In Thailand, employers must have valid reasons to terminate an employment relationship. Termination is considered lawful under serious grounds, including:
1. Dishonest acts or criminal offenses against the employer.
2. Intentional actions causing losses to the employer.
3. Negligence resulting in severe losses for the employer.
4. Violation of work rules or regulations after a written warning, except in severe cases.
5. Absence from duty for three consecutive workdays without reasonable cause.
6. Imprisonment for offenses other than petty offenses or negligent acts causing damage to the company.
Termination based on these grounds can be done without statutory severance pay. However, without these serious grounds, termination may require statutory severance pay, which must be well-documented to avoid claims of unfair termination.
Thai labor law does not mandate additional considerations for redundancies beyond statutory severance pay based on years of service. Employers must ensure compliance with standard severance provisions.
When terminating employment due to a business sale, the same rules for statutory severance pay and fair treatment apply. No special additional considerations are required.
The Labor Protection Act mandates an advance notice period of at least one full pay period. For terminations due to improvements in operations or technology, a 60-day notice is required. Contractual notice periods longer than statutory periods take precedence.
Employers can terminate employment immediately by paying the wages for the statutory or contractual notice period. This allows immediate termination without breaching notice period requirements.
Employers can place employees on garden leave during the notice period, meaning they continue to pay the employee while requiring them to stay at home and not work.
To terminate employment effectively, employers must:
1. Observe statutory or contractual notice periods or pay in lieu.
2. Pay wages for the last payment period and unused leave entitlements.
3. Make statutory severance payments.
4. Provide a certificate of employment.
Non-compliance with termination procedures can result in imprisonment up to six months, fines up to THB 100,000, or both. Employers may also face default interest on unpaid amounts.
Collective agreements may impose additional termination requirements, such as mandatory investigations or extra compensation packages. Employers must adhere to these stipulations.
For terminating members of an employees' committee, employers must obtain permission from the labor court. Violating this requirement can lead to imprisonment, fines, or both.
Termination of employment due to discrimination or harassment is considered unfair. Courts may award compensation or require reinstatement of the employee.
Pregnant employees, union members, and those involved in collective bargaining or legal proceedings related to labor issues are protected from termination.
While Thai law does not specifically protect whistleblowers from termination, certain legislation may provide protection if they assist authorities in investigations against their employer.
Employers can terminate employment due to financial difficulties, which the Supreme Court considers a reasonable ground. However, negotiating changes to employment terms without termination is preferable to avoid severance pay and unfair termination claims.
AI in employment decisions can lead to discriminatory outcomes. Employers must ensure AI systems do not perpetuate biases based on gender, ethnicity, or other protected characteristics.
Employers must provide statutory severance pay, payment for unused leave, wages for the notice period, and other promised benefits. Severance pay rates are based on the employee's length of service.
Employers and employees can agree to terminate employment mutually, with the employee waiving rights in return for a payment. Such agreements should be free from coercion to avoid unfair dismissal claims.
Non-competition clauses in employment contracts are enforceable if they protect the employer's legitimate business interests and do not impose unreasonable restrictions on the employee.
Employers can require confidentiality of business information through contractual obligations. Unauthorized disclosure of trade secrets can result in legal action under the Trade Secret Act and Penal Code.
Employers are required to issue a certificate of employment upon termination, stating the length of service and job description. Negative comments about the employee should be avoided.
Employers often face legal risks if termination grounds are not well-documented. Preparing reasonable grounds for termination and considering mutual separation agreements can mitigate these risks.
Currently, there are no significant legal changes in Thailand affecting employment termination practices.
By understanding and adhering to these guidelines, employers in Thailand can navigate the complexities of employment termination while minimizing legal risks and ensuring fair treatment of employees.
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