1. Wrongful termination

Articles 36 and 37 of the Labour Code set out an exhaustive list of termination grounds, each with its own notice period — 30 days for fixed-term, 45 days for indefinite-term contracts. Disciplinary dismissals require a formal hearing, trade union invitation, and recorded minutes. Skip any step and the termination is unlawful.

Under Article 41, the employee is entitled to reinstatement, back pay, and at least two months' salary. Settlement costs for a botched termination regularly reach 6–12 months' salary.

Fix: Before terminating, confirm three things: the ground is in the Labour Code, the notice period has been given, and the process is fully documented.

2. Forgetting social insurance for foreign employees

Many FDI companies still assume foreign employees are exempt. They are not. Since December 2018, Decree 143/2018/ND-CP requires foreign employees with a work permit and a labour contract of 12 months or more to participate in compulsory social insurance — including retirement, health insurance, and occupational accident insurance.

Non-compliance creates back-payment liability with interest, and the Vietnam Social Insurance Agency audits regularly.

Fix: Audit your foreign employee roster. Enrol anyone who qualifies and back-pay any shortfall before the next audit cycle.

3. Failing to register internal labour rules (nội quy lao động)

Under Article 119 of the Labour Code, any employer with 10 or more employees must register internal labour rules with DOLISA. Unregistered rules are unenforceable — meaning any dismissal based on them is unlawful and exposes the company to reinstatement or compensation claims.

Fix: Register immediately. Re-register whenever you amend. Keep the DOLISA receipt on file — inspectors ask for it.

These are not edge cases. Each one is fixable in weeks — but left unchecked, each one compounds.

How are your HR teams handling termination procedures and foreign employee insurance enrolment this year?

By Diep Hoang, Founding Partner, Dilinh Legal

This article is for general information only and does not constitute legal advice. For further information, please contact Dilinh Legal at contact@dilinh.com | +84 (28) 73000864 | dilinh.com