Pursuant to the Labor Code, the LC will terminate where it is a definite LC and its term expires as stipulated in the LC and the parties have no need to continue their labour relationship after this term, except for any compulsory extension of the LC with any Employee who is a part-time trade union officer for the enterprise and is serving during the term of the trade union. In addition to this provision, the Labor Code as well as the guiding documents do not cover any preclusion from terminating the LC due to the term expiry of female Employees who are pregnant/on maternity leave. Therefore, for female Employees who are pregnant/on maternity leave and are not part-time trade union officers, when LCs expire and the parties have no need to continue signing LCs, and Employers give 15-day notice before expiry, LCs will be automatically terminated.
In this case, Employees will be still entitled to the maternity regime under the SI law until the end of 6-month maternity leave, provided that such Employees meet 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.
As Employers using female Employees in the said cases, Employers then may, based on the current needs, consider dealing with LCs with such female Employees in one of the following ways:
As regulated by labour law, if any definite LC expires but Employees continue to work, within 30 days of the LC expiry, the two parties will have to renew LC; if such definite LC is not renewed, it will become the indefinite LC. Therefore, in principle, if Employers wish to renew LCs with Employees when their LCs expire, Employers must notify Employees of such renewal 15 days before expiry of their LCs (even if Employees are on maternity leave) to ensure that within 30 days of LC expiry, the two parties will proceed to renew LC in accordance with the law.
2. Termination of LCs
As aforesaid, LCs with female Employees who are pregnant/on maternity leave will automatically be terminated when their LCs expire. Therefore, when considering any application for maternity leave by female Employees and if finding that their LCs will expire during 6-month maternity leave, Employers have the right to approve a shorter maternity leave (i.e. until the time when the LC expires) if the two parties have no need to renew the LC.
Although it is considered one of the cases of automatic termination of LC, in order to ensure the lawful termination of LC due to its expiry, Employers must pay attention to the following process and procedures:
2.1. First, at least 15 days before the expiry date of the LC, the Employers must inform in writing Employees of the time of termination of their LC.
This provision is intended to clearly show Employees that the parties will not extend or renew any LC. If any definite LC expires but Employees continue to work, within 30 days of the LC expiry, the two parties will have to renew LC; if such definite LC is not renewed, it will become the indefinite LC. Thus, if Employers do not wish to extend the employment term of Employees, Employers must send Employees the written notice of termination stating that LCs will terminate on the expiry date of their LCs and Employers will not renew their LCs.
2.2. Second, within 07 working days of the date of terminating LCs or with a longer period without exceeding 30 days (if Employers or Employees experience natural disasters, fires, enemy or contagious epidemic), Employers must pay all expenses related to Employee’s interests, including:
- Unpaid salaries under LC;
- Untaken annual leave days;
- Outstanding amounts due to Employees as of the date of terminating LCs; and
- Severance allowances equal to one-half month’s salary for each year of employment for the period when the UI is not paid, if they are payable in accordance with the law.
2.3. Finally, Employer must complete the procedures for certifying and returning Employees SI books and other documents that Employers are holding.
Article 36.1 Labor Code
Article 192.6 Labor Code
Article 42.6.1 Decision 595/QĐ-BHXH dated 14/4/2017
Article 22.2 Labor Code
Article 47.1 Labor Code
Articles 22.1(b) and 22.2 Labor Code
Article 47.2 of the Labor Code and Article 14.5(b) of Decree 05/2015/NĐ-CP dated 12/01/2015