A dismissal in Vietnam is unlawful when the employer ends the contract without one of the grounds listed in the Labour Code, skips the required notice, or ignores the procedure for disciplinary dismissal. Vietnam has no "at will" employment: an employer cannot simply decide it no longer wants someone and let them go. If a court or labour body finds the termination unlawful, the employer generally has to take the employee back, pay wages and insurance for the time out of work, and add compensation on top.
This guide sets out how Vietnamese law separates lawful from unlawful terminations, what an employee can claim, what the employer can still do to limit exposure, and the deadlines that decide whether a claim survives. It applies to foreign employees and to Vietnamese staff of foreign-invested companies alike. It is general information based on the Labour Code adopted in 2019 and in force since 2021; check any amendments and the details of your case with a licensed lawyer.
Why "no at-will employment" matters so much
Managers arriving from the United States or some Asian markets are often surprised that a Vietnamese employment contract cannot be ended just because the relationship is not working. The Labour Code gives the employer a closed list of grounds for ending a contract on its own initiative. Outside that list, the employer has three lawful paths: agree a mutual termination with the employee, wait for a fixed-term contract to expire, or run a disciplinary process that ends in dismissal where the employee's conduct fits one of the serious breaches the code describes.
This design shapes the whole relationship. Performance management in Vietnam needs written criteria that the employee has seen, because "habitually failing to complete work" is one of the grounds for unilateral termination, and an employer has to prove it against standards it set in advance. Restructuring has its own procedure. Even the end of a fixed-term contract has formalities, including advance notice in writing.
For employees, the practical message is that a sudden "please leave today" email is rarely the end of the story. For employers, it means the cheapest termination is usually a well-documented mutual agreement, signed after a calm conversation about money and timing, rather than a unilateral decision that the employee can later challenge.
The grounds an employer can rely on
Habitual failure to perform. The employee repeatedly fails to complete the work described in the contract, measured against performance criteria the employer has issued in writing after consulting the employee representative body where one exists. Vague dissatisfaction is not enough.
Long illness. The employee has been sick or injured and remains unable to work after treatment for a long period, with the threshold set according to the type of contract. When the employee recovers, the employer should consider re-employment.
Force majeure. Natural disasters, fire, epidemics, relocation ordered by the state and similar events force the employer to cut jobs after it has tried every way to keep them.
Not returning after suspension. The employee fails to come back to work within the period allowed after a lawful suspension of the contract ends.
Retirement age. The employee reaches the statutory retirement age, unless the parties agree otherwise.
Unexplained absence. The employee quits work without a valid reason for a run of consecutive working days set by the code.
False information at hiring. The employee gave untrue information when the contract was signed, and that information affected the hiring decision.
Notice, protected employees and the procedure trap
Having a ground is only half the requirement. For most grounds, the employer must give written notice in advance, and the length depends on the contract type: longer for indefinite-term contracts, shorter for fixed-term contracts, and only a few working days for contracts under twelve months. Some grounds, such as unexplained absence or reaching retirement age, do not require notice. Getting the notice period wrong does not automatically cancel the termination, but the employer must pay salary for the days of notice it failed to give, and in many disputes the missing notice is treated as part of an unlawful termination.
The code also protects certain employees from unilateral termination during specific periods. An employer cannot rely on most grounds while the employee is being treated for illness or injury under a doctor's decision, is on annual leave or other approved leave, or, in the case of a female employee, is pregnant, on maternity leave or raising a child under twelve months old. Terminating during these windows is a classic route to an unlawful dismissal finding.
Disciplinary dismissal is a separate track with its own steps: proof of fault, a meeting where the employee can defend themselves, participation of the employee representative organisation where the employee is a member, and minutes of the meeting. An employer that labels a termination "disciplinary" but skips these steps exposes itself in the same way as one that had no ground at all.
What the employee can claim if the dismissal is unlawful
The Labour Code sets out a package of remedies. Exact amounts depend on the employee's salary and the facts, and the court or arbitration council decides how the rules apply. In outline:
| Situation | What the employer generally owes |
|---|---|
| Employee returns to work | Reinstatement under the old contract, salary and compulsory insurance contributions for the days the employee was kept out of work, plus additional compensation of at least two months' salary |
| Employee does not want to return | The amounts above, plus the severance allowance the employee would be entitled to on leaving |
| Employer does not want the employee back and the employee agrees | The amounts above, plus an additional compensation that the parties negotiate, which the code says must be at least two months' salary |
| Position no longer exists | Compensation as above, and the parties negotiate amendments to the contract if the employee is to return to a different role |
| Notice period not respected | Salary for the days of notice that should have been given |
These figures are minimums, not a ceiling. A settlement can go higher, and many do, because both sides prefer certainty over a long hearing. Always check the current text of the Labour Code and how courts in your area calculate "salary" before you put a number in a demand letter.
What to do in the first two weeks after being let go
The steps below come from the employee side, but an employer reading them will see where its own file needs to be strong.
- Ask for the decision in writing. A termination decision or notice should state the ground relied on and the effective date. If you only received a verbal instruction or a chat message, ask politely for a formal document.
- Do not sign a resignation letter you did not write. Some employers present a pre-drafted "voluntary resignation" or mutual termination form. Signing turns a possible unlawful dismissal into an agreed departure. Take it away and read it, or have it translated.
- Collect your contract and evidence. Keep the employment contract, appendices, salary slips, performance reviews, internal rules you were given, and emails around the decision.
- Check the final settlement. The employer must settle wages, unused leave and other amounts within a limited time after the contract ends, and return your documents and confirm your social insurance period.
- Write down a timeline. Dates of warnings, meetings and the decision itself will matter to a mediator or judge.
- Talk before you file. A short letter setting out why you think the termination was unlawful, and what you would accept, often opens a negotiation.
- Watch the deadline. Unlawful termination disputes can go directly to court without labour mediation, and the limitation period runs from when you knew your rights were infringed. Confirm the current period with a lawyer early.
The employer's side: limiting exposure
An employer that realises its termination was shaky has options. It can withdraw the decision before the dispute escalates, pay the salary for the gap and invite the employee back. It can propose a mutual termination agreement with a payment that reflects the legal risk. What it should not do is stack new accusations onto the file after the fact, because a mediator or judge will look at the reasons stated at the time.
Foreign-invested companies sometimes run into trouble because head office instructions arrive in English and the local HR team implements them without checking the Vietnamese procedure. A regional reorganisation announced on a video call is not a legal ground on its own. If the company really is restructuring, it should follow the restructuring track, which has its own consultation and notification steps and its own allowance for affected staff.
Documentation is the employer's best defence. Written performance criteria, warnings acknowledged by the employee, minutes of meetings and a clear termination notice stating the ground make most claims easy to resolve. Without them, even a genuinely poor performer can win reinstatement and compensation.
A hypothetical example shows how this plays out. A regional sales manager at a foreign-owned distributor in Hanoi misses targets for two quarters, and head office asks for her to be let go by the end of the month. The company has never issued written performance criteria, and the targets lived only in slide decks. If it terminates on performance grounds, it will struggle to prove the ground. A negotiated mutual termination, with a payment reflecting a few months of salary and a neutral reference, is likely to cost less than defending the claim and far less than reinstating her with back pay after a year in court.
When you need a Vietnamese lawyer
An employee earning a modest salary with a clear-cut case, such as being fired without notice during maternity leave, can often negotiate a settlement directly or through the labour mediator. A lawyer becomes worthwhile when the employer disputes the facts, when the employee is a senior manager with bonuses, shares or a non-compete clause in play, or when the employee is a foreigner whose work permit and residence depend on the job. The interaction between the termination and immigration status is not something to guess at.
Employers should involve a licensed Vietnamese lawyer before terminating anyone in a protected category, before relying on performance grounds for the first time, and whenever the termination is part of a wider reorganisation. The cost of a review at that stage is small compared with reinstatement plus months of back pay.
Bring the contract, internal labour rules, the termination decision and your timeline. Ask the lawyer about the realistic outcome in mediation or court, the limitation period and the likely calculation of compensation. For a first opinion on whether your case is worth pursuing, you can ask a lawyer on AI Co Van, then check the current rules with the court or a licensed lawyer before acting.
Frequently asked questions
Can my employer in Vietnam fire me without giving a reason?
No. Vietnamese law does not allow at-will termination. The employer must rely on a ground listed in the Labour Code, follow the notice rules, or use the disciplinary procedure for serious misconduct. A termination without a lawful ground can be challenged before a labour mediator, arbitration council or court.
Is the end of a fixed-term contract a dismissal?
Normally not. When a fixed-term contract expires, it ends by law, although the employer should give advance written notice and the employee may be entitled to severance. Repeated renewals and the special rules for foreign employees can complicate this, so check how many times your contract has been renewed.
Do I have to go to mediation before suing for unlawful dismissal?
Disputes about unilateral termination and disciplinary dismissal are among the cases that can go directly to court without first passing through a labour mediator. You can still choose mediation if you think a quicker settlement is possible, but it is not a precondition in these cases.
Can a foreigner bring an unlawful dismissal claim in Vietnam?
Yes. Foreign employees working under a Vietnamese employment contract are protected by the Labour Code like local staff. The practical difficulty is timing, because losing the job can affect a work permit and residence status, so take advice quickly on both the labour claim and your immigration position.
What if I already signed a mutual termination agreement?
A signed agreement is hard to undo. You would need to show that you signed because of deception, threats or a serious mistake, or that the agreement itself breaks the law. Read any termination paper carefully, and ask for time or a translation before you sign.
Does the employer have to pay my salary while the dispute is pending?
Not automatically. If the dismissal is later found unlawful, the employer must pay the salary and insurance contributions for the days you were kept out of work. That is why delay can be expensive for an employer with a weak case.