Answer:
Pursuant to the Labour Code, a LC will terminate where it is a definite-term LC and its term expires as stipulated in the LC and the parties do not need to continue their labour relationship after this term[1], except for any compulsory extension of the LC with any Employee who is a member of the leadership of the organisation representing Employees at the grassroots level if his or her LC expires during the term of such office[2]. Additionally, the Labour Code also recommends the Employer signing a new LC with any Employee who is pregnant/on maternity leave/raising an under-12-month child if her LCs expire during such period[3]. Therefore, it can be understood that the parties are not required to continue the labour relationship by entering into the new LC, but the Employer must prioritise to reach an agreement with the Employee who is pregnant/on maternity on enter into the new LC.
For this reason, if any female Employee who is pregnant/on maternity leave is not a member of the leadership of the organisation representing Employees at the grassroots level and her LC expires during the term of such office and the parties agree not to enter the new LC and the Employer has given the written notice to such female Employee who is pregnant/on maternity leave about the Enterprise’ decision, the current LC shall be automatically terminated.
In this case, the Employee will be still entitled to the maternity regime under the SI law until the end of 6-month maternity leave, provided that the said Employee meets the conditions for maternity regime as prescribed. It is of note that the period of maternity regime entitlement from the date of maternity leave until the LC expiry is calculated as the period of SI payment, and the period of maternity leave entitlement after the LC expiry is not calculated as the time of SI payment[1].
As the Employer hiring the female Employee in the said case, the Employer then may, based on their current needs, consider dealing with the LC with the said female Employee in one of the following ways:
- Renewing LC
As regulated by the labour laws, if any definite-term LC expires but the Employee continues working, within 30 days from the LC expiry date, the two parties will have to renew the LC; if such definite-term LC is not renewed, it will become the indefinite-term LC[1]. Therefore, in principle, if the Employer wishes to renew the LC with the Employee when the LC expires, the Employer must give writing notice to the Employee of the renewal before the LC expiry (even if the Employee is on maternity leave) to ensure that within 30 days of the LC expiry, the two parties will proceed to renew the LC in accordance with the law.
2. Termination of LC
As aforesaid, any LC with any female Employee who is pregnant/on maternity leave will automatically be terminated when her LC expires. In that case, the Employee must give the priority to enter into the new LC with the Employee who is pregnant/on maternity leave. If the parties agree not to renew the LC, when considering any application for maternity leave by the female Employee and if finding that her LC will expire during 6-month maternity leave, the Employer will have the right to approve a shorter maternity leave (i.e., until the time when the LC expires).
Although it is considered one of the cases of automatic termination of LC and priority to enter a new LC, if the Employer would prefer not to renew LC, in order to ensure the lawful termination of LC due to its expiry, the Employer must pay attention to the following process and procedures:
2.1 Firstly, the Employer must give written notice to the Employee in advance to inform the Employee of the termination date[1].
This provision is intended to clearly show the Employee that the parties will not extend or renew any LC. If any definite-term LC expires but the Employee continues working, within 30 days from the LC expiry date, the two parties will have to renew the LC; if such definite-term LC is not renewed, the current LC will become the indefinite-term LC[1]. Thus, if the Employer does not wish to extend the employment term, the Employer must send the Employee their written notice of termination stating that the LC will be terminated on the expiry date of the LC and the Employer shall not renew the LC.
2.2 Secondly, within 14 working days after the date of LC termination, or with a longer period without exceeding 30 days (if the Employer or the Employee experiences natural disasters, fires, enemy or contagious epidemic; the Employer changes the structure, technology, or for an economic reason; division, separation, consolidation, a merger of enterprises; sale, leasing out, conversion of the enterprise type; Transfer of ownership and use the right of the assets of enterprises or co-operative[1]), the Employer must pay all expenses related to the Employee’ interests including:
- Unpaid salary under the LC;
- Untaken annual leave days;
- Outstanding amounts due to the Employee as of the date of LC termination; and
- Severance allowance equal to one-half month’s salary for each year of employment for the period which the Employee has not paid the UI, if it shall be payable in accordance with the law.
2.3 Finally, the Employer must complete required procedures for certifying and returning the Employee his or her SI book and other documents that the Employer is holding.
[1]Article 34.1 of the Labour Code
[2]Article 177.4 of the Labour Code
[3] Article 137.3 of the Labour Code
[4]Article 42.6.1 of Decision 595/QD-BHXH dated 14 April 2017
[5]Article 20.2 of the Labour Code
[6] Article 45.1 of the Labour Code
[7]Articles 20.1(b) and 20.2 of the Labour Code
[8] Article 48.1 of the Labour Code
