This is a fundamental guide to termination of employment in Thailand.
Employers operating their business in Thailand can terminate the employment of their employees by dismissing them. Termination that is initiated by the employee is known as resignation. Regardless of who initiates the termination, it is important to notify the employer or employee.
Let’s take a look at employment termination and when employees should be notified.
Common termination scenarios
In Thailand, there are two common scenarios that terminations can take place:
- Fixed-period employment
- Ongoing employment
Fixed-period employment means an employment contract which states when the employee’s work period starts and when it will end. The work duration for fixed-period employment must not exceed two years.
Fixed-period contracts can be used for the following types of work:
- A special project that is not within the normal business or trade of the employer
- Work that has a fixed schedule for the start and completion
- Seasonal work which the employee is required
Once the employee has completed the required work duration, the contract cannot be extended, otherwise, the contract will not qualify as a fixed-period employment contract.
Severance pay does not have to be paid when the fixed-period contract has been terminated.
Termination of employment for employment that is not for a fixed period can mean:
- The company prevents an employee from continuing to work and receive a basic pay, whether due to the termination of an employment contract or for any other reason
- The situation where an employee cannot work and be paid because the company can no longer operate its business
The termination of an ongoing employee must be notified by the employer before or on the date the salary is paid. Termination period will start on this date and last until the following pay date.
For example, if a company pays the employee’s salary at the end of each month and plans to dismiss an employee on June 30, the company must notify the employee no later than on May 30. The same will apply if the employee decides to resign.
In the case that companies need to dismiss an employee immediately, the company does not need to wait for the termination date. They can dismiss the employee and give severance pay.
However, there are certain cases which this does not apply to.
Termination reasons under the Labour Protection Act
An employer is not required to pay severance pay to an employee who has been terminated for the following reasons (section 119):
- Performing his/her duty dishonestly or intentionally committing a criminal offence against the employer
- Wilfully causing damage to the employer
- Committing negligent acts causing serious damage to the employer
- Violating work regulations, regulation or order of the employer which is lawful and just for which the employer has already issued the employee a written warning, except in a serious instance for which the employer is not required to give a warning
- Absenting from duty without justifiable reason for three consecutive working days whether or not they are separated by holidays
- Being sentenced to imprisonment by a final court judgement
The circumstances of termination of an employee in Thailand may depend on the type of contract the employee has entered into. Thai labour law protects an employee’s rights when termination is to occur. However, there are some cases that the law allows for the termination of employees.
Feel free to contact Acclime if you have any enquiries regarding the termination of employment in Thailand.