Question 7: May Employers set out a longer prior notice period upon Employees’ termination of LCs than the one prescribed by law? How do Employers extend the prior notice period upon Employees’ termination of LCs?

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May Employers set out a longer prior notice period upon Employees’ termination of LCs than the one prescribed by law? Pursuant to the general stipulations on the prior notice period upon termination of LCs, Employees must comply with the prior notice period of at least 3 working days for the seasonal or specific job-based LC with a term of less than 12 months, 30 days for the definite LC and 45 days for the indefinite LC[1]. This is the obligation for Employees to ensure that Employers will have time to find new Employees. As a matter of law, this is also the Employees’ right to choose to make this notice for a longer period (2 months, 3 months or even more in advance) as long as they comply with the minimum prior notice period of 03, 30 or 45 working days, as the case may be, in accordance with the law. Thus, if Employers depend on this right of Employees for unilaterally turning it into a requirement for Employees to give any advance notice of a longer period than prescribed by the law, this requirement will not be in accordance with the law.
  • How do Employers extend the prior notice period upon Employees’ termination of LCs?
Where Employers want Employees to give an advance notice upon termination of their LCs for a longer period than stated by the law, Employers may consider the written agreement with Employees to obtain their consent to this matter as long as Employers make sure not to damage Employees’ material benefits. However, even if Employees agrees to the requirement by Employers, such a requirement is likely to directly affect Employees’ rights and interests. For example: An Employer and an Employee sign definite LC from 01/01/2017 to 31/12/2018. In early March 2018, the Employee’s son was seriously ill and had to be treated at the hospital and at home for a long period of time, so the Employee wanted to quit the job to take care of his/her son. Pursuant to Article 37.1 of the Labor Code, the Employee is obliged to notify the Employer at least 30 days in advance. However, if the Employer issues a regulation requiring the Employee to give notice at least 02 months or more, they will not be able to meet this requirement because he/she cannot know when they may become seriously ill. In addition, when the Employee fails to comply with the prior notice period prescribed by the Employer, the Employer may state that the Employee has unilaterally terminated the LC in contravention of the law and require the Employee to compensate the Employer for a sum corresponding to the Employer’s salary for unannounced days under the Labor Code. In cases where the parties agree to a prior notice period of two months upon termination of the LC, the Employee will have to compensate the Employer for two months’ salary due to a breach of the notice period, while the compensation is only the Employee’s one-month salary corresponding to 30-day notice upon termination of the LC in accordance with the labour law[2]. Then the application of the said provision by the Employer will directly affect the Employee’s right to unilaterally terminate the LC in accordance with the law. This may lead to the risk that the Employee may complain to the Employer in order to claim benefits in accordance with the law. It should be noted that the provision on the longer prior notice period than regulated by the Labor Code in LC is not considered an agreement to terminate an LC under Article 36.3 of the Labor Code. Because such agreement occurs at a time when the two parties wish to terminate LC (it is impossible to agree on the terms and conditions of termination in the LC), this means that the two parties have agreed to terminate the LC ahead of schedule. Accordingly, at the time of agreeing to terminate the LC, in addition to other agreements, the two parties have the right to consent to the last working day of Employees and this consent will result in the written agreement on terminating the LC. For example: As of 01/01/2018, the two parties signed an LC with a term of 12 months from 01/01/2018 to 31/12/2018. As of 02/04/2018, the two parties agreed to terminate the LC ahead of schedule and sign the agreement on terminating the LC with the related contents as below:
  • The date of signing the agreement on terminating the LC is 02/04/2018; and
  • The last working day of Employees is the date after 3 months from the date of signing the Agreement – i.e. their last working day is 30/06/2018.
In fact, there are no legal cases related to the agreement on a longer advance notice period upon termination of the LC than that which is stated by the law. Acting with prudence, Employers should consider seeking official guidelines on its legal application from the competent local labour management authority and must ensure such agreement is to be based on the protection of Employees’ benefits. [1] Articles 37.2 (b) and 37.3 Labor Code [2]Article 43.2 Labor Code