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BANGKOK 27 May 2019 06:05
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wangsuda

Thai Labor Law And Severance Pay

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Here's the scenario: a person has worked for a private school continuously for five years. Each year, this person completes a contract and then renews the contract. This person has had a work permit and non-B visa during the entire time of employment. This person has paid taxes and filed tax returns. It has now come to the time for this person to move on. The big question is, does this person qualify for severance pay? According to Thai labor law

An employer shall pay severance pay to an employee whose employment is terminated, as follow:

1.An employee who has worked for at least 120 consecutive days, but for less than one year shall be paid basic pay for 30 days at the most recent rate of basic pay received by him

2.An employee who has worked continuously for at least one year but less than three years shall be paid basic pay for 90 days at the most recent rate of basic pay received by him.

3.An employee who has worked consecutively for three years but less than six years shall be paid basic pay for 180 days at the most recent rate of his basic pay.

4.An employee who has worked consecutively for at least six years but less than 10 years shall be paid basic pay for not less than 240 days at the most recent rate of his basic pay.

5.An employee who has worked for more than 10 years consecutively shall be paid basic pay for not less than 300 days at the most recent rate of his basic pay.

This person thinks that s/he is entitled to 180 days of severance pay as per Thai labor law. However, upon further reading, this person also finds:

An employer is not required to pay severance pay to an employee whose employment has been terminated for any of the following reasons:

1.Resignation

2.Dishonest performance of his duties or the intentional commission of a criminal act against the employer;

3.Intentionally causing loss to the employer;

4.Performance of gross negligence which result in severe loss to the employer;

5.Violation of the employer's work rules or regulations or order 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.

The written warning shall be effective for a period of one year as from the date of the commission of the violation by the employee;

6.Neglect of his duties for a period of three consecutive work days without reasonable cause, whether or not a holiday intervenes;

7.Imprisonment by reason of a final judgment.

8.An employment contract shall be terminated when the specified period in the employment contract expires, the works related are as follows:

8.1 Employment on a special project, which is not in the normal way of business or trade of the employer, where there is a fixed schedule for commencement and completion of work.

8.2 Work of a temporary nature with a fixed schedule for its commencement or completion.

8.3 Seasonal work in respect of which employees are only engaged during that season; provided that the work most be completed within a period of two years and the employer and employee have entered into a written agreement at or prior to the commencement of employment.

Now this is a new wrinkle; does finishing a contract and not signing a new one constitute “resignation,” and therefore no severance pay? Is teaching at a private school considered “temporary,” “seasonal,” or a “special project?” What is this person to do? Should s/he ask about the amount of severance with their current employer? How should this matter be brought up? And what recourses does this person have if the current school proves to be difficult in realizing that Thai labor law also applies to foreigners? And most important, do foreign, legal, private school teachers even stand a snowball's chance in hel_l of collecting severance pay? Your help in this matter would be appreciated.

Information about the Thai labor law came from http://www.thailabour.org/law/thai/code.html#no

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An excellent post and one which i have been wrestling with myself as some of our teachers have brought up the subject.

Your scenario is extremely realistic.

Our employer, as i suspect many others in the teaching game, has the staff sign a one year contract.

1. You'd have to ask a lawyer for advice, but do 2 or more one-year contracts equate to working for 2 or more years continuously?

I guess a very clever school would start employees one day after the end of the previous contract, thereby breaking any continuity.

2. I think that clause 8.2 is particularly pertinent, though again, legal advice needs to be sought. "work of a temporary nature with a fixed schedule for start and finish'

Couldnt it be argued that a one-year contract is a temporary arrangement with a fixed finish date?

Let's say a contract ends on March 30th and the school, for whatever reason, decides to not renew that teacher's contract. Couldnt it be argued that both parties have agreed to the terms of the contract in full, and that it ends on March 30th? If the answer to that question is 'yes', then wouldnt it be the same whether the teacher was on his 1st or 21st contract? They are all one-year temporary none-immigrant agreements.

Wangsuda, i know this doesnt answer your post in any way, in fact, it's probably thrown fuel on the fire, and i apologies for that. However, i'm genuinly interested in any answers, though i guess previous case history, if anyone can post them on here, as opposed to bar-room lawyerism, is what is needed.

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I am an employer and am interested in this also. i have to have employee contracts on file but each one does not have an ending date. Should i make 1 year contracts with a couple of weeks off in between contracts ?

Personally if i was running a school i would date my contracts from the first day of school to the last day of school or there abouts. This would make at least a one month gap in between contracts. As far as resignations if anyone quits i do not pay them any severance pay.

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I am an employer and am interested in this also. i have to have employee contracts on file but each one does not have an ending date. Should i make 1 year contracts with a couple of weeks off in between contracts ?

Personally if i was running a school i would date my contracts from the first day of school to the last day of school or there abouts. This would make at least a one month gap in between contracts. As far as resignations if anyone quits i do not pay them any severance pay.

Remind me not to work for you. :o

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As far as i'm aware, and please tell me if you think i'm wrong, 'resignation' and 'severance' are two different things.

Resignation is where the individual, for what ever reason, resigns his position before the end of the contract, and therefore breaks the contract. I dont think they are entitled to any severance pay because their contract hasnt been severed!

Wolfman - the difficulty in having a 'couple of months off' between contracts is that you would in effect be offering only 10 month contracts, and not one year contracts. Whilst this is not unusual in the teaching game, it certainly is not the norm. This makes your contract unnattractive! You may have trouble recruiting.

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Every legal employee qualifies for severance pay. Even if they say you are a 'temporary hire,' this doesn't hold water after the first year or so (or else no one would ever have any 'permanent employees')- Thai labour law is strong, and if the paperwork has been correct the MOL (Ministry of Labour) will back you up. Insist on your rights, and if that doesn't work hire a lawyer to inform the school you know your rights. They will cave in. Then post their name in our 'schools you don't recommend thread,' as if by coincidence.

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Every legal employee qualifies for severance pay. Even if they say you are a 'temporary hire,' this doesn't hold water after the first year or so (or else no one would ever have any 'permanent employees')- Thai labour law is strong, and if the paperwork has been correct the MOL (Ministry of Labour) will back you up. Insist on your rights, and if that doesn't work hire a lawyer to inform the school you know your rights. They will cave in. Then post their name in our 'schools you don't recommend thread,' as if by coincidence.

IJWT - i'm certainly not trying to pick any holes in your post, but can you post links to any success stories etc. Maybe in newspapers/ajarn.com or indeed on here?

It's just that i'm trying to separate fact from heresay.

Coincidentally, i am pretty much in exactly the scenario that Wangsuda described in his opening post...........

This could be a bit arkward.........

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Good post Donna, and good to get the link in this thread - it may help someone searching in the future, however, it's quite different from Wangsuda's scenario wherby the employee isnt fired, but just doesnt get his contract renewed after 5 years. The final contract in Wang's case just runs its course and finishes on the correct date.

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however, it's quite different from Wangsuda's scenario wherby the employee isnt fired, but just doesnt get his contract renewed after 5 years. The final contract in Wang's case just runs its course and finishes on the correct date.

Actually, the scenario is that a sixth contract is offered, it just isn't accepted. Everyone parts on good terms . . . until the mention of severance pay!

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If you leave on your own accord, no severance pay is due.

If you are not offered a new contract, and the job is one that will continue with another employee, you are due severance pay. The exception here is when someone is let go for 'cause'. In that case, no severance pay is due.

All time counts towards the total. The Labor Act is written to close loopholes where employers would take advantage of employees by having a period of time where there was no contract in place.

The end of a project refers to short time work that has a definite ending. Teachers with one year contracts do not fall under this. The teaching position continues, even though it may be with a new employee.

Take a look at the info in the link provided in post #1.

Edited by TerryLH

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So the person in my scenario is screwed. Ok, thanks for clearing that up, TerryLH. I appreciate that.

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to the OP, if you are the one deciding not to renew your contract, then you shouldnt be due for any severance pay as it is your decision. what makes you think that you are due for severance pay?

to desertrat, as long as you can prove you have been working there, the fact that you dont have a contract shouldnt make a difference, i think. i COULD be wrong on this point, but i dont think i am.

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