Công văn 4663/LDTBXH-LDTL

In response to Dispatch No. 04/2014/HR dated April 15, 2014 of Mizuho Bank requesting guidelines for some regulations of the Labor Code, the Ministry of Labor, War Invalids and Social Affairs hereby provide some instructions below:

1. Working duration to calculate severance pay

According to Article 106 of the Labor Code, when the employment contract is terminated under Clauses 1, 2, 3, 5, 6, 7, 9, 10 of Article 36, the employer must provide severance pay to the employee if such employee has worked full time for 12 months or longer. Each working year is equivalent to half a month’s salary. The duration of work for calculating severance pay is the total period the employee has worked for the employer minus (-) the time of unemployment insurance prescribed by the Law on Social insurance and the period of time over which severance pay is provided by the employer.

Pursuant to Clause 2 Article 1 of the Government's Decree No. 100/2012/NĐ-CP dated November 21, 2012, if an employee is on maternity leave and receives social insurance payout instead of monthly salary, such employee is not considered a subject of unemployment insurance during that period.

Thus, in case an employee who has worked for 12 months or longer under the employment contract lawfully terminates the employment contract, the employer must provide severance pay as prescribed. The duration of work for calculating severance pay is the total period over which the employee has worked for the employer, including maternity leave period.

2. Pay for overtime night work

According to Article 97 of the Labor Code, employees who work overtime at night shall be paid as follows:

Assuming the daily pay rate on normal working day is A:

- The employee working overtime at night on a normal working day will be paid at least:

150%A + 30% A + 20% x A = 200%A

- The employee working overtime at night on weekly day off will be paid at least:

200%A + 30% A + 20% x (200%A) = 270%A

- The employee working overtime at night on a public holiday or paid day off will be paid at least:

+ If the employee receives monthly salary:

300%A + 30% A + 20% x (300%A) = 390%A

+ If the employee receives daily salary: In addition to an amount equal to 390%A, the employee will receive salary of the public holiday or paid day off as prescribed.

Sincerely,