Failure to fully settle employee entitlements after dismissal not only adversely affects the lawful rights and interests of employees but also damages the company’s reputation and may lead to various legal risks. Therefore, understanding the legal regulations directly related to such an issue has become a matter of concern for many individuals and organizations. The following article by NPLaw serves as an appropriate reference for those seeking guidance on the failure to fully settle employee entitlements after dismissal.

I. Current situation regarding failure to fully settle employee entitlements after dismissal

In current labor relations, the failure to fully settle employee entitlements after dismissal occurs relatively frequently for employees. Such a situation has made the selection of a working environment increasingly important for employees. Some common causes may be summarized as follows:

  • Employers do not fully understand legal regulations concerning employees’ entitlements after dismissal, resulting in incomplete settlement.
  • A mindset of “punishing” employees after issuing a dismissal decision.

This not only affects the legitimate rights and interests of employees but also causes enterprises to lose credibility in the market and may even expose them to legal risks and prolonged litigation.

II. Concept of failure to fully settle employee entitlements after dismissal

1. What is failure to fully settle employee entitlements after dismissal?

Current law does not provide a specific definition of the term “failure to fully settle employee entitlements after dismissal”. It creates difficulties for individuals and organizations seeking legal regulations governing such an issue.

Therefore, based on relevant provisions of the Labor Code 2019, this term may be simply understood as follows: Failure to fully settle employee entitlements after dismissal means that the employer fails to perform or incompletely performs the obligation to pay monetary amounts, benefits, or other entitlements that the employee is entitled to under the law, the labor contract, the collective labor agreement, or the enterprise’s internal regulations after termination of the employment relationship due to dismissal.

Understanding the above concept serves as the foundation for individuals and organizations wishing to independently research the failure to fully settle employee entitlements after dismissal and identify the applicable legal provisions.

2. What labor disputes may arise from failure to fully settle employee entitlements after dismissal?

First, it is necessary to understand what constitutes a labor dispute. Clause 1 Article 179 of the Labor Code 2019 provides as follows: “A labor dispute is a dispute over rights, obligations, and interests arising between parties during the establishment, implementation, or termination of labor relations; disputes among employee representative organizations; and disputes arising from relationships directly related to labor relations”.

In practice, failure to fully settle employee entitlements after dismissal may lead to the following labor disputes:

  • Wage disputes: The employer fails to pay wages for the days the employee worked prior to dismissal.
  • Social insurance disputes: Failure to complete social insurance procedures or outstanding social insurance contributions resulting in the employee being unable to receive unemployment benefits.
  • Disputes regarding the legality of the dismissal decision: The employee believes that the dismissal was conducted improperly, leading to claims for compensation for all related entitlements.

The above are only common labor disputes that may arise from failure to fully settle employee entitlements after dismissal. Depending on the complexity of the work and the characteristics of each company, such disputes may be more diverse.

III. Legal regulations related to failure to fully settle employee entitlements after dismissal

1. In which cases is an employer entitled to dismiss an employee?

For dismissal to be lawful, in addition to following the proper procedure, ensuring that the reason for dismissal falls within cases permitted by law is also essential.

Pursuant to Article 125 of the Labor Code 2019, an employer is entitled to dismiss an employee in the following cases:

  • The employee commits theft, embezzlement, gambling, intentional infliction of injury, or uses drugs at the workplace.
  • The employee discloses business secrets or technological secrets, infringes intellectual property rights of the employer, causes serious damage or threatens to cause particularly serious damage to the employer’s assets or interests, or commits sexual harassment at the workplace as prescribed in the internal labor regulations.
  • The employee has been disciplined by extension of salary raise period or demotion and re-offends during the period in which the disciplinary record has not yet been expunged.
  • The employee is absent from work without legitimate reasons for an accumulated total of 05 days within 30 days or 20 days within 365 days calculated from the first day of unauthorized absence.

In summary, if the employee falls into one of the above cases, the employer has the right to dismiss the employee in accordance with the law.

2. What benefits is an employee entitled to upon dismissal?

Dismissal is also one of the cases of termination of a labor contract (Clause 8 Article 34 of the Labor Code 2019). Therefore, the benefits an employee is entitled to upon dismissal are the same as the entitlements arising upon termination of a labor contract.

Accordingly, Article 48 of the Labor Code 2019 provides that dismissed employees may be entitled to the following:

  • Receipt of unpaid amounts: Within 14 working days from the date of dismissal, the employer is responsible for fully settling all amounts payable to the employee, except in special cases where the period may be extended but must not exceed 30 days (Clause 1 Article 48 and Clause 3 Article 113 of the Labor Code 2019).
  • Unemployment insurance benefits: Where the labor contract includes unemployment insurance contributions, upon dismissal, the employee may also enjoy unemployment insurance benefits, including career counseling, job placement support, vocational training and skills improvement support, and unemployment allowance (Clause 1 Article 30 of the Law on Employment 2025).
  • Completion of procedures for certification of the period of social insurance and unemployment insurance contributions and return of original documents retained by the employer.
  • Provision of copies of documents relating to the employee’s working process if requested by the employee. The copying and delivery costs shall be borne by the employer.

In summary, upon dismissal by the employer, the employee may receive unpaid amounts, enjoy unemployment insurance benefits, and be provided with documents relating to the settlement of social insurance procedures.

3. Is failure to pay benefits under the enterprise’s internal regulations upon dismissal considered a violation?

The internal regulations of an enterprise are understood as documents issued by the company to establish mechanisms for managing activities within the company in compliance with legal regulations and the company charter.

Therefore, failure to pay benefits in accordance with the enterprise’s internal regulations upon dismissal is still considered a violation.

However, unlike violations of statutory law, violations of internal regulations do not result in specific statutory sanctions but are entirely subject to agreement between the employee and the employer (in this case, the enterprise).

4. What legal consequences may arise from failure to fully settle employee entitlements after dismissal?

To maximize the protection of employees’ rights after dismissal, current law provides for legal consequences that employers must take if they fail to fully settle employee entitlements.

Pursuant to Clause 2 Article 12 of Decree No. 12/2022/ND-CP and Article 41 of the 2019 Labor Code, the common legal consequences include:

  • Administrative liability: Depending on the number of employees affected, the enterprise may be fined from 1,000,000 VND 20,000,000 VND for acts such as failure to comply with the prescribed time limit for payment of employee entitlements upon termination of labor contracts; failure to complete procedures for confirming periods of social insurance and unemployment insurance contributions and returning original documents retained from employees after termination of labor contracts; failure to provide copies of documents related to the employee’s working process upon request after termination of labor contracts, etc.
  • Civil liability: The enterprise must also reimburse employees for unpaid wages and annual leave payments converted into monetary amounts to ensure their lawful entitlements.

In addition to the above clear legal consequences, enterprises may also suffer reputational damage in the labor market, creating difficulties for future development.

IV. Questions regarding failure to fully settle employee entitlements after dismissal

1. Does an employee have the right to initiate court proceedings if dismissed without full settlement of entitlements?

Disputes regarding failure to fully settle employee entitlements after dismissal constitute a form of labor dispute, and according to Clause 5 Article 180 of the Labor Code 2019: The resolution of labor disputes shall be conducted by competent agencies, organizations, or individuals after a request is made by one of the disputing parties or upon the proposal of a competent agency, organization, or individual and with the consent of the disputing parties.

Therefore, if necessary, the employee may completely initiate court proceedings when dismissed without full settlement of entitlements.

2. Is failure to settle entitlements after dismissal considered an infringement of the employee’s lawful rights and interests?

Pursuant to Point b Clause 1 Article 5 of the Labor Code 2019, one of the employee’s rights is to receive wages based on agreement with the employer; enjoy leave entitlements, annual leave with pay, and collective welfare benefits.

Furthermore, Article 48 of this Code clearly provides the employer’s responsibilities upon dismissal, including full payment of amounts related to the employee’s entitlements and completion of procedures relating to social insurance.

In summary, based on the above analysis, failure to settle entitlements after dismissal is considered an infringement of the employee’s lawful rights and interests.

3. What documents and evidence should an employee prepare to request full settlement of entitlements after dismissal?

To request full settlement of entitlements after dismissal, the employee should prepare the following documents and evidence:

  • Labor contract: It serves as the basis for determining the employment relationship between the parties as well as agreements relating to the employee’s entitlements after dismissal.
  • Dismissal decision: Such a document determines the time of termination of the employment relationship and serves as the basis for reviewing the legality of the dismissal procedure.
  • Payroll records, payslips, or bank statements: These prove the employee’s source of income.
  • Others: Internal company regulations, company charter, etc.

The above are only some suggested documents and evidence that employees may collect to request full settlement of entitlements after dismissal. Depending on the company’s scale and the specific circumstances, the required documents may be more diverse.

4. Is an enterprise exempt from the obligation to fully settle employee entitlements due to financial difficulties?

Pursuant to Clause 1 Article 48 of the Labor Code 2019, where the employer faces economic reasons or financial difficulties, the time limit for payment of amounts relating to employee entitlements may be extended, but must not exceed 30 working days from the date of dismissal.

Moreover, Clause 2 Article 48 of the Labor Code 2019 clearly provides: Wages, social insurance, health insurance, unemployment insurance, severance allowance, and other employee entitlements under collective labor agreements and labor contracts shall be given priority for payment in cases where enterprises or cooperatives cease operations, are dissolved, or become bankrupt.

Therefore, even in cases of financial difficulty, enterprises are still obligated to fully settle employee entitlements.

V. Why you should seek legal consultation from NPLaw regarding failure to fully settle employee entitlements after dismissal

To protect their rights after dismissal, many individuals choose to use legal services provided by lawyers. With many years of experience in advising on failure to fully settle employee entitlements after dismissal, NPLaw has become a reputable choice for many clients.

By using our legal consultation services regarding failure to fully settle employee entitlements after dismissal, you will receive the following benefits:

  • Accurate advice regarding the legal entitlements you are entitled to receive.
  • Support in assessing the legality of the dismissal.
  • Guidance on collecting evidence to improve the likelihood of successfully claiming full settlement of entitlements.
  • Representation in relevant legal proceedings.

The above information is for reference purposes only. For detailed advice regarding your specific case, please contact NPLaw for immediate legal consultation.