Question: What procedures must an employer follow before terminating employees due to organizational restructuring?

Answer

Termination of employment due to organizational restructuring is subject to strict procedural requirements under the Labour Code 2019. Failure to comply with these requirements may result in the termination being deemed unlawful.

Before terminating employees, the employer should:

• Prepare a labor utilization plan in accordance with Article 44 of the Labour Code 2019.
• Consult the employees’ representative organization, if any.
• Conduct workplace dialogue to inform and consult employees on the restructuring plan.
• Publicly announce the labor utilization plan within 15 days after its approval.
• Provide written notice to the Provincial People’s Committee and the affected employees at least 30 days before the proposed termination date.
• Fulfill all statutory obligations upon termination, including payment of job loss allowance (where applicable), outstanding salary and benefits, and completion of social insurance procedures.

Conclusion

By complying with the statutory procedures and maintaining complete documentation throughout the restructuring process, employers can significantly reduce the risk of employment disputes and ensure the legality of the termination.

If your business requires legal advice on corporate restructuring, workforce restructuring plans, employment termination procedures, workforce reduction, or other employment law matters, please contact SB Law. Our experienced lawyers and legal professionals are ready to assist your business in developing practical and legally compliant solutions, ensuring compliance with applicable laws while minimizing legal risks throughout the restructuring process.