The complete guide to termination of employment in Thailand

As a global company, understanding local labor laws is vital to your remote workforce’s success. Whether hiring in Bangkok, Phuket, or anywhere else in Thailand, it’s important to know the hiring process end-to-end, from hiring and onboarding to termination.

While seeing an employee performing poorly and making tough decisions is already tricky, doing it blindly while not understanding Thai labor or dismissal laws can be dangerous for your company.

Keep reading to learn everything you need to know about advance notice, dismissal requirements, and how hiring through an Employer of Record (EOR) can help avoid any sanctions.

How to terminate employees in Thailand: 5 essential things to know before hiring

• Your employment agreement must include a termination of employment clause. The employment contract must include an employee’s termination clause that clearly states the terms of possible termination. The terminated employee must receive at least 30 days advance written notice of termination and mandatory severance with additional wage payment based on length of service.

• At-will employment doesn’t exist in Thai labor law. You can only immediately terminate employees for just cause, and there are very limited just causes. Severance pay is not required for those dismissed with cause.

• Probationary periods last 90 days. In Thailand, probationary periods last three months up to a maximum of 119 days. Employees terminated during this period with a statutory cause are not entitled to severance pay.

• The terminated employee can file for a wrongful dismissal claim under the Labour Protection Act. If the employer violates their employee rights under the Act, they must submit proof of those violations. If the court finds the dismissal unfair, the employer will be ordered to reinstate the employee, or the court will determine an amount of compensation if they can no longer work together.

• The employer must pay in lieu of the advance notice. Along with wages, overtime pay, severance pay, and unused annual leave, the employer must also pay on dismissal day if without cause, and there’s no advance notice.

Termination rules in Thailand: What are acceptable grounds for firing an employee?

Thai employees may leave their place of employment at any time as long as they give advance notice of 30 days with a written resignation. Here are the reasons an employee can be terminated involuntarily in Thailand. 

• Termination during the probationary period. During the probationary period, the employee or employer can terminate the employment contract without penalty if it’s within the first 119 days. The employer must notify the employee before the end of the probationary period. At 120 days, the employee is now protected from Thai labor laws.

• Termination with just cause. An employee may be terminated if they commit negligent acts, violate the employment contract, commit a criminal act, miss three consecutive workdays without cause, or have serious damage or gross misconduct against the employer. The employer needs to give a 30-day advance notice of dismissal. Per section 119 of the Labour Protection Act, the employer is not required to provide severance pay for a terminated employee with reasonable cause.

• Termination without cause. Thai law sides with the employee if they’re terminated without cause, or there’s an unfair dismissal by the employer. To start the process, the employer must provide a dismissal notice with the reason and date of termination in advance.Per section 17 of the Labour Protection Act, the written warning must be delivered before the wage payment due date for the 30-day notice to take effect. As an employer, you must pay statutory payments, issue a withholding tax certificate, issue a job certification per civil and commercial code, and close their provident fund, a type of retirement account. The rate of severance payment will be determined by years of service, including unused sick leave.

• Fixed-term dismissal. If the employee works a fixed amount of time with a start and end date, severance pay is not required. Fixed-work employment can only go up to two years. Once the work is completed, the contract cannot be extended per employment law; otherwise, it will become a regular employee’s employment contract.

As Thailand’s termination requirements can differ from other countries, you must stay compliant with local laws when hiring an international workforce.

What are the mandatory notice periods and termination pay for Thai employees?

When working in Thailand, you must provide a 30-day written notice before dismissing an employee with their termination date the following month. You can also dismiss an employee immediately and pay their severance pay later.

Employees who have worked more than 120 days for the employer are entitled to severance pay. The months’ wage amount will be determined by years of service. Per the new Labour Protection Act that came into effect in May 2019, the rates of severance payment are the following:

Frequently asked questions about terminating employees in Thailand

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