A reader who has email phamthanhx @ xx asked: My company has a case where the employee had signed an indefinite labor contract from 2016. In March 2018, this employee had a strokeand be inability to recover.

He asks, if the employee is on sick leave for more than 12 months but has not worked yet, the company has the right to terminate the labor contract and pay each employee for actual work (excluding sick leave) at half monthly salary calculated according to the most recent salary paid?

The Labor Newspaper's legal consultancy office replied:

Article 38 Labor Code 2012 regulations:

An employer may unilaterally terminate a labor contract in the following cases:

a/ The employee often fails to perform his/her job stated in the labor contract;

b/ The employee is sick or has an accident and remains unable to work after having received treatment for 12 consecutive months, in case he/she works under an indefinite-term labor contract, or for 6 consecutive months, in case he/she works under a definite-term labor contract, or more than half of the term of the labor contract, in case he/she works under a labor contract for a seasonal job or a specific job of under 12 months.

When the employee’s health has recovered, he/she must be considered for continued entry into the labor contract;

c/ If, as a result of natural disaster, fire or another force majeure event as prescribed by law, the employer, though having applied every remedial measure, has to scale down production and cut jobs;

d/ The employee is absent from the workplace after the time limit specified in Article 33 of this Code.

2. When unilaterally terminating a labor contract, the employer shall notify the employee in advance:

a/ At least 45 days, for indefinite-term labor contracts;

b/ At least 30 days, for definite-term labor contracts;

c/ At least 3 working days, for seasonal or work-specific labor contracts of under 12 months as stipulated at Point b, Clause 1 of this Article....

Article 48 Labor Code 2012 provides for severance allowance as follows:

Article 48. Severance allowance

1. In case a labor contract terminates in accordance with Clause 1, 2, 3, 5, 6, 7, 9 or 10, Article 36 of this Code, the employer shall pay a severance allowance to the employee who has worked regularly for full 12 months or longer at the rate of half of a month’s wage for each working year.

2. The working period used for the calculation of severance allowance is the total period during which the employee actually works for the employer minus the period during which the employee benefits from unemployment insurance in accordance with the Law on Social Insurance, and the working period for which the employee has received severance allowance from the employer.

3. The wage used for the calculation of severance allowance is the average wage in accordance with the labor contract during 6 months preceding the time the employee loses his/her work.

Based on this provision, you know whether the company is entitled to unilaterally terminate the labor contract with the employee and how to calculate the severance allowance when unilaterally terminating the labor contract.

Legal advice

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This column is done with support from YouMe Law Firm.