Termination of Employment

Termination of Employment

Termination of Employment

The Labour Protection Act B.E. 2541 (1998) (“the Act”) applies to all businesses running in Thailand. The companies that hire felons/worker dating is regulated below Thai law, along with subjects relating to the termination of an employee.

The foremost reasons why Thailand employers may remember payroll cuts through terminating personnel can be summarised in brief as economic, bad performance or misconduct.

It is not unusual within the Thailand prison surroundings that the Labour Court has a tendency to favour the employee and hence it is extremely essential that commercial enterprise proprietors in Thailand adopt correct approaches insofar as termination in their personnel.

Termination Payment Calculation Summary

Termination of Employment

The following is a summary of the quantum of severance pay which should be paid by means of an corporation to an worker below Thai law if Section 118 of the Act is applied. This is calculated in accordance with the worker’s duration of provider.

One hundred twenty days but less than 1 12 months – 30 days pay
1 12 months but much less than three years – 90 days pay
3 years but less than 6 years – one hundred eighty days pay
6 years however less than 10 years – 240 days pay
extra than 10 years – 300 days pay
Exclusions to Payment of Severance Pay

A. Short or Temporary Employment Periods

Labour laws in Thailand manage to pay for business owners positive exclusions from the requirement to pay severance bills if the following conditions observe:
An employee has served the employer for much less than 120 days.
An employee whose employment is stipulated in a settlement set for a specific period and the employment is terminated on the end of that length, if this shape of employment is in compliance with the Thai labour legal guidelines and rules (Section 118 of the Act).

Employment with a specific length is allowed only for the following classes;
Employment on a particular task which isn’t the normal enterprise of the company;
Employment for infrequent or brief work; and,
Seasonal employment.

A written employment settlement is required for the above with clauses stipulating the commencement and completion dates. In addition, all obligations need to be completed inside years.

B. Termination with Cause

Under Section 119 of the Act, there are certain exceptions which permit an organisation to keep away from the payment of severance to an employee and which can be as follows:-

The worker performs dishonestly or deliberately commits an offence against the organisation;
The worker intentionally causes the organization to suffer loss;
The employee reasons severe damage to the organisation as a result of negligence;
The worker violates the organisation’s running policies or regulations or the agency’s orders which can be prison and fair wherein the agency has already given the employee a written caution, besides in a serious situation in which the company is not required to offer a caution;
The worker neglects to complete his or her responsibilities by no longer attending work with out justifiable cause for 3 consecutive running days; and,
The employee has hung out in jail through final judgement, excluding negligence or petty offences.
The exceptions to which employers are accountable for severance pay are stipulated in Section 119 (1) – (6) of the Act.

If the company terminates the employment agreement of the employee for other grounds, the worker is entitled to acquire severance pay.

Nevertheless, to terminate the employment of any worker on the grounds stipulated in Section 119 of the Act, the business enterprise have to provide a letter of termination to the worker with the reasons for termination. Note that during accordance with Thai law, the reasons supplied ought to be real or relate to the movements for termination of employment.

Special Severance Pay

In the case in which an company relocates the place of business in Thailand which impacts the everyday living of an employee or his/her own family, the organization shall notify the employee at least 30 days before the date of relocation. Thai regulation permits the worker to refuse to transport and grow to be entitled to receive severance pay. Failure to notify the worker might also bring about a special severance price in lieu of the development observe of 30 days.

With respect to the termination of the employment on the basis of reorganising the Thailand based totally business, production line, sales or services because of the adoption of machinery or technologies which bring about a reduction of the quantity of employees, the employer has a responsibility in compliance with Thai law (Section 121 of the Act) to inform the worker as well as the labour inspector now not much less than 60 days prior to the pondered date of termination. Failure to do so will bring about a unique severance payment in lieu of the advance notice of 60 days being paid further to the normal severance pay.