How to Claim Your Legal Entitlements When Severance Pay Is Withheld in Vietnam
Many Vietnamese employees assume that once they resign after years of dedication, the company will automatically pay their severance allowance. Unfortunately, reality isn’t so simple. Numerous workers leave with nothing, while some employers treat severance as an optional cost to cut. In the following case, Client A—a loyal employee with nearly 6 years of service—had no choice but to file a lawsuit to reclaim her lawful entitlements. Thanks to the professional legal support from DEDICA, she successfully recovered her severance pay and accrued interest.
When Severance Isn’t Paid Voluntarily – What Should Workers Do?
Complying with legal resignation procedures and properly handing over tasks doesn't guarantee that you'll receive severance pay—especially if the employer intentionally delays payment. Client A is a real-life example: despite following the process, her company showed no intention of paying what was contractually agreed. Even worse, they had previously acknowledged the debt!
In such situations, it is critical to collect all relevant evidence: employment contracts, termination notices, handover records, and written confirmations of debt. Then, seek timely legal assistance to file a claim. Don’t let your rights fade away due to hesitation or lack of legal knowledge.
What Is Severance Pay and When Are You Entitled to It?
According to Vietnam's 2012 and 2019 Labor Codes, employees who have worked at least 12 months and terminate their contracts lawfully (i.e., not dismissed or unilaterally quitting unlawfully) are entitled to severance pay. The minimum amount is half a month's salary for each year of service, excluding time covered by unemployment insurance.
However, businesses can agree on a higher severance in labor contracts, which was the critical point in this case.
A Deal Is a Deal – Employers Must Honor Their Commitments
In this case, Client A signed an indefinite-term contract stating: "Employees will receive one month’s salary per year of service upon resignation." After nearly 6 years, she submitted her resignation, completed all handovers, and signed a confidentiality agreement.
The company issued a termination decision and promised to settle all benefits. However, they only paid her salary, remaining silent about the severance—despite signing an acknowledgment of over VND 82 million (after tax: VND 74 million). They failed to pay, prompting Client A to pursue legal action.
DEDICA Law Stands by Clients to Protect Their Rights in Court
Many employees fear lawsuits due to complexity or cost. But with the right guidance, the law becomes a powerful tool for justice. DEDICA supported Client A through a typical labor dispute, proving that employees are never alone if they prepare properly and follow a clear legal strategy.
We helped Client A organize and present all necessary legal evidence, including:
Labor contract with clear severance provisions
Lawful resignation records
Completion-confirmed handover minutes
Internal memos confirming debt acknowledgment
Despite not denying these documents in court, the employer refused to pay. This led to an official trial and judgment.
The court ruled that the company had seriously violated the contract and that Client A’s claims for severance and interest were fully justified. The company was ordered to pay over VND 76 million, including late payment interest.
This was more than just a legal victory—it was a win for persistence and transparency. It also sends a clear warning to employers who disregard employee rights and contractual commitments.
Lessons Learned From a Successful Lawsuit
From this case, DEDICA draws key legal takeaways for both employees and employers:
For Employees:
Always read your employment contract carefully, especially benefit clauses.
Keep thorough records: contracts, decisions, payslips, emails, handover notes.
If your company delays payment, don’t hesitate—take legal action.
For Employers:
Build transparent HR processes and respect contractual obligations.
Don’t delay payments as a way to retain staff or cut costs—it leads to legal risks and reputational damage.
At DEDICA, we understand the challenges workers face when handling disputes alone. With proven success in defending clients’ rights, our lawyers are ready to support you—no matter how difficult your case may seem.
Are you facing issues with severance or contract violations?
Contact DEDICA for strategic legal guidance and full rights protection.
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