: Regulations on Employment Contract Termination in the Age of AI-Driven Workforce Replacement: Comparative Insights and legal recommendations for Vietnam

Abstract

The Fourth Industrial Revolution, particularly the rapid advancement of artificial intelligence (AI), is profoundly transforming the global labor market. In Vietnam, labor-intensive industries such as textiles, manufacturing, and assembly are significantly impacted as AI and automation replace workers. Although the 2019 Labor Code includes provisions for terminating labor contracts due to technological changes (Articles 42 and 44), it does not specifically address cases where AI replaces human labor, creating legal gaps and risking violations of workers' rights. The current legal framework reveals several shortcomings: a lack of mechanisms for retraining, weak oversight, the absence of a transition support fund, and insufficient penalties for violations. Drawing from international experiences (Germany, Japan, the U.S., South Korea, and Singapore), practical solutions include establishing labor transition funds, mandating retraining programs, and strengthening enforcement mechanisms. This paper proposes refining Vietnam's legal framework by clarifying the definition of technological changes, requiring businesses to implement retraining programs, establishing a labor transition support fund, and promoting lifelong learning strategies. Coordination between the state, businesses, and workers is essential to ensure a balanced approach that protects workers' rights while fostering a sustainable and equitable labor market in the digital age.