Juridiques
Everything you need to know about terminating an employee in Thailand
11/11/2022
In Thailand, it is possible for an employer to terminate an employee’s employment at its discretion. However, should the dismissal be made without a statutory cause, as provided under the Labour Protection Act B.E. 2541, the company could be liable for statutory payments to be made to the employee.
In this article, we take a look at the process for terminating an employee in Thailand and what payments an employee could be expected to make.
Points clés
- In Thailand, it is possible for an employer to terminate an employee’s employment at its discretion.
- Si le licenciement est effectué sans motif légal, l'entreprise peut être tenue de verser à l'employé une indemnité légale.
- Should an employer terminate an employee using a statutory cause, the employer is required by the law to notify the reason for the termination through the issuing of a letter of termination of employment.
- Une fois que l'emploi d'un salarié a pris fin, avec ou sans motif légal, le salarié a droit à des indemnités légales.
Quelles sont les causes légales de licenciement d'un employé en Thaïlande ?
Thai law sets out several statutory causes that a company can rely upon when dismissing an employee.
Section 583 of the Civil and Commercial Code states that the following can be considered statutory causes for the termination of an employee who:
- Désobéit délibérément ou néglige habituellement les ordres légitimes de l'employeur.
- S'absente des services.
- Se rend coupable d'une faute grave.
- or otherwise acts in a manner incompatible with the due and faithful discharge of the employee’s duty.
In addition, Section 119 of the Labour Protection Act also stipulates the statutory causes as follows:
- L'accomplissement du devoir de manière malhonnête ou intentionnelle, en commettant une infraction criminelle contre l'employeur.
- Des actes délibérés ont été commis pour causer des dommages à l'employeur.
- Commettre des actes de négligence causant de graves dommages à l'employeur.
- Enfreindre les règles de travail, les règlements ou les ordres de l'employeur qui sont légaux et justes et pour lesquels l'employeur a déjà donné un avertissement écrit à l'employé, sauf dans un cas grave pour lequel l'employeur n'est pas tenu de donner un avertissement.
- S'absenter du travail sans motif valable pendant trois (3) jours ouvrables consécutifs, qu'ils soient ou non séparés par des jours fériés.
- Être condamné à une peine d'emprisonnement par un jugement définitif.
Therefore, should an employee perform an action or deed which satisfies the above requirements, the employer can terminate the employee’s employment using statutory causes.
However, should the employer terminate an employee using a statutory cause, the employer is required by the law to notify the reason for the termination through the issuing of a letter of termination of employment.
Alternatively, a company may inform the reason for termination to the employee at the time of the termination of employment. Failure to do so will mean that the employer will not be able to claim such statutory cause against the employee’s termination.
Statutory Payment
Once the employee’s employment has been terminated, either with or without statutory causes, the employee will be entitled to statutory payments. The details for these payments can be seen here:
Paiements statutaires | Avec motif | Sans motif |
Wage until the employee’s last working day | Oui | Oui |
Indemnité de préavis | Non | Oui |
Indemnité de licenciement | Non | Oui |
Paiement des congés annuels | Uniquement les congés annuels accumulés et non utilisés | Congés annuels accumulés et au prorata |
Autres paiements | le cas échéant | le cas échéant |
Indemnité pour licenciement abusif | At the courts discretion | At the courts discretion |
These statutory payments take the following details into consideration.
Wage
Wage is the compensation that the employer and the employee mutually agree to be payable in return for work done. Any fixed-monthly payment made to the employee would be considered part of the employee’s wages.
Payment in lieu of advance notice
As per Section 17 of the Labour Protection Act, an employer who wishes to terminate the employment must issue a dismissal notice to the employee in advance.
This notification must be delivered to the employee before or on the day of their wage payment. This is required in order for the termination to be effective on the day of the next and final wage payment for the employee.
Essentially, the dismissal notice from the employer must be sent to the employee in advance by at least one cycle of wage payment. E.g. if the wage payment is made on the 26th day of the month, the employer must notify the dismissal to the employee before or on 26 January 2022 and request the employee to leave his job on 26 February 2022.
Indemnité de licenciement
L'article 118 de la loi sur la protection du travail prévoit que l'employeur est tenu de verser une indemnité de licenciement à l'employé dont l'emploi est résilié sans motif, aux taux suivants :
Impôts et paiements mensuels obligatoires :
Années de service auprès de l'employeur | Taux de l'indemnité de licenciement |
120 jours à 1 an | Le salaire des 30 derniers jours |
1 à 3 ans | Le salaire des 90 derniers jours |
3 – 6 years | Le salaire des 180 derniers jours |
6 – 10 years | Le salaire des 240 derniers jours |
10 – 20 years | Le salaire des 300 derniers jours |
Plus de 20 ans | Le salaire des 400 derniers jours |
Paiement des congés annuels
L'article 67 de la loi sur la protection du travail stipule que si l'employeur licencie l'employé sans motif légal, il doit verser une indemnité pour les congés annuels non utilisés de l'employé.
Indemnisation en cas de licenciement abusif
Termination of an employee’s employment without a statutory cause may lead to an unfair dismissal claim being made against the company. Unfair dismissal cases can be brought before the Labour Court even though the employer has made all the required payments, i.e. wages until the last working day, severance payment, payment in lieu of advance notice, and wage for unused annual leave.
Si le tribunal du travail conclut que le licenciement est abusif, il peut ordonner à l'employeur de réembaucher le salarié. Cependant, si le tribunal estime que l'employé et l'employeur ne peuvent plus travailler ensemble, il peut alors ordonner à l'employeur de verser à l'employé une indemnité supplémentaire, à savoir une indemnité pour licenciement abusif.
The Labour Court will come to a judgement on the amount of compensation owed by taking the following into consideration:
- the employees’ age
- Period of employment
- payment for unused annual leave
- compensation for Unfair Termination and hardship and
- the reason for dismissal
Typically, the court normally will grant compensation for unfair termination by determining the employee’s service years at the rate of one month per one service year of the terminated employee. For example, if the employee works with the employer for three years, the Labour Court would order three months’ wages as unfair dismissal damages.
Dismissal procedure in Thailand
The following procedure sets out the preliminary duties of an employer for terminating an employee under Thai law.
Issuing a written dismissal notice
This will act as legal evidence for the dismissal. This notice should be provided in written form and contain all the termination details, the reason for termination and the date of dismissal.
Notifying the employee of the termination in advance
According to Section 17 of the Labour Protection Act, the dismissal notice must be sent to the employee in advance at least one cycle of wage payment. Failure to do so means the employee will be able to claim compensation in lieu of the advance notice.
Paying the required statutory payments
The Labour Protection Act states that the employer has to pay wage and overtime payments within three days after the dismissal date. While any other compensation that is owed such as severance pay, payment in lieu of advance notice, payment for unused annual leave and others has to be paid upon the dismissal date.
Issuing of the withholding tax certificate
As per the Revenue Code, the employer must issue a withholding tax certificate for the compensation paid to the employee upon deduction of the withholding tax from the compensation derived from the dismissal.
Issuing a job certification
Section 585 of the Civil and Commercial Code states that upon being asked by the employee, the employer has to issue the job certificate showing the length of their service years working for the employer and information relating to the nature of their work.
Closing the provident fund (if any)
The employer has to notify the fund manager of the dismissal. The fund manager will then pay out the fund to the employee according to the Articles of Association of the fund within a period of 30 days after the date of membership termination.
Returning the employer’s belongings
In relation to the employer’s belongings i.e. uniform, ID card, health insurance etc., returning such items is subject to the employment contract. Typically these items will be returned to the Company on the last working day.
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Frequently asked questions about work permits in Thailand
Letter to inform staff of employee termination
Notifying the employee of the termination in advance
According to Section 17 of the Labour Protection Act, the dismissal notice must be sent to the employee in advance at least one cycle of wage payment. Failure to do so means the employee will be able to claim compensation in lieu of the advance notice.
Paiement des congés annuels
L'article 67 de la loi sur la protection du travail stipule que si l'employeur licencie l'employé sans motif légal, il doit verser une indemnité pour les congés annuels non utilisés de l'employé.
How much compensation for unfair termination?
Termination of an employee’s employment without a statutory cause may lead to an unfair dismissal claim being made against the company. Unfair dismissal cases can be brought before the Labour Court even though the employer has made all the required payments, i.e. wages until the last working day, severance payment, payment in lieu of advance notice, and wage for unused annual leave.
Dismissal procedure in Thailand
Issuing a written dismissal notice
Notifying the employee of the termination in advance
Paying the required statutory payments
Issuing of the withholding tax certificate
Issuing a job certification
Closing the provident fund (if any)
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