes in products or product structure.
a) Economic crisis or economic depression;
b) Changes in law and state policies upon restructuring of the economy or implementation of international commitments.

Therefore, the dismissal of 01 employee due to one of the above cases, the employer must notify  to the Provincial Department of Labor according to Article 42 of the 2019 Vietnam Labor Code.

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