Agreement to Terminate an Employment Contract in Vietnam

An agreement to terminate an employment contract in Vietnam is a mutual agreement between the employee and the employer to voluntarily end the employment contract before the agreed-upon expiration date.

What is an Agreement to Terminate an Employment Contract?

An agreement to terminate an employment contract is a mutual agreement between the employee and the employer to voluntarily end the employment contract before the agreed-upon expiration date. This agreement reflects the consent of both parties to terminate the labor relationship without causing any disputes or complaints afterward.

This agreement is only valid when both the employee and the employer agree to terminate the contract. This differs from cases of unilateral termination of the contract.

Regulations on Agreement to Terminate an Employment Contract

The regulations regarding the agreement to terminate an employment contract are specified in Clause 3, Article 34 of the 2019 Labor Code. Below are the key points related to the agreement for terminating an employment contract under current law.

Principles of Agreement to Terminate the Employment Contract

The termination of an employment contract through an agreement must be based on the principle of voluntary and mutual consent between the employee and the employer. Neither party should be forced or pressured into agreeing to the termination. The terms of the agreement must ensure fairness, transparency, and compliance with current labor laws.

Basic Content of the Agreement to Terminate the Employment Contract

• Termination Date: Both parties must agree on the official date of contract termination.

• Employee Benefits: The agreement must clearly outline the benefits the employee will receive upon termination, including remaining salary, severance pay (if applicable), social insurance, health insurance, and other payments (if any).

• Obligations of the Parties: The agreement should specify the obligations of both the employee and the employer before the contract is terminated, such as handing over tasks, returning property, work tools, related documents, and the commitment not to file complaints after receiving all benefits.

• Commitment Not to File Complaints: The employee agrees not to lodge any complaints or accusations against the employer regarding the termination of the employment contract.

Validity and Form of the Agreement to Terminate the Employment Contract

The agreement to terminate the employment contract must be made in writing, signed by both the employee and the employer. It becomes effective from the time both parties sign it, unless otherwise specified in the agreement regarding the effective date.

Disputes Arising After the Contract Termination

In the event of a dispute arising after the agreement to terminate the employment contract has been signed, the parties may resolve it through mediation, labor arbitration, or by filing a lawsuit in court, as prescribed by law.

Advantages of the Agreement to Terminate an Employment Contract

Minimizing Disputes and Tension

This method allows both parties to end the labor relationship by mutual consent, minimizing the likelihood of disputes, tension, and conflicts that may arise if one party unilaterally terminates the contract.

When both sides agree, the legal risks associated with violating labor laws are significantly reduced. The possibility of litigation or legal disputes is greatly diminished, saving both time and costs for both parties.

The relationship between the employee and the employer often remains positive, even after the employment contract has ended, potentially opening up opportunities for future cooperation.

Ensuring Employee Benefits

In the agreement to terminate the contract, the employee’s benefits (such as salary, severance pay, insurance, etc.) are clearly defined, giving the employee peace of mind regarding what they will receive. The employee can proactively prepare for the termination, organizing personal and financial plans more effectively.

Employees can negotiate for better terms (such as higher severance pay, additional financial support, etc.) during the agreement process.

Facilitating Smooth Handover of Work

The agreement to terminate the contract allows for a smooth handover process, giving the employee time to prepare and transition their work to a replacement, ensuring no disruption to the business operations.

Flexibility and Convenience for Both Parties

The agreement to terminate the contract can be done flexibly according to the specific needs and circumstances of both parties, rather than having to follow the complex legal procedures involved in unilateral termination.

Challenges of the Agreement to Terminate an Employment Contract

In some situations, employees may face difficulties in negotiating favorable terms for themselves, especially if they lack experience or do not receive support from legal advisors or local labor unions.

The process of agreeing to terminate the contract can be time-consuming and require significant effort, particularly if both parties struggle to reach a mutual agreement easily.

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