Dismissing Employees in Thailand: Legal Insights and Best Practices

• Employers in Thailand must follow specific procedures for terminating employment, including providing written notice and severance pay based on the length of service.
• Employers can dismiss employees without severance pay under certain conditions such as dishonesty, causing significant damage, or being sentenced to imprisonment by a final court judgment.
• Thailand has a structured process for resolving employment disputes, including initial negotiations, conciliation proceedings, and arbitration as stipulated by the Labour Relations Act.

As the second-largest economy in Southeast Asia and a major hub for industrial manufacturing, Thailand has long upheld robust labor rights for employees. However, there are instances where employers must, regrettably, terminate the employment of their staff for various reasons.

Recognizing the complexities and challenges involved in this process, the commercial and legal experts at WSR International have prepared this article to offer employers a concise overview of the procedures for termination both with and without cause in Thailand.

Termination of employment without cause

If an employer discontinues employment of an employee without cause, i.e., the business closing, the employee being made redundant, etc., the employer must provide the employee with written notice and the appropriate level of severance pay.

Under Section 118 of the Labour Protection Act, B.E. 2541 (1998), severance pay is defined as money paid to an Employee by an Employer upon the expiry of the Contract of Employment due to a special event as prescribed under the Act.

The calculation of severance pay is made based on the employee’s length of service with the employer as follows:

Termination of employment with cause

Under Section 119 the Labour Protection Act, an employer can dismiss an employee without any severance pay under any one of the following circumstances:

1. performing his/her duty dishonestly or intentionally committing a criminal offence against the Employer;
2. wilfully causing damage to the Employer;
3. committing negligent acts causing serious damage to the Employer;
4. violating work rules, regulations or orders of the Employer which is lawful and just, and after written warning having been given by the Employer, except for a serious case with no requirement for the Employer to give warning. The written warning shall be valid of not exceeding one year from the date when the employee commits the offence;
5. absenting himself/herself from duty without justifiable reason for three consecutive working days regardless of whether there is a holiday in between;
6. being sentenced to imprisonment by a final court judgment.

Employment disputes

As Thailand has strong laws protecting the rights of employees, the Labour Relations Act, B.E. 2518 (1975), as amended, established various procedures relating to disputes between employees and their employers.

The Labour Relations Act sets out various procedures, including (i) labor negotiations, (ii) attempts at resolution between employees and employers, (iii) mediation procedures by Thailand’s Department of Labor Protection and Welfare officials; and (iv) arbitration procedures by the Labor Relations Committee.

If a labor dispute pertains to employment conditions, the employee is required to serve a written notice of their concerns to the employer.

The initial stage of negotiations will be conducted directly between the employer and the employee. Should these negotiations fail, conciliation proceedings will be initiated by a conciliation officer. If an agreement still cannot be reached, the matter may then be referred to arbitration by both parties.

Concluding remarks

Before issuing termination of employment proceedings, an employer should ensure that they are following the relevant regulations. This will ensure that the business is protected from any potential labor disputes.

With experienced commercial and legal experts, WSR Law Group is well positioned to work with businesses to ensure that any termination procedures are done in accordance with the law, ultimately protecting your business.