Thailand Law Library

by Thailand Lawyer

Chapter 11: Severance Pay

An Employer shall pay Severance Pay to an Employee who is terminated as follows:

1. if the Employee has worked for an uninterrupted period of one hundred and twenty days but less than one year, he or she shall be entitled to receive payment of not less than his or her last rate of Wages for thirty days, or of not less than his or her Wages for the last thirty days for an Employee who received Wages on a piece-rate basis;
2. if the employee has worked for an uninterrupted period of one year but less than three years, he or she shall be entitled to receive payment of not less than his or her last rate of Wages for ninety days, or of not less than his or her Wages for the last ninety days for an Employee who receives Wages on a piece-rate basis;
3. if the Employee has worked for an uninterrupted period of three years but less than six years, he or she shall be entitled to receive payment of not less than his or her last rate of Wages for one hundred and eighty days, or if not less than his or her Wages for the last one hundred and eighty days for an Employee who receives Wages on a piece-rate basis;
4. if the Employee has worked for an uninterrupted period of six years but less than ten years, he or she shall be entitled to receive payment of not less than his or her last rate of Wages for two hundred and forty days, or if not less than his or her Wages for the last two hundred and forty days for an Employee who receives Wages on a piece-rate basis; or
5. if the employee has worked for an uninterrupted period of ten years or more, he or she shall be entitled to receive payment of not less than his or her last rate of Wages for three hundred days, or if not less than his or her Wages for the last three hundred days for an Employee who receives Wages on a piece-rate basis.

Termination of employment under this Section means any act where the Employer refuses to allow an Employee to work without paying Wages on expiry of Contract of Employment or any other cause and includes where the Employee does not work and receives no Wages on the grounds that the Employer is unable to continue the undertaking.

The provisions of paragraph one shall not apply to an Employee whose employment is for a definite period and the employment is terminated at the end of that period.

Employment for a definite period under paragraph three is allowed for employment in a specific project which is not the normal business or trade of the Employer and requires a definite date to commence and end the work, or for work which is seasonal and the employment is made during the season. Such work shall be completed within a period not exceeding two years and the Employer shall make a written contract with the Employee at the beginning of the employment.

The Employer is not required to pay severance pay to an employee whose employment has been terminated under any of the following conditions:

1. performing his or her duty dishonestly or intentionally committing a criminal offence against the Employer;
2. intentionally causing damage to the Employer;
3. causing serious damage to the Employer as a result of negligence;

4. violating work rules or regulations or orders of the Employer which are lawful and just, and after the written warning has been given by the Employer, except in a serious case where the Employer is not required to give warning.

   Such written warning shall be valid for not more than one year from the date of commission of the offence by the Employee;

5. neglecting his or her duty without justifiable reason for three consecutive Working Days regardless of whether there is Holiday in between or not; or
6. being imprisoned by a final judgment of imprisonment with the exception for offenses arising out of negligence or for petty offenses.

Whereas an Employer relocates the place of business to another place and it significantly affects the normal living of an Employee or his or her family, the Employer shall notify the Employee of not less than thirty days prior to the date of relocation. For this purpose, if the Employee refuses to go to work in the new location, the Employee is entitled to terminate the Contract of Employment and receive Special Severance Pay of not less than fifty percent of the rate of Severance Pay he or she entitled to under Section 118.

Whereas the Employer fails to notify the Employee in advance regarding the relocation of the place of business under paragraph one, the Employer shall pay Special Severance Pay in lieu of advance notice at a rate equivalent to the Employee’s last rate of Wages for thirty days, or equivalent to the Wages of the last thirty days for an Employee who is paid on a piece-rate basis.

The Employee has the right to submit an application to the Labor Welfare Committee within thirty days from the date of the relocation for consideration that the case is whether the Employer shall be required to notify in advance or the Employee has the right to terminate the Contract of Employment with an entitlement to Special Severance Pay under paragraph one.

The decision of the Labor Welfare Committee shall be final unless the Employer or the Employee appeals against the decision to the Court within thirty days as from the date of receipt of the decision. Where the Employer brings the case to court, the Employer is required to deposit money with the court equal to the amount to be paid to the Employee who submits the application under paragraph three prior to file the case.

To terminate the Contract of Employment under this Section, the Employee shall exercise his or her right within thirty days from the date of relocation, or from the date of the decision of the Labor Welfare Committee or the judgment of court becoming final.

Whereas an Employer contemplates termination of employment as a result of the reorganization of an undertaking, production line, sale or service due to the adoption of machinery or the change of machinery or technology which causes a reduction of the number of Employees, Section 17 paragraph two shall not be applied, and the Employer shall notify the Labor Inspector and the Employees in advance of not less than sixty days before the date of contemplated termination, giving the date of the contemplated termination, the reasons for termination and a name list of the Employees.

Whereas the Employer fails to notify in advance an Employee contemplated to be terminated, or has notified an Employee of less than the period prescribed under paragraph one, apart from the Severance Pay to be paid under Section 118, the Employer shall also pay Special Severance Pay in lieu of advance notice equivalent to the Employee’s last rate of Wages for sixty days, or an amount equivalent to the Employee’s Wages for the last sixty days to an Employee who is paid on a piece-rate basis.

Whereas Special Severance Pay in lieu of advance notice under paragraph two has been paid, it shall be deemed that the Employer has paid the remuneration in lieu of advance notice under the Civil and Commercial Code.

Whereas the Employer terminates the employment of an Employee under Section 121 and such Employee has worked for uninterrupted period of more than six years, the Employer shall pay Special Severance Pay in addition to Severance Pay under Section 118 of not less than the Employee’s last rate of Wages for fifteen days for each year of employment or of not less than the Employee’s Wages for the last fifteen days for each year of employment for an Employee who is paid on a piece-rate basis. The total Severance Pay under this Section shall not exceed the Employee’s last rate of Wages for three hundred and sixty days, or the Employee’s Wages for the last three hundred and sixty days for an Employee who is paid on a piece-rate basis.