How to terminate an employment contract in Vietnam, ground by ground

To terminate an employment contract in Vietnam, the employer needs a statutory ground: Vietnam has no at-will termination. Article 34 of the Labour Code (Law No. 45/2019/QH14) lists 13 grounds, and three groups matter most in practice. A contract that expires, or one ended by mutual agreement, needs no notice period. An employee who resigns, and an employer that ends the contract on five of the seven grounds in Article 36, must give 45 days, 30 days or 3 working days of notice, depending on the contract type. In most cases the employer must also confirm the termination in writing (Article 45, except Article 34(4) to (8)), pay everything due within 14 working days (Article 48), pay severance allowance (Article 46) or job-loss allowance (Article 47) where the case is covered and the employee has at least 12 months of service, settle social insurance and hand back documents.

Three things changed in 2026. Law No. 74/2025/QH15 on Employment (from 1 January 2026) still excludes unemployment insurance periods from severance. The Labour Code has a consolidated text, 18/VBHN-VPQH of 12 February 2026, which does not change the termination articles. And from 10 September 2026, Decree 283/2026/ND-CP replaced Decree 12/2022 as the penalty decree. Disciplinary dismissal is only summarised here; see our guide to dismissal of employees in Vietnam.

What are the grounds to terminate an employment contract in Vietnam?#

The table matches the 13 grounds in Article 34 with two questions: is a written termination notice required (Article 45, which excludes Article 34(4) to (8)), and is severance payable (Article 46(1) covers only Article 34(1), (2), (3), (4), (6), (7), (9) and (10))?

Art. 34	Ground	Written termination notice (Art. 45)	Allowance
1	Contract expires (except Art. 177(4))	Yes	Severance
2	Work under the contract is completed	Yes	Severance
3	Mutual agreement	Yes	Severance
4	Employee jailed, sentenced to death or barred from the job by a court judgment	No	Severance
5	Foreign employee deported	No	Not covered by Art. 46(1)
6	Employee dies, is declared legally incapacitated or missing	No	Severance
7	Individual employer dies or is missing; non-individual employer ceases operation or has no legal representative	No	Severance
8	Disciplinary dismissal	No	None
9	Employee resigns under Art. 35	Yes	Severance
10	Employer terminates under Art. 36	Yes	Severance, except Art. 36(1) point e and employees eligible for a pension
11	Redundancy for restructuring, technology change, economic reasons, merger or division (Arts. 42, 43)	Yes	Job-loss allowance
12	Work permit expires (foreign employee)	Yes	Not covered by Art. 46(1)
13	Probation fails or either side cancels the probation arrangement	Yes	Not covered by Art. 46(1)

Severance is not only for employer-initiated exits: an employee who resigns lawfully under Article 35 (row 9) is also paid. On rows 5, 12 and 13 we read Article 46(1) literally, so there is no statutory severance; a contract or company policy can still give more. The employer drafts the notice itself (this guide is not based on any state-issued template), stating the ground, the termination date and the amounts to be paid.

How to terminate an employment contract in Vietnam at expiry or by mutual agreement#

Contract expiry. A fixed-term contract runs for at most 36 months (Article 20(1)(b)). When it expires, no notice period applies, but the employer still sends written notice (Article 45) and pays severance if the employee has worked at least 12 months. The usual mistake is letting the contract run on: if the employee keeps working after expiry, the parties have 30 days to sign a new contract, after which the old contract automatically becomes indefinite (Article 20(2)(a) and (b)). A fixed-term contract can be renewed only once, except for a director hired by a state-capital enterprise and the cases in Article 149(1) (older employees), Article 151(2) and Article 177(4) (Article 20(2)(c)). To part ways at expiry, send the notice before the end date and do not let the employee carry on. Two exceptions:

• Members of the leadership of the grassroots employee representative organisation in office: the contract must be extended to the end of the term (Article 177(4)). Failing to extend is fined VND 20 to 40 million for a company (Article 39(2)(d) of Decree 283, doubled under Article 7).
• Pregnant employees and mothers of children under 12 months have priority for a new contract (Article 137(3)); failing to give it is fined VND 20 to 40 million for a company (Article 26(2), point g, of Decree 283). The Code says only "priority" and does not say whether the employer may decline: one reading is that it may still decline for an objective reason (some advisory articles on Thu Vien Phap Luat lean this way), a stricter reading is that renewal is the default. Point g of Article 26(2) fines "failure to give priority" and, unlike points c, d and dd of the same paragraph, has no "unless the parties agree otherwise" wording; there is no official guidance. Treat it case by case and record the objective reason if you do not renew.

Mutual termination agreement. A mutual termination agreement (Article 34(3)) needs no reason and no notice: the parties choose the date. It is the lowest-risk way to end a contract before its term, because it does not depend on any Article 36 condition. The Code does not require a form, but Article 45 requires written notice, so use a signed written agreement stating the termination date and handover, what the company pays (salary, untaken annual leave under Article 113(3), severance under Article 46(1), any extra package), training cost to be repaid under Article 62 or waived, and social insurance confirmation and return of documents (Article 48(3)) within the 14-working-day deadline.

Severance is still payable on a mutual termination, because Article 34(3) is within Article 46(1). In our reading (the Code is not explicit), a clause saying the employee "waives all entitlements" may not be effective for the statutory severance, and if the employee shows that the resignation letter was extracted under pressure, the termination may be treated as an unlawful unilateral termination (Article 39). Keep evidence that the employee agreed freely.

Probation. Each side may cancel a probation contract without notice and without compensation (Article 27(2)).

Employee resignation: rights and notice periods#

An employee may terminate unilaterally without giving a reason but must give notice (Article 35(1)). The notice period for terminating a labour contract is 45 days for an indefinite-term contract, 30 days for a fixed-term contract of 12 to 36 months, and 3 working days for a fixed-term contract under 12 months. The 45 and 30-day tiers are written as "days" while the third tier says "working days" in the same paragraph (Article 35(1); Article 36(2)). The Labour Code has no counting rule of its own, and Article 145(2) of the 2015 Civil Code counts periods by the calendar unless the parties or another law provide otherwise; the first day is not counted (Article 147(2)). So the 45 and 30-day tiers are calendar days, weekends and holidays included; there is no separate guidance from the authorities. State the date the notice was received to make the end date clear. Specific sectors under Article 7 of Decree 145/2020 (flight crew, aircraft maintenance and flight dispatch staff, enterprise managers under the Law on Enterprises and the law on management of state capital invested in enterprises, and seafarers) need at least 120 days for an indefinite contract or a fixed-term contract of 12 months or more, and at least one quarter of the contract term for a contract under 12 months; this applies to both sides.

The employee may leave without notice in the cases in Article 35(2): not assigned the agreed job, place or working conditions; not paid in full or on time (except force majeure under Article 97(4)); abused, insulted or forced to work; sexually harassed; a pregnant employee who must stop work under Article 138(1); at retirement age (unless agreed otherwise); or the employer gave false information when the contract was signed. For employers, the two most common triggers are late salary and moving an employee outside the contract job beyond the limit in Article 29 (60 cumulative working days a year).

Either side may withdraw a termination before the notice period ends, but only by written notice and with the other side's consent (Article 38). If an employee leaves unlawfully, they lose severance, owe half a month's salary plus salary for the days not notified, and must repay training costs under Article 62 (Article 40). If the employee is absent for 5 consecutive working days without good reason, the employer may terminate under Article 36(1) point e (see below).

How an employer may terminate an employment contract in Vietnam: seven grounds, notice and protected employees#

Employers cannot end a contract at will. Without the employee's agreement, unilateral termination of an employment contract is lawful only on the seven grounds in Article 36(1):

• Point a: the employee regularly fails to complete the work. The employer needs criteria in an assessment regulation consulted with the employee representative organisation (if any); skipping the consultation is a fineable breach (Article 18(3)(c) of Decree 283).
• Point b: illness or accident, with working capacity not recovered after continuous treatment for 12 months (indefinite contract), 6 months (12 to 36 months) or more than half the term (under 12 months). Once the employee's health recovers, the employer must consider re-signing a contract.
• Point c: natural disaster, fire, dangerous epidemic, enemy action, relocation or downsizing at a state authority's request, after all remedies have been tried and jobs must still be cut.
• Point d: the employee does not return after the period in Article 31 (15 days after a suspension ends).
• Point dd: the employee is at retirement age under Article 169 (unless agreed otherwise).
• Point e: absence without good reason for 5 consecutive working days; keep time records and notices to return ("good reason" is in Article 125(4)).
• Point g: the employee gave false information at hiring, affecting recruitment.

The points are lettered as in the Vietnamese original: a, b, c, d, dd, e, g (there is no "f"). The notice period for terminating a labour contract under Article 36(2) and (3) is 45 days, 30 days or 3 working days by contract type for points a, c, dd and g; point b is always 3 working days; points d and e need no notice. Specific sectors have their own periods (see above). Send the notice in writing with proof of receipt (the Code states no form, but Articles 38 and 45 both use writing); the end date is the last day of the notice period (our reading), and the employee stays employed and paid until then.

Point e sits close to the "abandoning work" ground for dismissal (Article 125(4): 5 cumulative days within 30, or 20 cumulative days within 365). Neither gives severance (point e is excluded by Article 46(1)), but dismissal must follow the disciplinary procedure in Article 122, while point e requires 5 "consecutive" working days and on its wording has no separate disciplinary procedure. Point d is different: it still falls under Article 34(10), so on the wording of Article 46(1) severance is payable. Choose the route case by case. Disciplinary dismissal is a disciplinary sanction (Article 124(4)) and a separate ground in Article 34(8), available only for the conduct in Article 125, with a stricter procedure and no severance; see dismissal of employees in Vietnam. If it is only poor performance or short absence, go back to Article 36.

When the employer cannot terminate unilaterally. Article 37 bars unilateral termination of an employee who is sick or injured, or has an occupational disease, and is under treatment as prescribed by a competent medical facility (except in the Article 36(1) point b case); on annual leave, personal leave or other leave the employer agreed to; or a pregnant employee, on maternity leave, or nursing a child under 12 months. Article 137(3) bars dismissal or unilateral termination because of marriage, pregnancy, maternity leave or nursing a child under 12 months, unless the employer ceases operation or an individual employer dies, goes missing or loses legal capacity; this is fined VND 20 to 40 million for a company (Article 26(2), point i, of Decree 283). For members of the leadership of a grassroots employee representative organisation, the employer must agree in writing with that leadership before terminating; if there is no agreement, both sides report to the provincial labour authority and the employer may decide only after 30 days (Article 177(3)). Failing to agree, or breaching the reporting period, is fined VND 20 to 40 million for a company (Article 39(2)(a) and (c) of Decree 283). Article 37 blocks unilateral termination of an employment contract, not expiry or mutual agreement.

Terminate an employment contract for restructuring, economic reasons or merger#

This differs from Article 36(1) point c (Article 34(10)) in that Articles 42 and 43 (Article 34(11): change of structure or technology, economic crisis, split, merger, sale and similar) carry job-loss allowance, 30 days' notice to the provincial People's Committee and the employee (Article 42(6)), and a labour-use plan when many employees are affected. The Code does not list "losses" as a ground by itself: the company must bring the case within Article 42 and complete the procedure; whether it qualifies is a case-by-case question. The Article 42 and 44 procedure:

1. Prepare a labour-use plan when a change in structure or technology affects the jobs of many employees, or an economic reason puts many at risk (Article 42(3) and (4)); the Code gives no headcount, so "many" is a case-by-case question. The plan content is set out in Article 44(1).
2. Consult the grassroots employee representative organisation while building the plan, and announce the adopted plan publicly within 15 days (Article 44(2)).
3. Retrain first if there are new jobs; only when you cannot find work may you terminate and pay the job-loss allowance (Article 42(3) and (5)).
4. Consult the representative organisation of which the employee is a member and give 30 days' notice to the provincial People's Committee and the employee (Article 42(6)). In practice that work is handled by the Department of Home Affairs; confirm the filing channel with the local authority.

In Article 18 of Decree 283 we found no separate fine for failing to announce the plan within 15 days or to prioritise retraining; those steps remain duties under the Labour Code. In a merger, sale or similar event, the current and the successor employer are both bound by the adopted plan (Article 43(2)), and employees made redundant receive the job-loss allowance (Article 43(3)).

What happens if you wrongly terminate an employment contract in Vietnam?#

Article 39 defines unlawful unilateral termination as termination outside Articles 35, 36 and 37: wrong ground, wrong notice, or a barred situation. If the employer's termination is found unlawful, Article 41(1) requires it to take the employee back under the existing contract; pay salary and social, health and unemployment insurance for the days the employee could not work; pay at least two months' salary on top; and, where notice was short, pay salary for the days of notice not given. After being taken back, the employee repays any severance or job-loss allowance already received. If the employee does not want to return, the employer also pays severance (Article 41(2)). If the employer does not want the employee back and the employee agrees, the parties agree additional compensation of at least two months' salary (Article 41(3)). If the job no longer exists, the parties amend the contract (Article 41(1)).

Assumed figures: at VND 20 million a month and 5 months out of work, the minimum exposure under Article 41(1) is 5 months' salary plus 2 months' salary, VND 140 million, before insurance contributions for those 5 months and pay for any missed notice days. An employee can go straight to court without prior mediation for disputes over unilateral termination and over allowances on termination (Article 188(1)(a) and (b)); the time limit is one year from the date the claimant learns of the violation (Article 190(3)).

Severance allowance in Vietnam and job-loss allowance: the current formula#

Severance allowance in Vietnam (Article 46) is half a month's salary for each year of service for an employee who has worked regularly for at least 12 months. Job-loss allowance (Article 47) is one month's salary for each year, with a minimum of two months, on the same 12-month condition. The salary base is the average of the last 6 months under the contract. Severance is not payable if the employee is eligible for a pension or the ground is Article 36(1) point e. The part that goes wrong most often is the service period: service counted = total actual time worked for the employer, minus time covered by unemployment insurance, minus time already paid out as severance or job-loss allowance (Article 46(2), Article 47(2)). Article 8 of Decree 145/2020 adds:

• Actual time worked includes probation, time on training sent by the employer, sick and maternity leave paid by social insurance, public holidays, paid leave, stoppages not the employee's fault, and suspension under Article 128 (Article 8(3)(a)). Unemployment insurance time includes time when the employee was not required to join but the employer paid a sum equal to the employer's contribution with the salary (Article 8(3)(b)).
• Counted in years of 12 months; a remainder of 6 months or less counts as half a year, more than 6 months as one year (Article 8(3)(c)). Job-loss allowance is still at least two months' salary if the countable time is under 24 months (Article 8(2)).
• Consecutive contracts with no allowance paid in between are added together (excluding wholly void contracts, a contract ended by dismissal, and a contract the employee ended unlawfully); the salary base is the 6 months before the last contract ends (Article 8(4)(b) and (5)(b)).

What did Law 74/2025 change? The previous Employment Law ceased to apply on 1 January 2026 (Article 54(2) of Law 74/2025). The new law restates that unemployment insurance time does not count toward job-loss allowance or severance (Article 35(3)); Article 46 itself is unchanged. As of 5 October 2026 we have not recorded any text amending Article 8 of Decree 145 to cite the new law (confirm before relying on it), so read its reference to "unemployment insurance law" as Law 74/2025. Unemployment benefit is a separate entitlement paid from the Unemployment Insurance Fund: it is not paid by the employer and does not replace severance, and an employee who meets the conditions for each may receive both. Its conditions, amount and duration are in Articles 38 and 39 of Law 74/2025.

Example (assumed figures). Indefinite contract ended by mutual agreement on 31 October 2026. The employee started on 1 January 2007; the company has paid unemployment insurance since 1 January 2009. Total service is 238 months, less 214 months of unemployment insurance, leaving 24 months (2 years). Average salary for the last 6 months is VND 30 million: severance = 2 years x 1/2 x VND 30 million = VND 30 million. The example only illustrates the arithmetic; check salary, start date and unemployment insurance history against the social insurance record and payroll. Personal income tax on termination payments is not covered here. The allowance is booked as a business expense or operating cost of the employer (Article 8(6) of Decree 145).

After termination: 14-day payout, social insurance and documents#

Article 48 sets the duties that follow termination of employment contract in Vietnam:

• Pay within 14 working days of the termination date, everything related to each side's rights (Article 48(1)); the period may be extended, but to no more than 30 days, when a non-individual employer ceases operation; on change of structure, technology or economic reasons; on split, merger, sale, lease or change of company type; or on natural disaster, fire, enemy action or epidemic. Pay covers salary, untaken annual leave (Article 113(3)), allowances, and amounts under the contract and any collective agreement; if the company is dissolved or bankrupt, wages, insurance and severance rank as priority payments (Article 48(2)).
• Confirm social insurance and unemployment insurance periods and return original documents the employer holds (Article 48(3)(a); Article 13(1) and (3) of Law 41/2024). The employer must pay social insurance in full through the termination date (Article 8(3) of Decree 158/2025) and unemployment insurance too; if it has not paid unemployment insurance in full, it must pay the equivalent of the benefits the employee would have received (Article 33(7) of Law 74/2025).
• Copies of work records on request, at the employer's cost (Article 48(3)(b)). HR files hold personal data, so follow the rules on employee personal data. Retention periods under accounting, tax and social insurance law have not been checked in this guide, so delete data only after checking them; the one-year limit for suing is a limitation period, not a retention period.
• Internal records and periodic reports. The labour management book records the termination date and reason (Article 3(2) of Decree 145). The employer reports workforce changes before 5 June and 5 December each year through the National Public Service Portal to the Department of Home Affairs (Article 4(2) of Decree 145, as handled by Article 71 of Decree 129/2025; Decree 129 lapses on 1 March 2027 unless extended or replaced, Article 80(2)). We do not see a general duty to file individual terminations with a state authority, except Article 42 redundancies and work permits of foreign employees.

Foreign employees: work permits, severance and insurance#

A foreign-invested company has two extra tasks.

1. The work permit ends with the contract. Article 156 of the Labour Code lists when a work permit lapses: termination of the labour contract (clause 2), notice from the foreign side withdrawing the employee (clause 6), and cessation of the employer's operation (clause 7); Article 34(12) treats the lapse as a ground for terminating the contract. Within 15 days of the permit lapsing, the employer must recover the permit and return it to the issuing authority with a report on the recovery; if it cannot recover it, it states the reason (Article 30(1) and Article 31(1) of Decree 219/2025/ND-CP). A certificate of work permit exemption works differently: Article 32 of Decree 219 lists only these grounds for recovery: working outside the content of the certificate, notice from the foreign employer that the employee will not continue in Vietnam, and the employer ceasing operation (clauses 1 to 3; recovery within 15 days under Article 33(1)), plus two cases where the issuing authority itself decides on recovery (clauses 4 and 5). Termination of the labour contract is not on that list, so first establish which document the employee holds. Residence status (visa, temporary residence card) is not analysed here; check it separately with the immigration authority. See the guide to work permit exemption in Vietnam, the handbook entry on what a work permit is and our work permit service.

Failing to recover a permit or certificate, or recovering it late, is fined under Article 13(2), points b and d, of Decree 283 (amounts in the table below; Article 13 states only "not exceeding VND 75,000,000" and is not among the exceptions in Article 7(1), so an organisation is fined at twice the rate; the VND 150 million ceiling for an organisation is inferred from that and matches Article 24 of the Law on Handling Administrative Violations, where the labour-field maximum is VND 75 million for an individual and twice that for an organisation. We checked Article 24 through an article on Thu Vien Phap Luat, not the original text of the Law). Points c and dd of Article 13(2) (failing to return a permit after the authority decides to revoke it) are a different situation and are not covered here.

2. Severance and insurance. The Labour Code applies to foreign employees working in Vietnam, so Article 46(1) applies on expiry, mutual termination or a lawful unilateral termination. The Employment Law defines an "employee" as a Vietnamese citizen (Article 2(1) of Law 74/2025), so on our reading a foreign employee is not in the unemployment insurance scheme and actual service counts toward severance, less any time already paid out and any time for which the employer paid, together with salary, a sum equal to the unemployment insurance contribution: Article 8(3)(b) of Decree 145 treats that period as unemployment insurance time. Article 168(3) of the Labour Code is the basis for that extra payment for employees outside the insurance schemes; whether it applies to the unemployment insurance part for a foreign employee (who is still in compulsory social insurance) needs confirming when you build the calculation. A foreign employee on a fixed-term contract of 12 months or more is subject to compulsory social insurance, except for intra-company transferees, those who had reached retirement age when the contract was signed, and treaty cases (Article 2(2) of Law 41/2024). Note also that a work permit lasts at most 2 years and can be extended once for up to 2 years (Article 155).

Penalties for a wrong procedure to terminate an employment contract in Vietnam#

From 10 September 2026 the fines for termination of employment contract in Vietnam are in Article 18 of Decree 283/2026/ND-CP; Decree 12/2022 ceased to apply (Article 66(4)). The amounts in Article 18 are the individual rate; a company is fined double (Article 7), and the table shows the doubled amounts.

Violation	Basis	Fine for a company
No written notice of termination (except Art. 34(4), (5), (6), (7), (8))	Art. 18(1)	VND 2-6 million
Changing the contract term by addendum; late payout of entitlements; not paying or underpaying severance, job-loss allowance or amounts due on unlawful termination; not completing the social insurance and unemployment insurance confirmation and returning documents; not providing copies of work records on request	Art. 18(2)	VND 2-4 million (1-10 employees); 4-10 million (11-50); 10-20 million (51-100); 20-30 million (101-300); 30-40 million (301 or more)
Redundancy under Art. 42 without consulting the representative organisation or giving 30 days' notice (point a); no or incomplete labour-use plan, or no consultation when preparing it (point b); using an assessment regulation without consulting the representative organisation (point c)	Art. 18(3)	VND 10-20 million
Not recovering, or recovering late, a work permit or exemption certificate	Art. 13(2), points b and d	VND 10-20 million per employee (individual rate VND 5-10 million, capped at 75 million); a company is doubled, capped at 150 million

Remedial measures (Article 18(4)): pay the missing severance or job-loss allowance plus interest at the highest non-term deposit rate of state-owned commercial banks at the time of the penalty; complete the confirmation and return documents; and pay the salary for the days of the 30-day notice not given under Article 42 (Article 18(4)(c), tied to Article 18(3)(a)). In Article 18 we found no separate sanction for short notice under Article 36, but the duty to pay for the missed notice days still arises under Article 41. The limitation period for labour violations is one year (Article 3(4)(a)). A violation that ended before 10 September 2026 is handled under Decree 12/2022; one still continuing when Decree 283 took effect is handled under Decree 283 (Article 67).

If you want to terminate an employment contract in Vietnam and need the ground and file reviewed before a notice goes out, a severance figure calculated, or a mutual termination agreement drafted, LexData's employment law advice works within the scope and documents agreed with you. If the company is considering pausing operations, see business suspension in Vietnam: a suspension does not by itself terminate labour contracts.