Letting someone go - how?

[Matt199]

Hi guys,

 

How to fire someone in Thailand? Considering he/she is on an employment contract.

 

I understand the severance pay out, how much to pay how depending on number of months worked etc., What is not clear to me is the process. I would like to limit the likelihood of someone taking me to court for unjustified firing, and also, if such case arises of course to be able defend successfully. 

 

Also, should I instead be using term contracts? like 3 month contracts? I understand that as per Thai law the contract isn't fixed if the nature of work does not have a specific end. So technically, I couldn't use 3-month contracts that roll-over for full timers, but I wouldn't be surprised if that's the practice in Thailand to be doing so.

 

Thanks in advance

 

[ThailandRyan]

Document, Document, and Document.

Documentation of past performance, letters of reprimand, a map of training for improvement and the follow-up letter indicating they have failed to meet the minimum expectations of the employer, and then the termination letter can be issued, with a in person final meeting with another manager in the room which outlines what type if any severance pay they will be receiving.  But then even the best plans of termination go bad sometimes.  Most folks know the day is coming if they have failed to do what's expected and management has apprised them.  To terminate a contract without just cause can open the door for legal issues.

Edited September 21, 2020 by ThailandRyan

[Crossy]

24 minutes ago, Matt199 said:

So technically, I couldn't use 3-month contracts that roll-over for full timers, but I wouldn't be surprised if that's the practice in Thailand to be doing so.

 

Absolutely do not try this, an aquaintance tried and was taken to the cleaners by the labour court when his staff's work finally ended.

[blackcab]

Successive short term contracts in an attempt to avoid severance pay are a very bad idea.

 

Section 20 of the Labour Protection Act states that if an employee has not worked continuously because the employer intended to deprive the employee of severance pay (or any other right), all periods of employment will be counted as a cumulative period of employment when determining what rights the employee is entitled to. Furthermore, the Labour Court will probably rule heavily against the employer for attempting to bypass the Labour Protection Act and deprive the worker of their statutory rights.

[Matt199]

17 hours ago, blackcab said:

Successive short term contracts in an attempt to avoid severance pay are a very bad idea.

 

Section 20 of the Labour Protection Act states that if an employee has not worked continuously because the employer intended to deprive the employee of severance pay (or any other right), all periods of employment will be counted as a cumulative period of employment when determining what rights the employee is entitled to. Furthermore, the Labour Court will probably rule heavily against the employer for attempting to bypass the Labour Protection Act and deprive the worker of their statutory rights.

Thanks for sharing. I can prepare to give severance according to the rules, but I will like to have an open door and have employees constantly try do their best given that there's a likelihood of their contract not being extended. Is there such a possibility?

[Matt199]

18 hours ago, ThailandRyan said:

Document, Document, and Document.

Documentation of past performance, letters of reprimand, a map of training for improvement and the follow-up letter indicating they have failed to meet the minimum expectations of the employer, and then the termination letter can be issued, with a in person final meeting with another manager in the room which outlines what type if any severance pay they will be receiving.  But then even the best plans of termination go bad sometimes.  Most folks know the day is coming if they have failed to do what's expected and management has apprised them.  To terminate a contract without just cause can open the door for legal issues.

Anywhere where I can read more about this, get templates etc., or everything is practical know-how? Thanks!

[blackcab]

1 hour ago, Matt199 said:

Thanks for sharing. I can prepare to give severance according to the rules, but I will like to have an open door and have employees constantly try do their best given that there's a likelihood of their contract not being extended. Is there such a possibility?

 

If you hire an employee longer than the probation period, you have to pay them severance if you terminate them without cause. It's as simple as that. If you try and get around the law, it will be an expensive mistake. Thai labour law is designed to protect the employee and works on the basis that there is an uneven distribution of power between the employer and the employee.

 

It sounds like you want to initiate a Service Level and KPI program and you want to include mandatory minimum performance into your employment contracts. If you do that then be sure that the KPI measurements are equitable, realistic and timely, otherwise the Labour Court will find that your employment contracts were completely unrealistic and were designed to give you an easy way to terminate employees.

 

If you are going to put something like ISO 9001:2015 in place then you will be using international standards and a trained Thai speaker who will be able to competently onboard your company. If, however, you are going to set the goalposts yourself then there is a possibility that it will turn around and bite you quite hard.

[Matt199]

2 hours ago, blackcab said:

 

If you hire an employee longer than the probation period, you have to pay them severance if you terminate them without cause. It's as simple as that. If you try and get around the law, it will be an expensive mistake. Thai labour law is designed to protect the employee and works on the basis that there is an uneven distribution of power between the employer and the employee.

 

It sounds like you want to initiate a Service Level and KPI program and you want to include mandatory minimum performance into your employment contracts. If you do that then be sure that the KPI measurements are equitable, realistic and timely, otherwise the Labour Court will find that your employment contracts were completely unrealistic and were designed to give you an easy way to terminate employees.

 

If you are going to put something like ISO 9001:2015 in place then you will be using international standards and a trained Thai speaker who will be able to competently onboard your company. If, however, you are going to set the goalposts yourself then there is a possibility that it will turn around and bite you quite hard.

Thanks once again. Much much appreciated. The way I understand probation period is that there is nothing like a "probation period" per se. Even if I let them go early within a month or two, I would still need to have a reason, correct? Ad then they would also need to sign-off their resignation. If they don't, could be trouble. There's just no severance pay if they worked less than 120 days. Is my understanding correct?

 

Unfortunately, the KPI program would be impossible to implement given the relationship-like nature of the position. 

 

Edited September 22, 2020 by Matt199

[blackcab]

3 hours ago, Matt199 said:

Thanks once again. Much much appreciated. The way I understand probation period is that there is nothing like a "probation period" per se. Even if I let them go early within a month or two, I would still need to have a reason, correct? Ad then they would also need to sign-off their resignation. If they don't, could be trouble. There's just no severance pay if they worked less than 120 days. Is my understanding correct?

 

Unfortunately, the KPI program would be impossible to implement given the relationship-like nature of the position. 

 

 

The reason why you terminate doesn't matter that much. You don't even have to give a reason. What matters is that if you terminate without cause, then you are obliged to pay severance. However, must people would use a reason such as a decline in business, to avoid making the employee lose face.

 

120 days employment or more and you are liable to pay severance, which is where the "6 month probation period" comes from.

 

Employees don't sign a resignation form unless they choose to resign without pressure from you. If you terminate an employee without cause and pressure or deceive then into signing a resignation form in an attempt to not pay severance pay, the Labour Court will rule the resignation invalid and penalise you for not paying the correct severance pay as well as making you pay full restitution to the employee.

 

Employee protection is very strong in Thailand, and whatever you come up with the Labour Court has seen it many times before. Quite simply, the Court just isn't having it. They see things very clearly and their decisions are made very quickly.

 

The Labour Court is also free, and the Department of Labour has a free and comprehensive walk in office and telephone helpline for employees who have grievances with their employers. There is nothing stopping anyone enquiring if they have a case, which inevitably means that most people will have a go, especially when there is potentially a substantial amount of money to gain.

[Matt199]

@blackcab I really appreciate what you're writing. Especially about how easy it is to try and get a ruling. I had no idea. I guess then every employee will be pressured by friends/family to give it a try.

 

Could you share what in practice can I expect from a ruling from someone making 20k THB a month and being let go without cause in first 90 days? I just want to be prepared and not get a shock if I have to pay a lot and set aside maybe even a budget for this.

 

Unfortunately, it's a risk that I have to take. I'm happy with 75% of staff that I hire (after making reference checks), but some negative can come up within first weeks especially if clients complain and feedback sessions don't work to fix.

[blackcab]

3 minutes ago, Matt199 said:

Could you share what in practice can I expect from a ruling from someone making 20k THB a month and being let go without cause in first 90 days?

 

You will not have to pay any severance at all, as the employee would have been employed less than 120 days.

 

The employee would not be able to file a claim at the Labour Court because they would not have been employed for 120 days or more.

[bodga]

Push them to work harder, give them the worst  jobs,  it  might sound cruel but  make them resign of their own accord.

[Bender Rodriguez]

is covid not a valid excuse? downsizing ?

[Matt199]

9 minutes ago, blackcab said:

 

You will not have to pay any severance at all, as the employee would have been employed less than 120 days.

 

The employee would not be able to file a claim at the Labour Court because they would not have been employed for 120 days or more.

I see. That is great news indeed.

 

Absolute last question, I appreciate your time to do this, so there is no notice period during first 119 days correct? I can let someone go effective immediately, correct? Thank you in advance

[steven100]

I watched a movie last night called Firewall and Harrison Ford had to sack the receptionist.

He called her into his office and said ' now pack your things and get out '  

[blackcab]

20 hours ago, Matt199 said:

 ...so there is no notice period during first 119 days correct? I can let someone go effective immediately, correct? Thank you in advance

 

There is always a notice period, regardless of the length of employment. That notice period is the same as the employee's pay period.

 

If the employee is paid monthly, their notice period is 1 month. If they are paid fortnightly, their notice period is 2 weeks.

 

It is common practice in Thailand to pay the notice period and then explain to the employee that they are being given extra free holiday from today until the end of their notice period, and that they don't have to come to work any more.

 

Make sure that they collect all personal property before they leave and that they hand in any company property.

 

I'm sure this won't be the case for you, but the maximum notice period is 3 months for those paid quarterly or even less frequently than that.

[Matt199]

Thank you very much for helping @blackcab. Much much appreciated! Very clear

[blackcab]

30 minutes ago, Matt199 said:

Thank you very much for helping @blackcab. Much much appreciated! Very clear

 

I am assuming you have at least one trustworthy bi-lingual employee or a Thai partner. If you do, you should get them to call the Department of Labour Protection and Welfare for advice on terminating an employee correctly. You can reach them by calling 1506 extension 3.

 

The DLPW is sympathetic but pragmatic, and they are all about ensuring employees get their rights. If you explain that your company is going through difficult times, and that you want to do things the right way and treat the employee correctly then they will help you. Tell them the employee's length of service and they will tell you what you are obliged to pay.