Labor is the necessary foundation for our existence and development. However, in order to maintain the stability and development of society, social discipline and order are necessary. Therefore, disciplinary dismissal is a form of punishment for violations by employees, helping to create a disciplined working environment. However, it also has great impacts on employees, causing them to become unemployed and be unfairly treated by abusing disciplinary dismissal.

In addition, not all enterprises also apply the correct disciplinary dismissal procedures for their employees. So, in cases of unfair dismissal, how should enterprises compensate dismissed employees? Let's find out with NPLaw in the following article.

1. Regulations on responsibilities to compensate for dismissing employees

Pursuant to Article 41 of the Labor Code 2019, which stipulates the obligations of employers when unilaterally terminating labor contracts illegally:

- The employers must accept the employees back to work according to the signed labor contracts, simultaneously have to pay wages, social insurance, health insurance and unemployment insurance for the days the employees did not work; besides, they have to pay the employees an additional amount of at least 02 months' salary according to the labor contract.

- When the employees are back to work, they shall return to the employers the severance allowance and unemployment benefits if they have received them from the employers.

- If there are no longer positions or jobs as agreed in the labor contract and the employees still want to work, the two parties shall negotiate to amend and supplement the labor contract.

- If the employers breach the regulations on the notice period stipulated in Clause 2, Article 36 of this Labor Code, they shall pay an amount equivalent to the salary according to the labor contract for the days without notice.

- If the employees don’t want to continue working, in addition to the amount payable as stipulated in Clause 1 of this Article, the employers have to pay the severance allowance as stipulated in Article 46 of this Labor Code to terminate the labor contract.

- If the employers don’t want to accept the employees back and the employee agrees, besides the required amount and severance allowance that the employers have to pay as stipulated in Clause 1 of this Article and Article 46 of this Labor Code respectively, the two parties shall agree on an additional compensation amount for the employees at least 02 months' salary according to the labor contract to terminate the labor contract.

2.  Compensation levels (Severance pay levels) for dismissing employees

2.1. Severance allowance levels

The level of severance allowance is the level of compensation (severance pay) for dismissing employees, as defined by the regulations of Article 46 of the Labor Code 2019, including:

When the labor contracts terminate according to the provisions of Clauses 1, 2, 3, 4, 6, 7, 9 and 10 of Article 34 of this Labor Code, the employers are responsible for paying severance allowance to employees who have regularly worked for them for at least 12 months, especially each year of work is subsidized for half a month's salary, except for cases that are eligible for retirement pensions according to the regulations of the law on social insurance and the cases specified in point e, Clause 1, Article 36 of this Labor Code.

Thus, in the case of enterprises dismissing employees in accordance with the regulations, which falls under Clause 8, Article 34 of the Labor Code 2019, those employees are not entitled to a severance allowance.

2.2. Redundancy allowance (Redundancy payment)

One of the types of compensation (severance pay) for dismissed employees is Redundancy Allowance (Redundancy Payment). According to Clause 1, Article 47 of the Labor Code:

- The employers shall pay Redundancy Allowance to employees who have regularly worked for them for at least 12 months and who have lost their jobs according to the provisions of Clause 11, Article 34 of this Labor Code. The amount is one month's salary for each year of work, but not less than two months' salary. 

However, it should be noted that if employees are dismissed illegally, they must meet the above conditions to be eligible for unemployment benefits.

2.3. Lump-sum Social Insurance

According to Point a, Clause 1, Article 60 of the Law on Social Insurance 2014, amended and supplemented in 2019, the conditions for eligibility for a Lump-sum Social Insurance payment for employees who are not yet eligible for a retirement pension are as follows: The employees have less than 20 years of social insurance contributions; the employees do not continue to participate in social insurance after one year of leaving work.

Therefore, as long as the employees do not continue to work at working units and do not continue to participate in social insurance for one year, and the total social insurance contribution period is less than 20 years at the time of applying for a Lump-sum Social Insurance payment, they will be eligible. Thus, dismissed employees can still receive a Lump-sum Social Insurance payment if they meet the conditions of having less than 20 years of social insurance contributions. 

2.4. Unemployment allowance

Whether or not employees are entitled to dismissal compensation (severance pay) in the form of unemployment allowance as defined by Article 49 of the Employment Law 2013, which states:

Employees specified in Clause 1, Article 43 of this Law who are paying unemployment insurance are entitled to unemployment allowance when they meet all of the following conditions, specifically:

- Terminate labor contracts or employment contracts, except for the following cases: employees unilaterally terminate labor contracts or employment contracts illegally; receive monthly pension or allowance for loss of labor capacity;

- Have paid unemployment insurance for at least 12 months in the 24 months before terminating labor contracts or employment contracts for the cases specified in points a and b, Clause 1, Article 43 of this Law; have paid unemployment insurance for at least 12 months in the 36 months before terminating labor contracts for the cases specified in point c, Clause 1, Article 43 of this Law;

- Have submitted dossiers for unemployment allowance to the employment service center as prescribed in Clause 1, Article 46 of this Law.

Therefore, one of the conditions for receiving unemployment allowance is the termination of the labor contracts. However, if the employees terminate contracts illegally or receive a monthly pension or allowance for loss of labor capacity, they will not be entitled to an unemployment allowance.

If employees are dismissed but meet all of the above conditions, they will still be entitled to an unemployment allowance.

3. How do employees know what level of compensation they are entitled to?

When dismissed by enterprises, employees must first determine whether the dismissal is justified or not, whether it complies with the law or not, to determine their case. Dismissed employees can research and learn about the Labor Code, the Employment Law and the guiding Decrees. If dismissed employees do not understand the law, they can consult with and seek the assistance of professional lawyers.

Depending on each client's case, the lawyer will base on the client's conditions to determine the legal basis for considering the allowances, insurance and salary that the client is entitled to receive when dismissed. Because not all dismissed employees are entitled to the same allowances, insurance and benefits.

4. How is it reasonable to request compensation and allowances for employees when they are dismissed?

Dismissed employees who want to make reasonable claims for compensation and allowances must base themselves on the provisions of the law to consider if they are eligible for those benefits and rights.

After determining their case and the levels of allowance they are entitled to, employees base themselves on the conditions of each type of allowance as stipulated in the Labor Code, such as working time, social insurance contribution time, labor contracts, etc., to calculate the reasonable compensation levels. Dismissed employees should avoid claiming compensation that exceeds the scope of damage.

Therefore, if employees want to claim compensation (severance pay) in case of illegal dismissal, but do not know what levels are reasonable, they need to consult with legal experts and lawyers to ensure their rights and interests are best protected.

5. What can employees do if they cannot agree on satisfactory levels of compensation?

According to Article 131 of the Labor Code 2019 and Article 73 of Decree No. 145/2020/ND-CP detailing and guiding the implementation of a number of articles of the Labor Code on working conditions and labor relations, employees have three ways to protect their rights.

Method 1: Send complaints to the employers’ head offices by mail to have evidence that the employees want to resolve the issue internally with the employers.

Send complaints to the Labor Inspectorate to request settlement of the cases in accordance with the law. Within 07 working days from the date of receiving complaints within their scope and jurisdiction, the first complaint handlers must accept and resolve complaints and notify the complainants and the Chief Inspector of the Department of Labor - War Invalids and Social Affairs where the employers locate head offices in writing.

Method 2: Pursuant to Point a, Clause 1, Article 188 of the Labor Code 2019, employees can send petitions to labor arbitrators for resolution. However, this step can be skipped and requests can be sent to Labor Arbitration Councils or lawsuits can be filed with Courts.

If the parties choose to resolve the dispute through the Labor Arbitration Council, while the Labor Arbitration Council is in the process of resolving the dispute, the parties may not simultaneously request the Court to resolve the dispute.

Method 3: File a lawsuit with the Court.

Pursuant to Articles 32, 35 and 39 of the Civil Procedure Code 2015, employees file a lawsuit and implement other procedures at the District People's Court where the enterprises are located.

Above is information on consulting on employee dismissal compensation that NPLAW would like to send to readers. If readers have any related questions that need further clarification, please contact NPLAW at the following contact information.