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Severance Pay Rules - Thailand
Severance Pay Rules - Thailand
Severance Pay Rules - Thailand

At termination, employers have to make two types of payments:

  1. Notification pay

    and then

  2. Severance pay

Notification pay applies to all employees who are terminated at employer's initiative. Basically, based on the day (date) you announce the impending retrenchment, you must pay all employees full salary for the current, and also the following monthly pay period. It is up to you whether you want to require them to continue working up to the end date - but you must pay them through that date.

If you announce impending termination, and require the employee to work until the end of the following month - then if that employee finds other employment that requires that he/she start that employment before the final end date you specified - they must resign from your company, and you then owe them no severance pay.

You may announce termination on any day of a month - including the last day of the month - and that counts as the first month, for purposes of notification pay.

So - all employers owe TWO MONTHS of salary as "notification pay" - before severance pay is considered.

Severance pay only applies to employees who have worked for your company more than 120 days. Severance pay amounts are as follows:

Employees with more than 120 days, but less than one year employment are entitled to severance pay equal to one month's salary.

If employed more than one year, but less than three years, employees are entitled to severance pay equal to three months' salary.

If employed more than three years, but less than six years, employees are entitled to severance pay equal to six months' salary.

If employed more than six years, but less than ten years, employees are entitled to severance pay equal to eight months' salary.

If employed more than ten years, employees are entitled to severance pay equal to ten months' salary.

Severance pay need not be paid under the following circumstances:

  1. Dishonesty in the performance of assigned job duties or the intentional commission of a criminal act toward the employer Note: In order to make use of this clause, you must file a Police report);

  2. Committing an intentional act that causes financial loss to the employer;

  3. Committing an act of gross negligence that results in serious financial loss to the employer;

  4. Violation of the employer's posted work rules or regulations or orders which are both lawful and equitable when the employer has already issued the employee with a prior written warning, except in a serious instance when the employer is not required to give a warning.

    For purposes of determining repeated violation following a written warning, a given Written warning remains "active" for one year from the date of the commission of the earlier violation by the employee (Note: You must create and keep formal written counseling statements);

  5. Absence from work or neglect of employee's duties for a period of three consecutive work days without reasonable cause, whether or not a holiday intervenes;

  6. Imprisonment by reason of a final judgment, except in the case of offenses which arise from negligence or for petty offenses.


The reference for severance pay rules is Sections 118 and 119 of the Labor Protection Act of 2541 (1998) - available on-line at: http://thailaws.com/law/t_laws/tlaw0132a.pdf

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