HOW MUST AN ENTERPRISE ENSURE THE RIGHTS AND BENEFITS OF EMPLOYEES WHEN TERMINATING THE OPERATION OF A BRANCH?
Question: If my company closes a branch, how should the rights and benefits of employees working at that branch be handled in accordance with the law?
Answer
Pursuant to Clause 3, Article 213 of the Law on Enterprises 2020, in the event that a company terminates the operation of one of its branches, the company remains responsible for fulfilling all legal obligations related to that branch, including:
- Performing contractual obligations under agreements previously entered into;
- Settling outstanding debts, including tax obligations;
- Ensuring the lawful rights and entitlements of employees working at the branch are fully resolved.
Specifically, the company must choose and implement one of the following two options regarding the employees:
- Continue employing the workers at the company or another affiliated unit; or
- Fully settle the lawful rights and entitlements of the employees in accordance with labor law regulations.
Note: The company should carefully review all labor contracts, collective labor agreements (if any), and internal policies to ensure that the termination of the branch's operations does not result in legal risks related to employment matters.
