Answer:
1. Shall the Employer pay severance allowance in cases where the Employee is assigned to other jobs due to the Employer’s transfer of ownership or the right to use corporate properties?
According to Article 43 of the Labour Code, in case of transfer of the ownership or the right to use corporate properties, the Employer takes the following responsibilities:
- Set up a labour usage plan pursuant to the Labour Code[1];
- Calculate statutory retrenchment allowance to pay the Employee who must terminate the LC according to the said labour usage plan[2].
In addition, it should be noted that, according to the regulations of the Labour Code, the Employer must pay the Employee severance allowance within 14 days of terminating the LC[3]. In case of any late payment of the severance allowances, the Employer will be sanctioned for administrative violations and pay interest over delayed severance allowance calculated at the maximum interest rate applicable to non-term deposits of the commercial State banks announced by the State Bank of Vietnam at the time of penalty on severance allowance[4].
2. Salary level serving as the basis for payment of severance allowances
When the Employer pays the Employee severance allowance, the salary serving as the basis for calculating severance allowance will be counted as the average salary of a LC for the 6 consecutive months before the Employee leaves or loses his or her job, including the following[5]:
- Salary level calculated according to the time of the job or title based on salary scale and payroll as stated by the Employer in accordance with the labour legislation, which is agreed upon by the Employer and the Employee. For the Employee receiving piecework or lump sum salary, the salary rate is the one calculated over time to determine the product unit price or lump sum salary;
- Salary allowances to compensate for labour conditions, job complexity, living conditions and labour attraction extent, which are agreed upon by the Employer and the Employee while the agreed contractual salary have not yet been covered or insufficiently covered, such as salary allowances; and
- Additional amounts defining the specific figures along with the agreed salary level in the LC and are paid regularly in each salary period agreed upon by the Employee and the Employer.
[1]Article of 43 the Labour Code
[2]Article 15.2 of Decree 05/2015/NĐ-CP dated 12/01/2015 and Article 49 of the Labour Code
[3] Article 48.1 of the Labour Code
[4]Article 11 of Decree 28/2020/NĐ-CP dated 01/03/2020
[5]Articles 46.3 and Article 47.3 of the Labour Code, Article 8.5 (a) of Decree 145/2020/ND-CP dated 14/12/2020 and Article 3.5 of Circular 10/2020/TT-BLĐTBXH of the Ministry of Labour, Invalids and Social Affairs dated 12/11/2020
