Occasionally an employer-employee relationship does not work out. In fact, sometimes the relationship degrades to such a degree, that one or both of the parties wishes to terminate it immediately. In general, for the employee this is simple. Unless the employee’s contract contains a provision which otherwise regulates the employee’s self-termination, he or she may simply quit by giving notice of termination of the employment at least one full wage payment cycle before such termination is to take effect. However, for the employer who wishes to terminate an employee the situation is not so simple.
The Labor Protection Act (1998)(the “LPA“) was largely enacted to protect employees whom it assumes are generally in a less powerful position than their employer and, therefore, in need of such protection. However, the LPA does allow an employer to terminate an employee for “cause” as the LPA defines such — in other words, any one of the following limited reasons:
- the employee has worked dishonestly or intentionally committed a criminal offence against the employer;
- the employee intentionally caused damage to the employer;
- the employee committed a negligent act that caused serious damage to the employer;
- the employee violated the employer’s work rules, regulations or any lawful and fair order of the employer, and the employer given the employee a written warning of such violation within the previous twelve months. (Note however, where the violation is particularly egregious, the employer is not required to give such a warning);
- the employee was absent from work, without justifiable cause, for at least three consecutive working days; or
- the employee was sentenced to imprisonment by a final court judgment. However, if the imprisonment is for an offense of mere negligence or a petty offense, that offense must have caused damage to the employer for this reason to qualify.
It is very important to note that if employer does terminate an employee for such “cause” the employer must also notify the employee of the reason the termination at that time — if not, the employer will not be permitted to claim that the termination was for “cause” and the termination will be treated the same as if it were without cause.
However, if an employer terminates an employee for any other reason than “cause” as defined above by the LPA, the employer may be held liable for any one or more of the following:
- “Payment in lieu of notice”
Section 582 of the Civil and Commercial Code of Thailand, requires an a party to an employment agreement to give the other party notice of termination of the employment at least one full wage payment cycle before such termination is to take effect. However, notice need not be given more than three months prior to the termination being effective (where, for example, a wage cycle was longer than three months).
In other words, if for example, an employee is paid at the end of every month, it is 12 March, and the employer wishes to terminate the employee as soon as possible without such liability — then, the employer cannot terminate the employee at the end of March because that would not be one full wage cycle. Thus, the earliest the employer could properly terminate the employment without this liability would be 30 April — even if the employer gave the employee notice on 12 March. Note however, the employer could wait until 31 March, to give notice of termination effective 30 April, without being liable. If however, in our example, the employer did give notice on 12 March of termination on 31 March, the employer would then be liable for a full month of pay because the employee should have been allowed to work until the end April.
- “Severance Pay”
Pursuant to Section 118 of the LPA if an employer terminates an employee without “cause” as defined by the LPA, the employer may be held liable to the pay “severance” pay to employee in the following amounts depending on the duration of employment.
| Employment Term | Severance Payable =
Amount Equal to these Days at the Employee’s Most Recent Wage |
| 120 days ≤ 1 Years | 30 |
| 1 ≤ 3 Years | 90 |
| 3 ≤ 6 Years | 180 |
| 6 ≤ 10 Years | 240 |
| 10 Years or more | 300 |
- “Unfair Dismissal Compensation”
Apart from the above-mentioned employer liabilities, if the termination of employment is found to be “unfair”, under Section 49 of the Establishment of and Labor Court Procedure Act (1979) (“Act”) the court may also require the employer to pay any amount of additional compensation to the employee for such unfairness that the court deems appropriate.
The Act does not explicitly define what the term “unfair” means. That said, the following summaries of actual labor court rulings provide some guidance as to when such unfair is and is not likely to be found:
A. an employer’s termination of an employee was found to be unfair;
1. an employee’s husband was working for other competitive company;
2. an employee worked as a technician in a field which required a legal license but employer discovered that employee’s license was expired and terminated the employee. Many of the employee’s co-worker technician’s licenses were also expired too, but they were not terminated because of that;
3. an employer’s business’s annual profit decreased compared to previous years and yet remained profitable but in response, the employer terminated an employee; and
4. an employee was gambling outside of working hours, and the applicable employer work regulations stated that the punishment for such conduct would be a financial penalty, but instead the employer terminated the employee.
However,
B. an employer’s termination of an employee was found not to be unfair, where:
1. an employee’s performance was not sufficient during the employer’s “probation period”
2. an employee was terminated in line with the employer’s work regulations retirement conditions; and
3. an employer’s business was unprofitable for successive years and the employer had taken several steps to alleviate the costs of employing the employee (e.g. proffering a volunteer resignation option) but the employer eventually was forced to terminate the employee who did not agree to resign in order to save the business as a whole.
I am from India, I am working as a Engineer in Thailand last 3 month. Now I want to leave the Company due to personal reason, but still I am in Probation period. Is there any issue if I will give resignation?
Under Thai labor law no. But you should check you employment contract to be sure there is no provision that may adversely affect your resignation.
I am working since 2 years 11 month ( 7.Jan 2012 ) with my employer. Now they want me to leave and accept 90 days severance pay. The contract was signed on 22.Dec 2011 ). How can I get the 180 days severance payment ?
Request your former employer to pay the required amount. If they do not, file a case against them in Thai labour court.
I am working as a teacher for 7 years in a private school in Thailand. I have 2 Thai teachers partner while teaching in the class. Recently, the school renewed my visa not knowing that my 1 Thai teacher partner gave me a failing grades while my other Thai-partner and my academic head in our building gave me a nice result but because of the failing score given by the other Thai teacher, they terminated me without any prior written notice. If I didn’t asked them about the result of the evaluation last June 10,2016 , they won’t tell me that I will be terminated from the school and will stay until the end of the month of June. Do I have fight for this?
In a case this complicated and fact dependent you really need to sit down with a competent attorney to evaluate.
Hello,
I am from Canada and been working for a company in Thailand for 2 months. The probation period is 3 months and I have recently been let go due to “no reason” aside from the fact that the company is downsizing.
Am I eligible for “Unfair Dismissal Compensation”?
although in the employee agreement it is stated:
“Without cause, the Employee may terminate employment upon an advance written notice to the Employer at or before any time of payment, which shall take effect as of the following time of payment. The Employee
may be required to perform his/her duties and will be paid the regular salary to the date of termination but
shall not receive severance allowance.”
I look forward to hearing back from you. Thank you in advance,
Jessie
That all depends. You should contact a competent attorney to advise you on this.
i am foreigner, i am working with a Hospital since may 2012 ( 4 and half year alraedy ) as coordinator with yearly part time contract.
i mean every year the company issue 1 year contract.
my question is : i am entitled to receive severance payment in case the company not renew it anymore ?
You should read our latest article on this blog being posted today.
Still active on this web site
I resigned my position 2 weeks early on a three-month contract. Send the resignation letter to the person who hired me and the personnel director. They claim, they can reserve the right to” withhold all accrued benefits, during the period. Code for they are not going to pay my days of working for the month.
Not sure what your question is…?
I’m from the Philippines and I have retirement visa and was hired as a private teacher. My boss owns a company but won’t give me a work permit. My salary increases by one thousand baht every year but this time she said I can’t have increase anymore because of the extra pay I get ie housing and meal. I also do housework and helps on some chores at the office. Most of the time we go home late but I don’t complain. Am I not entitled to get a higher wage every year? Thank you
If you have a retirement visa and are working, you are doing so illegally. So, although Thai labour law still applies to you, you should probably first consider that. And then speak to a competent lawyer you have engaged.
Hello. I have a company for 6 years with 6 employees. I want to close the company, if the closing notified in advance to employees can avoid severance payable?
No.
Hi, What is we hire independent contractor let’s say for a period of 1 year. If we want to terminate the contract prematurely, should we pay the contractor severance or do we need to honor the contract i.e pay until contract end period?
If you terminate the contractor’s contract prematurely/without cause under the contract or law, you are liable for at least the remaining value of the contract price.
I am a teacher i worked in a school for more than 10 years they terminated me due to several absences but this is because of sickness but ihave provided doctors certificate for some absences do i have the right to ask separation pay.
Sorry to hear that. In a case this complicated and fact dependent you need to directly consult competent legal counsel.
Is Section 121 applicable or not?
I am locally hired westerner working for an American multi national in Bangkok since October 2000. My job responsibilities are to advice and implement finance and commercial reporting business solutions, support finance users, manage support contractors.
The company has soon completed moving most financial proceses to a regional shared service center iin Jakarta. I led the technical side of that move in Thailand.. The change is a global initiative to consolidate “back office processes = job has moved to another country not disappeared
My manager has now advised me that it will be difficult for him to motivate keeping me as half my job is no longer necessary and we are discussing options.
Can section 121 be applicable if I am terminated? Is this a type of reorganisation covered by section 121?
Thank you
I joined a company on 1st September 2016. Now I am told that my last date is 31 August 2017. How many months compensation can I claim. (Can this period be called one year completed ?) . Can I also claim for Unfair Dismissal ? How many months wages.
Thanks
Hi.
I have been working in a hotel for 8 years and 1 month. 3 weeks ago my staff made a mistake (she did not send stop sales notice to all the agents and one agent sent a booking which caused overbooking) and since I am her boss, I got punished for “unsupervising” my staff. I signed the warning letter plus I will not receive service charge in July.
And then, few days ago my boss asked me to issue a promotion to 5 agents. The owner of the hotel called me and said the instruction of the manager that was sent to me by email was wrong. The owner told me brief info about what she wants. Right after I talked to the owner, I called my manager and told her abour the revisions. She said, the owner also talked to her about the same case. I prepared all the papers again, checked the details with my manager if all are ok. After an exchange of about 3-5 emails, finally my Manager approved the papers and approved me to send the promotion to the agents.
Aftef 3 days the owner came to me again and said the paper was wrong again. She was furious and yelling. I explained to the owner about the instructions of my manager and that I have supporting emails to show that what I issued was discussed with my manager, and was approved by my manager. My concerns now are:
1) Will this problem reflect to my first “warning letter” probation even if the case is not the same as the first offense.
2) If the employer fire me because of the wrong promotion that I prepared, is it a valid reason for termination. Does it fall under “termination with cause” clause.
3) If the employer terminates me, am I entitle of any severence pay atleast 240 days since I have been there for 8 years.
4) Is it better to resign and save my self-respect or wait for the company to fire me so I can get severence pay, should there be any.
I will appreciate your advise.
Just to add on:
The owner’s style is to deduct or cut full month (or even more than 1 2 3 months) service charge if the staff made a mistake. Mistakes for example are: you loaded up the wrong rates to the system, you did not notify the agent that the hotel is full, the guests checked out and they dont pay, you quote the wrong rate to the agent… anything that might cause loss of revenue. Or even when you didnt scare the rats away from the hotel, you still get punished.
Main reason why I brought up # 3. If it better to resign and not receive anything but atleast keep my self-respect, or wait for the company to terminate my contract and get a severence pay – hopefully.
Tough as it is. But It causing me sleepless nights. The pressure is too much that anythime a mistake is done, no matter how simple it is, I get punished.
If employee resigns after 4 years and has accumulated annual leave is the employer required to pay the accumulated leave. I held senior management position
If employee leave on your own accord, no severance pay is due?
Hi,
Our company is planning to opt for downsizing due to financial reasons. i was made to understand that the employers must provide a valid cause for terminating an employee. In addition, employers must give notice of termination at least one full wage payment cycle before the termination takes effect plus the severance payment.
I need to be clear on the notice of termination:
If the employee’s contract specifically states that their notice is 3 months, does the company only pay for 3 months notice or 4 months notice i.e. 3 +1.
Thanks in advance.
Want to cancel my contract , since going to move to Europe. Should i expect any problems with and will it be fast ?
Hello,
I’m starting a new company as a permanent employee. The employment offer says that “Except for probation period, The employer or employee may terminate this agreement with 1 pay period notice”. It also states that during the probationary period of 119 days that the employer can terminate with minimum notice without cause. It says nothing about what the employee can do during the probation period (Etc termination). Does this mean I wouldn’t be able to terminate as an employee during the probation period if the job is not right fit?
I need support:
I am working through a local company at Thailand and i have valid work permit to support Local company client, but very socked that current month Dec-22 i just get informed that my contract will not extend by their client and i havent informed minimum 30 days ago, now i want compensation. Am i right to go through legal action as per Thailand LAW.
Hello,
I’m married since 7 years with my Thai wife, but we know each other more than 20 years. My wife works on a catamaran for almost 10 years now. The boat belongs to a Thai company Ltd. and the boat owner is a foreigner and my wife is a registered 2% shareholder in the company. The boat crew consists of a licensed captain, 3 boat boys and my wife. The boat owner now has sold the boat and informed the crew about the employment termination in a meeting, recently held at Jan 12, 2017. Termination of the employment will be on Jan 15, 2017 and as a “compensation” he offers to pay salary for one more moth to the crew and 3 more month for my wife. As far as I’m informed about the Thai labor law, this should be a case for the court.
Remark: The sales transaction has almost been finalized and the boat owner will soon receive full payment for the boat. Due to the fact that he is foreigner, he might leave the country after full funds transfer. Kindly advise about the steps to be taken by the crew, while avoiding to pay high lawyer’s fees at first. Many thanks.
Sorry: Termination of the employment will be on Jan 15, 2017 – should read Feb 15, 2017
We are a foundation in Thailand and we want to terminate a Thai employee because there is not enough work to support having a full time person doing this job. The worker is paid monthly and has worked for our foundation for 2 years and 10 months. What is the termination notice required in this situation? What is the amount of severence pay we must pay?
Hello
Is there a time limit on filing a case in the labor court. I was terminated without cause (after working for 2 years), but had to go home overseas for family issue for 3 years, and have now just come back? Is it too late to file a case? Also where is the labor court? Thanks
I resigned from my job by giving a notice period of 2 weeks back in Jan 2018. On the contract it stated 30 days of notice, but I was never given a contract to sign so I never signed any.
I ended up leaving about 4 days early than the intended 2 weeks notice because I found out that If I didn’t give 1 month notice, they would deduct my salary in half. I didn’t want to work for half a month and only get that money deducted in half. E.g. I work for 14 days, they only pay me for 7.
They deducted my salary in half so I failed a case with the labour department. They agreed to pay me, but they lied to the department of labour by saying my salary is 27500 Baht instead of 35000 Baht so I didn’t accept it. The 27500 baht was my salary when i was still under probation and the 35000 baht was what i received after my probation and it was my latest salary figure.
Now the case will proceed to the labour court, what are my options? Will they sue for me “damages” because I leave early? Do note that my position is not a senior/manager position.
How does one file a case against a school for unfair dismissal in Thai labour court?