Tag Archive: employment

  1. Termination of Employment : Part III – Lay-Off Termination

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    What are the definitions of “termination” and “lay-off”?

    Termination of employment is an employee’s departure from a job. Termination may be voluntary on the employee’s part, or it may be at the hands of the employer, often in the form of dismissal (firing) or a layoff.

    Dismissal or firing is generally thought to be the fault of the employee, whereas a layoff is generally done for business reasons (for instance a business slowdown or an economic downturn) outside the employee’s performance.

     

    Checklist:

    If you decide to terminate an employee with an unlimited temporary employment, please pay attention our following advice for a correct termination:

     

    1. Notice period

    The employer must mind the notice period which ends on the date of the next wage payment. This is usually the last working day of the month following the termination notice.

    E.g.: A termination notice is submitted on 10. February. The notice period then ends on 31st March (presumed that the 31st march is not on a weekend or public holiday).

     

    Remark regarding probation period

    • The requirement for a notice period applies for the first 120 workdays as well.
    • Therefore, an employee in a probation period must be given the same notice period;
    • A paragraph in the employment contract which allows the employer to layoff without notice during the probation period is void;
    • If the employer does not observe the notice period, the employee is entitled to wage payment during the notice period (“wage in lieu of advance notice”)

     

    2. Severance pay

    An employer shall pay severance pay to an employee who is laid off. The amount of the severance pay varies, depending on the period of employment:

     

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    Remark:  the employer is not required to pay severance to an employee whose employment is terminated with cause ( -> Please see our client memo on dismissal of an employee with cause )

     

    Two special cases for severance pay:

    a) reorganization measures due usage of machines

    • In this case, the employer must to make an announcement of an intended termination 60 days in advance and inform the “Labour Inspector”
    • If the employer neglects the period, he must pay special severance in amount of the wage payment for 60 days beside the regular severance pay (“special severance pay in lieu in advance notice”)

    b) relocating of the workplace

    • If the employee is unwilling to work at the new workplace, he has the right to terminate the employment.
    • In this case, the employee has the claim to get the full regular severance pay

     

    3. Annual holiday pay, Overtime pay, Holiday pay, Holiday overtime pay

    The Employer shall pay wages of the employee for annual holidays in the year of termination equal to the proportion of annual holidays to which the employee is entitled. Also, Overtime Pay and Holiday Overtime Pay to which the Employee is entitled shall be paid within three days from the date of the Employee’s termination

    Find out more about our labor and employment services

  2. Termination of Employment : Part II – Dismissal of an employee

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    What are the definitions of “termination” and “dismissal”?

     

    Termination of employment is an employee’s departure from a job. Termination may be voluntary on the employee’s part, or it may be at the hands of the employer, often in the form of dismissal (firing) or a layoff. Dismissal or firing is generally thought to be the fault of the employee, whereas a layoff is generally done for business reasons (for instance a business slowdown or an economic downturn) outside the employee’s performance.

     

    Dismissal is when the employer chooses to require the employee to leave, generally for a reason which is the fault of the employee. In the case of the dismissal of an employee, the contract ends without notice and without severance pay.

     

    Checklist:

    If you decide to dismiss an employee (termination without notice), please pay attention our following advice for a correct termination.

     

    1. Existence of an important reason

    Under Thai law, a dismissal is considered under the following circumstances:

    • being dishonest in performing duties or intentionally committing a criminal against the employer
    • intentionally causing damages to the employer;
    • performing an act of negligence which causes severe damages to the employer;
    • violating work rules or regulations or disobeying the employer’s orders which are legal and fair and which the employer has already given a warning letter, except in serious cases for which the employer is not required to give a warning;
    • neglecting the work duties for a period of three consecutive work days without a reasonable cause, whether or not there is a holiday intervening in such period; and/or
    • having been imprisoned by a final judgement.

    If one of the aforementioned cases is committed with negligence or is a petty case, the employer must prove that he has suffered a damage.

     

    2. Ultima Ratio (“the last resort”)

    The extraordinary termination should always be the last resort. The employer must consider any other measure that may solve the problem like:

    • transfer to another workplace or department; and/or
    • ordinary termination.

     

    3. Declaration of the dismissal

    The employer should name the important reason in the termination letter.  If it is missing, the employer cannot invoke to this reason in a future proceeding.

    It is commendable to secure oneself with warning letters (please see our FLT memo related to “Warning Letter to Employee”)

     

    4. Provide the employee with the termination letter

    The termination letter should be provided via post or personally.

    The employee can have the termination reviewed by the Labor Court. If the Labor Court finds that the termination was unjust, the employer may be ordered to letting the employee work under the old conditions.

    If it comes to the result the termination was unjust, but the continuation of work is unacceptable, the employer has to compensate for damages.

     

    5. Practical measures

    If the employee leaves the organization, certain things need to be managed, for example:

    a) Return of property

    If the employee used employer property as a part of the job, make sure you collect them. For example:

    • company laptop
    • cellphone
    • office keys
    • ID badges

    b) Cancellation of any access

    You should cancel any access the employee might have to the office. Files, computer files should be protected and make sure that your IT staff cancels passwords to any company digital files. For example:

    • disconnect the computer login
    • remove the email address from the staff list
    • disable entry building code or entry swipe card

    For the e-mail-address, make an arrangement with your ID-administrator to determine exactly for how long this account will be active, to avoid unauthorized use by the departing employee.

    c) Cancellation of advantages

    Make sure that you cancel employee benefits. For example:

    • Health-, Dental-, Life-, Disability Insurance
    • Stop retirement contribution

    d) Final pay

    Make sure that your payroll department calculates the final hours of work as well as any unpaid vacation hours and let the employee know when he or she can get them.

    Find out more about our labor and employment services

  3. Termination of Employment : Part I – Warning Letter to Employee

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    A warning letter is useful to confirm and address a performance or conduct issue with an employee. Such performance issues may include, for example:

    • violating work rules or regulations or disobeying the employer’s orders;
    • continuously coming too late to workplace;
    • insults against employer or colleagues;
    • too frequent sick leave;
    • alcohol on workplace;
    • unexcused absence;
    • work refusal;
    • poor performance; or
    • unauthorized secondary employment.

    You usually issue a warning letter to the employee after meeting with them to discuss the problem. Following this process can help resolve issues before the situation becomes worse.
    There is no legal requirement to provide formal written warnings or a certain number of warnings. However, to determine whether an employee was unfairly dismissed, the Labor Court will consider if the employee was:

    • warned about performance or conduct issues, and
    • provided a reasonable opportunity to improve their performance and conduct.

    Theoretically a verbal warning in presence of a supporting person is allowed, but it is not recommendable. Because in court it has less evidential value for receiving and the observance of formal requirements (censure and warning function).
    Please note that warnings may not be appropriate in some cases of serious misconduct. The immediate termination of employment may be necessary in such circumstances.
    The warning shall be effective for a period of not exceeding one year from the date the employee commits the offense.
    Following is our suggested proceeding for the formal warning of an employee:

     

    Step 1: define and consider the problem

    Firstly, identify the performance or conduct issue. Think about the seriousness and duration of the problem and what kind of actions you want to take to address it.

    If applicable, review policy or contract article applicable to issue (e.g. Sick Leave; Leave of Absence; Corrective Action/Discipline/Dismissal.)

     

    Step 2: meet the employee

    The following meeting with the employee is important to:

    • identify and resolve issues before the situation gets worse;
    • explain your expectations of the employee; and
    • agree on solutions to improve the situation.

    It is best practice to let the employee know the purpose of the meeting in advance so they can adequately prepare for the meeting.

    Always document the details of any performance or conduct meeting held with an employee.

     

    Step 3: prepare the letter of warning

    The warning letter should include:

    • concrete and precise description of the performance or conduct issue (the employee must recognize it);
    • warning that the employer will determined the contract or other consequences if the employee does not change his behavior;
    • what has been discussed with the employee about the issue;
    • a plan for the steps the employee needs to take; and
    • a reasonable timeframe in which the changes or improvements need to take place.

     

    Step 4: provide the employee with the warning letter

    The warning letter should be provided via post or personally.

    Ensure that the employee gets the warning letter and if handed over personally, document the details of providing the letter (the time, the date, who was there etc.).

    Ask the employee to sign a copy of the letter and return it to you for your records (please note that employees are not required by law to sign a copy of the letter) and keep a copy of the letter for your records.

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  4. What Happens with my Non-B Visa if my Employment Ends?

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    A common question that we are frequently asked by clients who work in Thailand as foreigners and under a work permit, is whether their visa will expire if an employment in Thailand ends.

    In that respect it should be noted that although work permits are usually granted for a one-year term, their validity will be tied to the validity of the foreign national’s visa at that time. Therefore, a typical one year visa extension will expire within seven days after the work permit expires. However, a regular non-immigrant B visa (with 1 year duration but only 3 months permissions to stay) will not expire in this way but continue to be valid until its normal expiration date.

    After the visa is extended, the work permit will also be extended up to the expiration date of the current valid visa. Please note that work permits are usually extended every year.

    Please feel free to contact us if you have any inquiries regarding visa and work permit matters.