Tiếng Việt1. What is severance pay and in what cases is severance pay?
Currently, the Labor Code 2019 does not provide a clear definition of severance allowance, however, it can be understood that severance allowance is an additional amount of support paid by the employer to an employee after taking a leave of absence. employment or terminate a labor contract or a working contract for a certain period of time.
Currently, the severance allowance is specified as follows in Clause 1, Article 46 of the Labor Code 2019:
When the labor contract is terminated according to the provisions of Clauses 1, 2, 3, 4, 6, 7, 9 and 10, Article 34 of this Code, the employer is responsible for paying severance allowance to the employee. employees who have worked regularly for them for full 12 months or more, each working year is entitled to a half-month salary allowance, except for cases where they are eligible for pension under the provisions of the law on social insurance and the case specified at Point e, Clause 1, Article 36 of this Code. (e. The employee voluntarily quits his job without a valid reason for 05 consecutive working days or more.
The cases in Article 34 mentioned include:
1. Expiry of the labor contract, except for the case specified in Clause 4, Article 177 of this Code
2. The work has been completed according to the labor contract.
3. The two parties agree to terminate the labor contract.
4. The employee is sentenced to imprisonment but is not entitled to a suspended sentence or is not released under the provisions of Clause 5, Article 328 of the Criminal Procedure Code, is sentenced to death, or is prohibited from doing the job listed. in the labor contract under the court’s judgment or decision that has taken legal effect.
5. The worker dies; has been declared by the Court to have lost his civil act capacity, is missing or has died.
6. The employer being an individual dies; has been declared by the Court to have lost his civil act capacity, is missing or has died. The employer who is not an individual terminates its operation or is notified by the specialized business registration agency of the People’s Committee of the province that there is no legal representative or authorized person to do so. rights and obligations of the legal representative.
7. The employee unilaterally terminates the labor contract according to the provisions of Article 35 of this Code. (D 35. The right to unilaterally terminate the labor contract of the employee)
8. The employer unilaterally terminates the labor contract according to the provisions of Article 36 of this Code. (D 34. Cases of termination of labor contracts)
Thus, the conditions for enjoying severance allowance are: The employee has worked regularly for full 12 months or more for the employer and falls into one of the 10 cases mentioned above.
2. Cases not receiving severance allowance:
– Employees are eligible for pension under the provisions of Article 169 of the Labor Code and the law on social insurance;
– The employee voluntarily quits his/her job without a valid reason for 05 consecutive working days or more specified at Point e, Clause 1, Article 36 of the Labor Code. The case is considered to have a legitimate reason as prescribed in Clause 4, Article 125 of the Labor Code.
– The contract expires but falls into the case of Clause 4, Article 177 of the Labor Code (Clause 4 D 177: The signed labor contract must be extended until the end of the term for the employee who is a member of the management board of the organization). The employee’s representative office at the establishment is in the term that the labor contract expires.)
3. How is the severance allowance calculated?
3.1. Calculation: For each year of work, employees are subsidized with half a month’s salary
Working time to calculate severance allowance is total time the employee has actually worked for the employer minus the time the employee has participated in unemployment insurance in accordance with the law on unemployment insurance. Unemployment insurance and working time have been paid severance allowance and job loss allowance by the employer.
In which, according to the provisions of Article 8, Decree 145/2020:
a) The total time the employee has actually worked for the employer, including: the time the employee has directly worked; probationary period; time being sent by the employer to attend school; the period of leave to enjoy the sickness and maternity benefits in accordance with the law on social insurance; time off work for treatment, occupational rehabilitation in case of occupational accident or occupational disease, which is paid by the employer in accordance with the law on occupational safety and sanitation; time off from work to perform civic duties as prescribed by law, which is paid by the employer; the time off work is not due to the fault of the employee; weekly leave according to Article 111, full pay leave under Article 112, Article 113, Article 114, Clause 1 Article 115; the time for performing the tasks of the representative organization of employees as prescribed in Clause 2, Clause 3, Article 176 and the time of being temporarily suspended from work according to Article 128 of the Labor Code.
b) The time the employee has participated in unemployment insurance includes: the time the employee has participated in unemployment insurance according to the provisions of law and the time the employee is not required to participate in unemployment insurance. as prescribed by law, but is paid by the employer together with the employee’s salary an amount equivalent to the level of unemployment insurance premium paid by the employer in accordance with the provisions of the law. Labor law, unemployment insurance.
c) Working time for calculation of severance allowance or job loss allowance of employees is calculated by year (full 12 months); in case of odd months less than or equal to 06 months, it is equal to 1/2 year, over 06 months is counted as 01 working year.
The salary used to calculate the severance allowance and job loss allowance is the average salary of 06 consecutive months under the labor contract before the employee quits his job.
3.2. Example:
Ms. A signs a contract for company B with the following contracts:
Probationary contract: 05/05/2020 – 05/07/2020 (2 months), salary is 8.5 million/month
Contract with a fixed term of 12 months for the first time: July 5, 2020 – July 5, 2022, salary is 10 million/month
The second 12-month definite-term contract: July 5, 2021 – July 5, 2022, the salary is 12 million/month.
During this period, Ms. A applied for maternity leave: 06 months from December 2, 2021 to May 2, 2022
On June 5, 2022, Ms. A resigned from her job. Ms. A participates in paying insurance from July 5, 2020.
Thus, Ms. A has worked at company B as:
1. Total time Ms. A actually works for company B is: 25 months including probation period and maternity leave.
2. Ms. A’s time of participating in unemployment insurance is: 17 months
3. Ms. A’s period of not participating in unemployment insurance is (1) – (2): 8 months (2 months of probationary period and 6 months of maternity leave)
Therefore, the calculation period for Ms. A’s severance allowance is: 8 months, rounded to 1 working year.
>> Ms. A is entitled to a 0.5-month severance pay allowance.
The average salary of Ms. A’s 6 months prior to her resignation is 12 million/month. Thus, Ms. A is entitled to a subsidy of 12 million * 0.5 months = 6 million.
