Regulations on temporary business suspension
VGP - An enterprise may temporarily suspend its business but must notify the business suspension or resumption of its business no later than fifteen days before the date of temporary suspension or of resumption of its business.
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Question: Mr. Henry Chau, a foreigner, is running a business in Hà Nội. He wants to temporarily hang up his business. What are the regulations on temporary business suspension and severance allowance that he must follow?
Answer:
1. Regulations on temporary business suspension
Under Article 156 of the Law on Enterprises, during temporary suspension, the enterprise must pay in full any outstanding amount of tax, continue to pay debts and finalize the performance of contracts signed with customers.
Item 3, Article 57, Decree 43/2010/NĐ-CP, dated April 15, 2010 on business registration said that business suspension is able to last for two years in maximum.
2. Regulations on severance allowance
Article 17 of the Labor Code stipulates that the employee who has been working regularly for a business for one year or more loses his/her job due to the restructuring of the business or the change of technology, the employer has the responsibility to retrain him/her in order to employ him/her in a new job.
If no new job can be created and the employee has to be laid off, his/her employer has to pay him/her a severance allowance at the rate of one month's salary for every year of service, but the amount shall not be less than the value of two months of his/her salary.
Article 31 of the Labor Code prescribes that in case of a merger or a division of the business, or assignment of ownership, managerial power or the right to use the property of the business, the succeeding employer has the responsibility to honor the labor contract with the employee until the two parties agree to amend or terminate the labor contract or to sign a new contract.
The employer is entitled to unilaterally terminate the labor contract in regulated circumstances, according Article 38 of the Labor Code.
Upon the termination of a labor contract with an employee who has worked regularly at the business, office or organization for more than one year, the employer has the responsibility to pay the employee a severance allowance representing one half month's salary for every year of service, plus wage subsidies (if any).
Severance allowance is calculated in line with Government’s Decree 39/2003/NĐ-CP, dated April 18, 2003 and Circular 39/2009/TT-BLĐTBXH, dated November 18, 2009 of the Ministry of Labor, War Invalids and Social Affairs./.
