In Laos, the Amended Labour Law No. 43/NA dated 24 December 2013 stipulates the legal requirements for notice periods during employment termination. These requirements vary based on the type of employment contract.

Indefinite-Term Contracts

For indefinite-term employment contracts, either the employer or employee can terminate the contract by providing written notice to the other party. The minimum lead time for this notice depends on the employee's skill level:

• Unskilled Labor: A minimum of 30 days' advance notice is required.
• Skilled Labor: A minimum of 45 days' advance notice is required.

Alternatively, the employer can opt to pay the employee a sum equivalent to their wages during the notice period instead of providing written notice.

Fixed-Term Contracts

The Amended Labour Law does not specify a mandatory notice period for fixed-term contracts. The notice period for termination of a fixed-term contract is typically agreed upon within the employment contract itself.

However, employers must provide at least 15 days' written notification if they choose not to renew a fixed-term contract upon its expiry.

In Laos, the Amended Labour Law No. 43/NA dated 24 December 2013 stipulates severance pay entitlements for employees whose contracts have been terminated. The entitlements vary depending on the reason for termination.

Justified Termination

If an employee is dismissed for valid reasons such as consistent underperformance, repeated violation of company rules, criminal activities related to the job, or absence without permission for a stipulated period, they are entitled to severance pay.

Calculation

In such cases, severance pay is calculated at 10% of the employee's last received salary multiplied by the number of completed years worked.

Unjustified Termination

In the event of an unjustified termination, where an employer terminates an employee without lawful cause, the severance pay entitlement increases.

Calculation

Here, severance pay is calculated at 15% of the employee's final salary multiplied by the number of completed years worked.

Exceptions to Severance Pay

However, there are specific instances where employees are not entitled to severance pay. These include during the probationary period, resignation by the employee, retirement at the standard retirement age, expiration of a fixed-term contract, and termination due to force majeure.

Additional Rights Concerning Severance

The Amended Labour Law also provides certain rights for employees regarding severance pay. Employers must pay severance within 45 days of the termination date and they are obligated to maintain records of severance pay disbursed.

The termination process of employees in Laos is governed by the Lao Labour Law No. 43/NA dated 24 December 2013 (Amended Labour Law).

Types of Termination

There are three main types of termination:

• Mutual Agreement: Both the employer and employee can mutually agree to terminate the employment contract. This agreement must be in writing.

• Unilateral Termination by the Employer: The employer can terminate the employment contract for justified reasons, including the employee's failure to perform job duties, the employee's violation of company regulations, or if the business is closing down.

• Unilateral Termination by the Employee: An employee has the right to resign, providing they give the employer an appropriate notice period based on their skill classification.

Termination Procedure for Employers

The termination procedure for employers involves several steps:

1. Notice of Termination: Employers must provide written notice of termination to the employee. The notice period varies based on the skill level of the employee.

2. Consultation: If the termination involves multiple employees, the employer must consult with the relevant labor union, employee representatives, and the Labor Administration Authority (LAA) in advance.

3. Reasons for Termination The employer must provide a clear and justified reason for the termination to the employee in writing.

Additional Considerations

There are also additional considerations to keep in mind:

• Documentation: Employers should thoroughly document the entire termination process for potential future disputes or audits.

• Probationary Period: Termination procedures may differ for employees within their probationary period, particularly with respect to notice periods.