Decree 145/2020/ND-CP of the Government dated 14 December 2020 (“Decree 145”) takes effect from 01 February 2020. Therefore, if LC terminates after 01 February 2020, Decree 145 will be applied as a legal basis for calculating severance allowance for the Employee (if any).
Accordingly, the formula to calculate the working time of e Employee used for calculation of the amount of the severance allowance or retrenchment allowance is the total time that the Employee actually worked for the Employer minus any time during which the Employee participated in the UI in accordance with the Labour Code and minus the working time for which the Employer has already paid the severance allowance or retrenchment allowance (if any)[1]. In which, the fact that the probationary period is considered the actual working time for the Employer has inherited the spirit of Decree 05/2015/ND-CP of the Government dated 12 January 2015. Therefore, if the LC taked effect after the effective date of Decree 145, the actual time working for the Employer as a basis for calculating the severance allowance will include the probationary period of the Employee. Accordingly, the Employer has to pay the severance allowance for the probation period of the Employee. However, it should be noted that according to Section II.1.1 of Decision 2777/QD-BHXH dated 31 December 2015, if the Employer and the Employee have entered into a LC which has regulation on probation period, the Employee will be the subject of participation of the UI and the time to calculate severance allowance for the Employee will be the Employee’s total actual working time (including the probationary period) minus the time Employee has participated in the UI (including probation).
[1] Article 8.3 of Decree 145/2020/ND-CP dated 14/12/2020
