Question 41: When higher-ranking leaders request to speed up the layoff process but it will take 2-3 months to finish the legal procedure in accordance with labour law, what the human resources department or the internal counsel should do to strike a balance between the leaders’ request and law?

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In the restructuring procedure, there are two steps for which labour law prescribes specifically in terms of time, including:

  • The termination of LCs with many Employees due to restructuring reasons can be done after Employers have consulted the labour collective representing organisation and must give a 30-day prior notice to the provincial labour management agency. Accordingly, the duration of 30 calendar days to wait for the provincial labour management agency cannot be changed. This period is necessary for Employees to make complaints and settle complaints if any;
  • Giving prior notices to Employees regarding the termination of LCs so they will have a reasonable amount of time to seek new jobs – this step is not mentioned by labour law but actually courts and local labour management agencies often request enterprises to do this step. So, Employers should give 30-calendar day prior notices with respect to definite-term LCs or 45-calendar day prior notices with respect to indefinite-term LCs. In reality, Employers often pay salaries for the 30 or 45 days of prior notification to terminate LCs instead of giving prior notices.

If the board of directors requests to shorten the procedure, the human resources department or in-house counsels should advise their higher-ranking leaders on the legal procedure, the mandatory duration of 30 calendar days to wait for the provincial labour management agency, and the legal risks that may occur if they try to cut or shorten the prescribed procedures in other steps.

To make the advice more objective and effective, the human resources department and/or in-house counsels can propose hiring outside lawyers to provide professional legal advice on this matter. The advice provided by an intermediary party who has actually dealt with many cases will be more objective and convincing.

If these leaders still request to propose a suitable method to shorten the termination procedure, the human resources department or in-house counsels may propose an option in which they will negotiate with the concerned Employees to reach an agreement on the termination of LCs in accordance with Article 36.3 of the Labor Code. Laying-off Employees by an agreement on termination of LCs is always the safest option for Employers, minimising labour disputes in the next steps even though this may result in higher costs for enterprises.