Can unilaterally terminate a labor contract illegally be covered by insurance in Vietnam?

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Currently, there are many opinions that workers’ insurance benefits will not be affected by temporary leave. Is this view right or wrong? Please see the article below.

First of all, it must be affirmed that whether or not an employee is entitled to insurance benefits depends on whether he or she participates in different types of insurance and meets the conditions for each type of corresponding policy. respond no.

Accordingly, in case the employee unilaterally terminates the labor contract illegally (also known as “laying off”), two insurance benefits will be affected, which are: unemployment benefits. and health insurance benefits. As follows:


1. Unemployment benefits

Upon termination of the employment contract, the employee may be entitled to unemployment benefits if certain specific conditions are met. This subsidy is one of the unemployment insurance regimes and is a compensation to support workers during periods of unemployment.

However, Point a, Clause 1, Article 49 of the 2013 Employment Law stipulates as follows:

Article 49. Conditions for enjoyment

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

1. Termination of labor contract or working contract, except in the following cases:

a) The employee unilaterally terminates the labor contract or working contract illegally; […]

Therefore , when employees quit, they will not be entitled to unemployment benefits.

illustration. Can unilaterally terminate a labor contract illegally be covered by insurance?

2. Health Insurance Benefits

Employees participating in Health Insurance (hereinafter referred to as “Health Insurance”) will have the health insurance fund cover the costs of medical examination, treatment, rehabilitation, periodic prenatal care, and childbirth at a specific rate.

When an employee quits his job, the enterprise is responsible for reporting a reduction in labor to the insurance agency. The time it takes for an enterprise to announce a reduction in labor will affect the value of the health insurance card, which means it will affect whether the employee can still receive medical examination and treatment costs from the health insurance fund. Specifically:

If the enterprise reports a reduction in labor before the last day of the month of reduction (month of layoff), the health insurance card is still valid for use in the month of reduction; Therefore, employees will be able to use the card until the end of that month.

If an enterprise reports a reduction in labor after the last day of the month of reduction (the month of layoff), the enterprise must pay the health insurance premium for the months of delayed reduction; Therefore, employees can still use their health insurance cards until the end of the delayed notification months.

In addition, in addition to affecting the two insurance benefits mentioned above, employees who quit will not be entitled to severance pay:

Severance pay is the allowance that an enterprise pays to an employee if the employee terminates the labor contract as prescribed in Clauses 1, 2, 3, 4, 6, 7, 9 and 10, Article 34 of the Labor Code. Started in 2019 and have had a total actual time working for the business for 12 months or more.

Pursuant to the provisions of Article 40 of the 2019 Labor Code  :

Article 40. Obligations of employees when unilaterally terminating the labor contract illegally

1. No severance pay.

2. Must compensate the employer for half a month’s salary according to the labor contract and an amount corresponding to the salary according to the labor contract for days without prior notice.

3. Must reimburse the employer for training costs specified in Article 62 of this Code.

Thus, when an employee takes a leave of absence, he or she will not be entitled to severance pay.

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