THAILAND Law and Practice Contributed by: Nam-Ake Lekfuangfu, Theeranit Pongpanarat and Panitan Pruksakasemsuk, Baker McKenzie (Bangkok)
date such CBA is entered into. If the term of the CBA expires and there is no negotiation on such CBA, it shall be deemed to be applicable for one further year.
be equal to the employee’s last wage rate for 15 days for each full year of service beyond the initial six years. However, the total amount of this special severance pay cannot exceed the equivalent of the last wage rate for 360 days. 7.2 Notice Periods For a general case of employment termination not due to any statutory termination grounds, the employer must comply with the following. Notice Period According to the LPA, an employee or employer who wishes to terminate an indefinite-term agreement must give no less than one pay period advance notice of termination in writing to the other party – ie, the terminating party must provide the other party notice on or before any payday to take effect on the next payday. The notice period can be longer if agreed oth - erwise by the employer and employee. Please note that this pay period is not necessarily one month or 30 days, and could be longer depending on the payday, when the termination notice is given, and the termination effective date. An employer who fails to provide sufficient termination notice in advance is legally required to make payment in lieu of the shortfall notice period. Severance Pay Severance pay is required if the employer terminates an employee not due to any statutory grounds for ter - mination, and the employee has worked for 120 days or more at the following rates: • service of more than 120 days but less than one year: 30 working days’ wage is payable; • service of one year or more but less than three years: 90 working days’ wage is payable; • service of three years or more but less than six years: 180 working days’ wage is payable; • service of six years or more but less than ten years: 240 working days’ wage is payable; • service of ten years or more but less than 20 years: 300 working days’ wage is payable; and • service of 20 years or more: 400 working days’ wage is payable.
7. Termination 7.1 Grounds for Termination
Under Thai labour law, an employer can terminate an employee’s position at any time and for any reason, provided that it complies with all legal requirements for such termination, including providing notice in advance, paying severance pay as required, etc. However, the employer may also rely on the six statu - tory grounds under the LPA – eg, employment may be terminated if an employee commits a serious viola - tion of the employer’s lawful and fair order and regula - tions, without having to provide a termination notice in advance or pay severance pay. The employer should have a justifiable reason to ter - minate its employees’ contracts, in order to be able to defend itself against an unfair termination claim by a terminated employee (see 8.1 Wrongful Dismissal ). No special rules are applied in the general case of collective redundancy. However, in the case of redun - dancy due to the improvement of the organisational structure, manufacturing process, sales or service resulting from the use of new machinery or a change of machinery or technology, the employer is required to give advance notice with the details on the effective date of termination, the reason for termination and a list of names of affected employees to the labour inspector and the terminated employees no less than 60 days before the effective date of termination. Fail - ure to provide advance notice or to provide notice within the accepted timeframe will lead to the employ - er being liable to pay special severance pay in lieu of advance notice equivalent to the last 60 days of wages, in addition to the severance pay. If an employer terminates an employee’s position due to redundancy, and that employee has worked contin - uously for six years or more, the employer is required to provide a special severance payment in addition to the standard severance pay. This special payment will
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