Navigating Employee Termination and Notice Periods in Thailand

Thailand's labor protection framework provides clear guidelines for employee termination, notice periods, and severance payments. Understanding these regulations is essential for multinational companies operating in the Thai market to ensure compliance and maintain positive employee relations.

Understanding Notice Period Requirements

Under Section 17 of the Labour Protection Act, employers must provide termination notice at least one pay period in advance. The notice must be delivered on or before the current payday, with termination taking effect on the subsequent payday.

For instance, if salaries are disbursed on the 26th of each month, an employer must notify the employee of termination by January 26th, with the termination becoming effective on February 26th.

Severance Payment Structure

Section 118 of the Labour Protection Act mandates severance payments for employees terminated without cause. The compensation scale varies according to length of service:

Service Duration	Severance Payment
120 days to 1 year	30 days' final salary
1-3 years	90 days' final salary
3-6 years	180 days' final salary
6-10 years	240 days' final salary
10-20 years	300 days' final salary
Over 20 years	400 days' final salary

Termination Process Best Practices

Proper termination procedures help mitigate legal risks and maintain organizational reputation. Consider this structured approach:

Evaluate Termination Grounds: Document performance issues or policy violations thoroughly. For example, a manufacturing company should maintain detailed records of safety protocol breaches before considering termination.
Provide Appropriate Notice: For performance-related terminations, provide 30 days' written notice or payment in lieu. Immediate termination may apply only for serious misconduct, such as theft or harassment.
Calculate Severance Accurately: Use the statutory scale based on verified employment duration. A common mistake is miscalculating service periods that span partial years.
Settle Outstanding Payments: Include unpaid wages, accrued vacation, and applicable bonuses. Many disputes arise from incomplete final settlements.
Issue Employment Certificate: Provide documentation confirming employment dates and position held, which assists employees with future job applications.
Facilitate Social Security Transition: Assist with benefit transfers to demonstrate good faith and compliance.

Thailand's Unemployment Benefits System

Employees terminated without cause may qualify for unemployment benefits under these conditions:

Minimum 6 months of social security contributions within the preceding 15-month period
Registration within 30 days of termination through the National Employment Office portal
Monthly reporting compliance and willingness to accept suitable employment

Benefit entitlements differ based on termination circumstances:

Termination Type	Maximum Duration	Compensation Rate
Employer-Initiated	180 days annually	50% of average wage
Voluntary Resignation	90 days annually	30% of average wage

Special Considerations: Force Majeure Situations

The Infectious Diseases Act provides for unemployment benefits during public health emergencies, such as COVID-19. Employees may receive 50% of daily wages for up to 90 days if workplace operations are suspended by government order.

Companies like SailGlobal assist international businesses in navigating these complex regulations, ensuring compliance while managing cross-border employment relationships effectively.

Thailand Employee Termination Guide: Notice Periods & Severance Pay 2024