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Forethat

Terminating An Employment

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I have an employee who's been with me for 5,5 years. I relocated him to Thailand 2,5 years ago but we're in the talks of ending his employment (in agreement). The issue now is that I don't know if the severance pay should be based on the time of employment in Thailand (2,5 years) or the total time of employment in my company (5,5 years).

Anyone with experience in a similar case?

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Serverance should be based on 2.5 years as it was only 2.5 years ago the employee came under Thai labour law which requires the payment of serverance

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But would he be entitled to severance under the law of the previous country that employment was based in?

Probably depends on whether he got a new contract for his employment in Thailand or just an amendment to the existing contract in which case he certainly should be entitled to severance for the full 5.5 years.

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But would he be entitled to severance under the law of the previous country that employment was based in?

Not all countries have a mandatory payment for redundancy, in a lot of repsects Thailand is very generous in that regard.

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Probably depends on whether he got a new contract for his employment in Thailand or just an amendment to the existing contract in which case he certainly should be entitled to severance for the full 5.5 years.

But under whose labour regulations ?....the person concerned appears only to have worked in Thailand for 2.5 years, therefore we cannot impose the Thai labour law's on person who was not even present in Thailand for the other 3 years.

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I believe it would depend upon the labor laws in the original country he was transferred from.

Under Thai Labor laws, he is entitled to severance based upon the 2.5 yrs he has been working in Thailand.

If he took it to court, the Thai judges are unlikely force a Thai company to pay severance for someone working for a Foreign company outside of Thailand.

If the origin country has any laws for severance, you may want to see what the regulations are in that country.

That being said, the easy way to handle is to agree upon a severance package and then have him tender his resignation in return for the agreed upon severance.

This way he could never come back to re-open the case as there is no legal requirement to give severance if the employee if he resigns, so you would never have to worry about any future legal action. So better protection for you...

Of course this only works if you can both agree upon the severance package given, but from your OP it sounds like this is a mutual thing, so this may be possible.

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Probably depends on whether he got a new contract for his employment in Thailand or just an amendment to the existing contract in which case he certainly should be entitled to severance for the full 5.5 years.

But under whose labour regulations ?....the person concerned appears only to have worked in Thailand for 2.5 years, therefore we cannot impose the Thai labour law's on person who was not even present in Thailand for the other 3 years.

This is where I'm struggling to interpret the labor law. It is impossible to interpret whether the law applies to the length of employment with the company or with it's Thai subsidiary.

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But would he be entitled to severance under the law of the previous country that employment was based in?

Probably depends on whether he got a new contract for his employment in Thailand or just an amendment to the existing contract in which case he certainly should be entitled to severance for the full 5.5 years.

There's more to this story. To give you the full picture:

The person was an employee of a company I acquired. He had been with that company for 1,5 years, making it a total of 7 years. After I acquired the company he was active in Thailand without WP (doing non-revenue generating activities according to Thai business visa). I relocated the person here after 1,5 years in Thailand, meaning the person has been in Thailand for little over 4 years.

I will continue to do business in Thailand, and I will retain 30+ employees doing "pretty much" the same type of work. The reason I want to terminate his employment is strictly economic. Another thing that bothers me is that I told the person that I didn't want to hire him unless he was prepared to stay for at least 3 years. This person has also been a good friend, which makes things even more difficult.

In my opinion there's more to this than just the legal obligations. I feel I have a moral responsibility even though the technicalities says 2,5 years. There's no risk that this will turn ugly, but I need to know what the actual law dictates in this case, especially if I keep my business along with 30+ employees in Thailand.

The reason I'm a bit iffy is that even though this is so far being done in a nice and calm way I fear that if I offer too small severance pay he will be in position to harm my business in a serious way. On the other hand, I don't want to hand out money if I don't have too.

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But would he be entitled to severance under the law of the previous country that employment was based in?

Probably depends on whether he got a new contract for his employment in Thailand or just an amendment to the existing contract in which case he certainly should be entitled to severance for the full 5.5 years.

There's more to this story. To give you the full picture:

The person was an employee of a company I acquired. He had been with that company for 1,5 years, making it a total of 7 years. After I acquired the company he was active in Thailand without WP (doing non-revenue generating activities according to Thai business visa). I relocated the person here after 1,5 years in Thailand, meaning the person has been in Thailand for little over 4 years.

I will continue to do business in Thailand, and I will retain 30+ employees doing "pretty much" the same type of work. The reason I want to terminate his employment is strictly economic. Another thing that bothers me is that I told the person that I didn't want to hire him unless he was prepared to stay for at least 3 years. This person has also been a good friend, which makes things even more difficult.

In my opinion there's more to this than just the legal obligations. I feel I have a moral responsibility even though the technicalities says 2,5 years. There's no risk that this will turn ugly, but I need to know what the actual law dictates in this case, especially if I keep my business along with 30+ employees in Thailand.

The reason I'm a bit iffy is that even though this is so far being done in a nice and calm way I fear that if I offer too small severance pay he will be in position to harm my business in a serious way. On the other hand, I don't want to hand out money if I don't have too.

I can understand where your'e coming from, but maybe your making it more difficult than it needs to be. Why not pay him what is due to him by Thai law here, and come up with a reasonable severance package for the time he was not in Thailand , but working for the same company. It doesn't have to be by Thai standards, but just something to show him that the years not worked in Thailand were for not. Just thinking out loud.

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But would he be entitled to severance under the law of the previous country that employment was based in?

Probably depends on whether he got a new contract for his employment in Thailand or just an amendment to the existing contract in which case he certainly should be entitled to severance for the full 5.5 years.

There's more to this story. To give you the full picture:

The person was an employee of a company I acquired. He had been with that company for 1,5 years, making it a total of 7 years. After I acquired the company he was active in Thailand without WP (doing non-revenue generating activities according to Thai business visa). I relocated the person here after 1,5 years in Thailand, meaning the person has been in Thailand for little over 4 years.

I will continue to do business in Thailand, and I will retain 30+ employees doing "pretty much" the same type of work. The reason I want to terminate his employment is strictly economic. Another thing that bothers me is that I told the person that I didn't want to hire him unless he was prepared to stay for at least 3 years. This person has also been a good friend, which makes things even more difficult.

In my opinion there's more to this than just the legal obligations. I feel I have a moral responsibility even though the technicalities says 2,5 years. There's no risk that this will turn ugly, but I need to know what the actual law dictates in this case, especially if I keep my business along with 30+ employees in Thailand.

The reason I'm a bit iffy is that even though this is so far being done in a nice and calm way I fear that if I offer too small severance pay he will be in position to harm my business in a serious way. On the other hand, I don't want to hand out money if I don't have too.

I can understand where your'e coming from, but maybe your making it more difficult than it needs to be. Why not pay him what is due to him by Thai law here, and come up with a reasonable severance package for the time he was not in Thailand , but working for the same company. It doesn't have to be by Thai standards, but just something to show him that the years not worked in Thailand were for not. Just thinking out loud.

Just to give others a heads up on this issue. I made the decision to pay severance based on the entire employment, not just the time after he was relocated to Thailand. After this decision was made I sought legal advice which confirmed my initial suspicion; if the employee was transferred rather than getting a new employment the severance pay should be based on this. In this case the employee also had a screen print from the company intranet which listed his number of years of employment as "5,5". As I mentioned before, the agreement was that the duration of the employment be at least 3 year. I could probably have challenged this, but not without being dishonest - the agreement WAS that the employment was to be at least 3 years. I am not the kind of person who'll back out of an agreement. For this reason, I also decided to calculate the severance pay based on 6 years of employment (which would have been the total if I had fulfilled the agreement to employ the person for at least 3 years. So the severance agreed was 10 months. In addition, we agreed that he'd receive 50% salary for the remainder of the period until the 3 years employment agreement was met. So in total I paid 11,5 months severance.

I do have to admit that I feel like an absolute schmuck for even considering the options in this case. The employee has been a real anchor for the entire time and I feel a lot better on a personal level doing what was right.

Edited by Forethat

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So, here's a corollary question: under Thai Law, assuming only employment in Thailand occurred for simplicity of discussions, does anybody know authoritatively when the severance payment required?

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So, here's a corollary question: under Thai Law, assuming only employment in Thailand occurred for simplicity of discussions, does anybody know authoritatively when the severance payment required?

Yes...go an read the labour act it is availible in English on-line and gives the conditions in which serverance is required and not required

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uhh, thanks? Will go a-googling and post a link here if I find the info since the main idea of a Forum such as this is sharing info for the larger group's benefit...

Does anybody else want to lend a hand with a link or a real answer, i.e., severance payment is required upon date of termination, or within XX number of days.

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uhh, thanks? Will go a-googling and post a link here if I find the info since the main idea of a Forum such as this is sharing info for the larger group's benefit...

Does anybody else want to lend a hand with a link or a real answer, i.e., severance payment is required upon date of termination, or within XX number of days.

You havent provided enough detail to answer your question fully, hence the reason I suggested you go an look for an on-line copy of the labour act and apply the conditions stated to your situation. The T&C's of termination should also be availble on TV, as have been discussed many times...

Basically for every year worked 30 days serverance could be payable, up to a cap of X number of months, but you really need to read the actual law to look at the conditions were this is applicable

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