Question: I am the Sales Manager and have worked at the company for 5 years, with a salary of 40 million VND/month. Yesterday, the Director called me in to inform me that the company must 'undergo structural changes and apply AI technology,' so my position is no longer necessary, and decided to terminate my employment starting from the beginning of next month. However, I have just discovered that the company is posting a recruitment notice for new personnel, with a job description identical to what I am currently doing but at a lower salary (only 25 million VND). Therefore, may I ask: if I firmly refuse to sign the resignation letter or the mutual termination agreement, does the company have the right to unilaterally terminate my employment?
Answer
According to the regulations in Clause 1, Article 42 of the Labor Code 2019, cases considered as structural or technological changes include:
- Changes in the organizational structure, personnel rearrangement;
- Changes in processes, technology, equipment associated with the employer’s business lines;
- Changes in products or product structure.
Based on the information you provided, it appears that your company's intention to terminate your labor contract on the grounds of 'structural changes and application of AI technology' is well-grounded and in accordance with the regulations in Clause 1, Article 42 of the Labor Code 2019 mentioned above. This means that if your company actually implements AI software and can prove that this action alters the nature of the work, rendering your position no longer necessary, then such reason is recognized by the law. However, when seeking to terminate a labor contract due to structural or technological changes, the company is obliged to strictly comply with the rigorous procedures established by law to protect employees.
Specifically, the Labor Code 2019 stipulates that in cases where structural or technological changes affect the employment of many employees, the company cannot unilaterally make an immediate decision but must formulate and implement a labor usage plan. The process of formulating this plan requires mandatory participation and consultation with the representative organization of employees at the grassroots level. The labor usage plan must contain the following basic contents:
- The names and number of employees to be retained, employees to be retrained for further employment, and employees to be working on part-time basis;
- The names and number of employees to retire;
- The names and number of employees whose employment contracts have to be terminated;
- Rights and obligations of the employer, employee and relevant parties regarding implementation of the labor utilization plan;
- The measure and financial sources to implement the plan.
Once the labor usage plan is adopted, the company must publicly notify the employees within 15 days from the date of adoption. The law also prioritizes the requirement for the company to make efforts to retrain employees for continued employment in new positions. Only when employment cannot be resolved and dismissal is mandatory may the company proceed with this final step, in which case it must pay a job-loss allowance. Specifically, dismissal may only be conducted after consulting with the Trade Union and providing 30 days' prior notice to the provincial People's Committee and the employees.
From the analysis and grounds mentioned above, it is evident that if the company terminates your labor contract due to structural or technological changes but fails to ensure the notice period or strictly follow the procedures mentioned above, it will be considered unlawful termination of the labor contract.
Therefore, you should discuss with the company to find a solution in a spirit of goodwill and amicability. In case you still wish to remain with the company, you should proactively propose that the company arrange a new position suitable for your professional competence instead of agreeing to terminate the contract. Conversely, if you no longer wish to continue working, you should negotiate a mutual termination of the labor contract with the company and request a satisfactory financial support plan, worthy of your contributions over the past time. Negotiation based on mutual understanding and respect will help you protect your rights to the maximum extent without escalating the matter into a tense dispute.
Consultation: Labor Law Services
