Restrictions on Termination under Article 87 of the Labour Law

Employers in Laos must be aware that, under Article 87 of the Labour Law of 2013, they are prohibited from terminating an employee without prior approval from the district labour office if the individual falls under any of the following categories:

1. A pregnant woman or a woman with a child under the age of one;
2. Undergoing medical treatment or rehabilitation and holding a valid medical certificate;
3. Serving as a representative or head of a trade union within the labour unit;
4. Involved in legal proceedings, detained, or awaiting a court decision;
5. Injured and receiving treatment with a medical certificate, or recently affected by a disaster such as fire or flooding;
6. On annual leave or other leave formally approved by the employer;
7. Assigned to work at another location on behalf of the employer; and
8. Filing a complaint or legal claim against the employer under the Labour Law.

Consequences of Unjustified Termination

If an employer terminates the employment of an individual who falls into any of the protected categories outlined in Article 87, without prior approval from the district labour office, the termination may be considered unjustified.

Under Article 88 of the Labour Law, unjustified termination occurs in the following situations:

1. The employment contract is terminated without sufficient legal reason;
2. The employer abuses its power, either directly or indirectly, or violates the basic rights of the employee to the extent that the employee is unable to continue working;
3. The employer violates the employment contract, and after receiving a formal complaint from the employee or their representative, fails to resolve the issue or take corrective action, thereby forcing the employee to resign.

If the termination is declared unjustified by the labour authority, the employee has the right to request reinstatement. Should the employer refuse to reinstate the employee, they must pay a higher severance allowance for unjustified termination, calculated as:

15% of the total monthly salary prior to termination × number of months worked

In contrast, for a justified termination, such as redundancy, the severance obligation is lower, calculated as:

10% of the total monthly salary prior to termination × number of months worked‍