Job Contract Question: Employer Cuts My Salary

[simonphuket]

Hi,

Probably some obvious questions, but just to make sure I know where I stand legally.

My employer whom I've been working for since August 2007 has been hit as well by the economical crisis and the closure of the airport (we're in the tourism business). He sent me a letter on December 30 2008, that as of next month (1 Feb 09) my salary will be cut by 40%, with a lower job title. I replied (written) that I do not agree with this and he cannot chance my contract without mutual agreement.

The way I see this is either:

a) he ends my contract but has to pay me severance package of around 3 months salary

nothing changes and he continues to hire me for my current salary and job title.

Is this correct?

Thanks for any replies/support/advice.

[samuibeachcomber]

my g/f has been working for her firm for over 12 months,and they have cut all their employees salary,my g/f by 40% too.the contract is written under thai law...................but from what ive heard and seen,thai contracts are not worth the paper they are written on.so in answer to your question,yes i think they can do this and you have to like it or lump it.thais not the west where you have have legal recourse.

[MattFS218]

it depends what country you might be able to bring legal action against. Is this a Thai company? I seem to remember a clause somewhere saying 2 months severance pay is the law, but good luck enforcing it in a Thai court.

If its a US employer you are shit out of luck, but you might be legally entitled to accrued but unused vacation.

Europe I'm sure has more socialist rules.

[samuibeachcomber]

as an aside you would be due severance pay if your firm(having written you a thai contract under thai law)terminated your contract(that is they terminated your employment)and you would be due 2 or 3 months severance pay.But what a firm will usually do is continue to reduce your salary to such a point where you say "enough is enough" and tender your resignation out of disgust at such treatment which then gives them the way out not to have to pay any severance pay at all.

[simonphuket]

Thanks guys. Officially, that is on paper, it is a Thai-owned company. Unofficially, it is owned and run by foreigners. They will probably get away with not paying anything at all, trying to sue them will not help much. They have no money, I could take some of the inventory with me though, until they pay me out... . I'll keep you posted if anyone is interested. Cheers

[samuibeachcomber]

Thanks guys. Officially, that is on paper, it is a Thai-owned company. Unofficially, it is owned and run by foreigners. They will probably get away with not paying anything at all, trying to sue them will not help much. They have no money, I could take some of the inventory with me though, until they pay me out... . I'll keep you posted if anyone is interested. Cheers

sorry to hear,but yes you cant get blood out of a stone,when it comes to situations like thissometimes the farangs are worse than thai owners,my motto in thailand is trust no one,which is sad but keeps you safe.

[PattayaParent]

If your salary is stated in your contract and they don't pay it then they're in breach of contract.

Write tehm a letter to that effect and go see the labour court and find out what you can do.

[simonphuket]

If your salary is stated in your contract and they don't pay it then they're in breach of contract.

Write tehm a letter to that effect and go see the labour court and find out what you can do.

But is it worth the hassle, time and money? Laywers are expensive. In case you should win, does the other party have to pay all costs? My salary has gone up since I joined them and that new salary has never been confirmed in writing...

Actually, it is a bit more complicated that this:

On 30 December in a meeting they verbally tell me I am being laid off per 1 Feb 2009. The next day I receive a letter in which they offer me another job with a lower salary and job title. I decline this (found something else already with same pay as current job).

Now they phrase it such that I am breaching the contract. To be fair, I would be happy with ending the contract as they verbally announced, with the severance pay as dictated by Thai law.

[thaigerd]

Phuket has a very strong and good labour department they will help you...and it's for free.

Some friends of mine(foreigners) had the same or similar problem like you, they all won their cases in a very short time and received their payments.

Gerd

[simonphuket]

Phuket has a very strong and good labour department they will help you...and it's for free.

Some friends of mine(foreigners) had the same or similar problem like you, they all won their cases in a very short time and received their payments.

Gerd

Now, that is good news! Let's prepare for a battle then and should I win and you are in the area, beer is on me .

[bendix]

If your salary is stated in your contract and they don't pay it then they're in breach of contract.

Write tehm a letter to that effect and go see the labour court and find out what you can do.

But is it worth the hassle, time and money? Laywers are expensive. In case you should win, does the other party have to pay all costs? My salary has gone up since I joined them and that new salary has never been confirmed in writing...

Actually, it is a bit more complicated that this:

On 30 December in a meeting they verbally tell me I am being laid off per 1 Feb 2009. The next day I receive a letter in which they offer me another job with a lower salary and job title. I decline this (found something else already with same pay as current job).

Now they phrase it such that I am breaching the contract. To be fair, I would be happy with ending the contract as they verbally announced, with the severance pay as dictated by Thai law.

As usual, you are receiving some appalling guidance on here, most of which is completely wrong. As an aside, it can be very dangerous for bar stool lawyers to provide advice which - bizarrely - seems to be taken at face value.

so let's get real.

The letter stating you are being laid off is effectively a redundancy letter. As such u are entitled to severance payment based on your length of employment. It is up to you if you choose to accept the lay-off.

They have been very clever (and are obviously aware of the severance payment laws) because they have then offered an alternative role. They are quite within their rights to do that. You are NOT being offered a lower salary - in effect your role has been made redundant and they are lawfully offering another replacement role on new terms. It's all legal and legit.

You have two choices. Take the new role at reduced terms or leave the firm and request severance. You are under no legal obligation to accept the new job.

Contrary to what people on here have said, the Labour Courts are very good and can (and do) enforce severance payments, even to farang. I know of several other TV posters who can personally back that up through their own experience.

[PattayaParent]

If your salary is stated in your contract and they don't pay it then they're in breach of contract.

Write tehm a letter to that effect and go see the labour court and find out what you can do.

But is it worth the hassle, time and money? Laywers are expensive. In case you should win, does the other party have to pay all costs? My salary has gone up since I joined them and that new salary has never been confirmed in writing...

Actually, it is a bit more complicated that this:

On 30 December in a meeting they verbally tell me I am being laid off per 1 Feb 2009. The next day I receive a letter in which they offer me another job with a lower salary and job title. I decline this (found something else already with same pay as current job).

Now they phrase it such that I am breaching the contract. To be fair, I would be happy with ending the contract as they verbally announced, with the severance pay as dictated by Thai law.

As usual, you are receiving some appalling guidance on here, most of which is completely wrong. As an aside, it can be very dangerous for bar stool lawyers to provide advice which - bizarrely - seems to be taken at face value.

so let's get real.

The letter stating you are being laid off is effectively a redundancy letter. As such u are entitled to severance payment based on your length of employment. It is up to you if you choose to accept the lay-off.

They have been very clever (and are obviously aware of the severance payment laws) because they have then offered an alternative role. They are quite within their rights to do that. You are NOT being offered a lower salary - in effect your role has been made redundant and they are lawfully offering another replacement role on new terms. It's all legal and legit.

You have two choices. Take the new role at reduced terms or leave the firm and request severance. You are under no legal obligation to accept the new job.

Contrary to what people on here have said, the Labour Courts are very good and can (and do) enforce severance payments, even to farang. I know of several other TV posters who can personally back that up through their own experience.

He didn't say he got a redundancy letter, just a verbal notice and then a new job offer in writing.

How can they offer him a new job when he already has one with them?

[bendix]

If your salary is stated in your contract and they don't pay it then they're in breach of contract.

Write tehm a letter to that effect and go see the labour court and find out what you can do.

But is it worth the hassle, time and money? Laywers are expensive. In case you should win, does the other party have to pay all costs? My salary has gone up since I joined them and that new salary has never been confirmed in writing...

Actually, it is a bit more complicated that this:

On 30 December in a meeting they verbally tell me I am being laid off per 1 Feb 2009. The next day I receive a letter in which they offer me another job with a lower salary and job title. I decline this (found something else already with same pay as current job).

Now they phrase it such that I am breaching the contract. To be fair, I would be happy with ending the contract as they verbally announced, with the severance pay as dictated by Thai law.

As usual, you are receiving some appalling guidance on here, most of which is completely wrong. As an aside, it can be very dangerous for bar stool lawyers to provide advice which - bizarrely - seems to be taken at face value.

so let's get real.

The letter stating you are being laid off is effectively a redundancy letter. As such u are entitled to severance payment based on your length of employment. It is up to you if you choose to accept the lay-off.

They have been very clever (and are obviously aware of the severance payment laws) because they have then offered an alternative role. They are quite within their rights to do that. You are NOT being offered a lower salary - in effect your role has been made redundant and they are lawfully offering another replacement role on new terms. It's all legal and legit.

You have two choices. Take the new role at reduced terms or leave the firm and request severance. You are under no legal obligation to accept the new job.

Contrary to what people on here have said, the Labour Courts are very good and can (and do) enforce severance payments, even to farang. I know of several other TV posters who can personally back that up through their own experience.

He didn't say he got a redundancy letter, just a verbal notice and then a new job offer in writing.

How can they offer him a new job when he already has one with them?

very sophisticated reasoning - do you work for a law firm, by any chance?

irrespective of it being a letter or not, his role is being terminated. he has been given notice to that effect - end of story. They have now offered him a new job on new conditions. Not only are they quite within their rights to do that (albeit with associated resonsibilities), but i strongly suspect they got quite sophisticated legal advice before doing it. They have covered their <deleted> well.

The fact remains, he has two choices. Accept the end of his current role and seek severance under the relevant laws, or take the new role.

It's simple.

[jimmybkk]

If your salary is stated in your contract and they don't pay it then they're in breach of contract.

Write tehm a letter to that effect and go see the labour court and find out what you can do.

But is it worth the hassle, time and money? Laywers are expensive. In case you should win, does the other party have to pay all costs? My salary has gone up since I joined them and that new salary has never been confirmed in writing...

Actually, it is a bit more complicated that this:

On 30 December in a meeting they verbally tell me I am being laid off per 1 Feb 2009. The next day I receive a letter in which they offer me another job with a lower salary and job title. I decline this (found something else already with same pay as current job).

Now they phrase it such that I am breaching the contract. To be fair, I would be happy with ending the contract as they verbally announced, with the severance pay as dictated by Thai law.

As usual, you are receiving some appalling guidance on here, most of which is completely wrong. As an aside, it can be very dangerous for bar stool lawyers to provide advice which - bizarrely - seems to be taken at face value.

so let's get real.

The letter stating you are being laid off is effectively a redundancy letter. As such u are entitled to severance payment based on your length of employment. It is up to you if you choose to accept the lay-off.

They have been very clever (and are obviously aware of the severance payment laws) because they have then offered an alternative role. They are quite within their rights to do that. You are NOT being offered a lower salary - in effect your role has been made redundant and they are lawfully offering another replacement role on new terms. It's all legal and legit.

You have two choices. Take the new role at reduced terms or leave the firm and request severance. You are under no legal obligation to accept the new job.

Contrary to what people on here have said, the Labour Courts are very good and can (and do) enforce severance payments, even to farang. I know of several other TV posters who can personally back that up through their own experience.

It's up to him if he chooses to accept the lay off??? Wow - I know the labour laws here come down heavily in favour of the employee but never knew that they were actually allowed to either accept or reject termination of employment.

[quiksilva]

No, you missed the point jimmyk, his role is being terminated. Full stop, no discussion, no choice.

He does however have a choice, whether he wishes to accept a new role, with less remuneration.

What I wonder is whether his firm would still be obligated to pay severance, as he his employment has been terminated, even if he accepts the new role?

Edited January 12, 2009 by quiksilva

[jimmybkk]

Sorry, perhaps I needed quotation marks to clarify - but I thought Bendix statement that "It is up to you if you choose to accept the lay-off" was incorrect, in that I believe he has no choice whatsoever. Unless Bendix's use of the term "lay-off" referred to the redundancy payment?

[endure]

it depends what country you might be able to bring legal action against. Is this a Thai company? I seem to remember a clause somewhere saying 2 months severance pay is the law, but good luck enforcing it in a Thai court.

If its a US employer you are shit out of luck, but you might be legally entitled to accrued but unused vacation.

Europe I'm sure has more socialist rules.

FYI 'Europe' isn't a country - it's a geographical area consisting of 45 countries all with their own individual sets of laws.

[PattayaParent]

very sophisticated reasoning - do you work for a law firm, by any chance?

How did you know??? Lucky guess?

[endure]

If your salary is stated in your contract and they don't pay it then they're in breach of contract.

Write tehm a letter to that effect and go see the labour court and find out what you can do.

But is it worth the hassle, time and money? Laywers are expensive. In case you should win, does the other party have to pay all costs? My salary has gone up since I joined them and that new salary has never been confirmed in writing...

Actually, it is a bit more complicated that this:

On 30 December in a meeting they verbally tell me I am being laid off per 1 Feb 2009. The next day I receive a letter in which they offer me another job with a lower salary and job title. I decline this (found something else already with same pay as current job).

Now they phrase it such that I am breaching the contract. To be fair, I would be happy with ending the contract as they verbally announced, with the severance pay as dictated by Thai law.

As usual, you are receiving some appalling guidance on here, most of which is completely wrong. As an aside, it can be very dangerous for bar stool lawyers to provide advice which - bizarrely - seems to be taken at face value.

so let's get real.

The letter stating you are being laid off is effectively a redundancy letter. As such u are entitled to severance payment based on your length of employment. It is up to you if you choose to accept the lay-off.

They have been very clever (and are obviously aware of the severance payment laws) because they have then offered an alternative role. They are quite within their rights to do that. You are NOT being offered a lower salary - in effect your role has been made redundant and they are lawfully offering another replacement role on new terms. It's all legal and legit.

You have two choices. Take the new role at reduced terms or leave the firm and request severance. You are under no legal obligation to accept the new job.

Contrary to what people on here have said, the Labour Courts are very good and can (and do) enforce severance payments, even to farang. I know of several other TV posters who can personally back that up through their own experience.

He didn't say he got a redundancy letter, just a verbal notice and then a new job offer in writing.

How can they offer him a new job when he already has one with them?

very sophisticated reasoning - do you work for a law firm, by any chance?

irrespective of it being a letter or not, his role is being terminated. he has been given notice to that effect - end of story. They have now offered him a new job on new conditions. Not only are they quite within their rights to do that (albeit with associated resonsibilities), but i strongly suspect they got quite sophisticated legal advice before doing it. They have covered their <deleted> well.

The fact remains, he has two choices. Accept the end of his current role and seek severance under the relevant laws, or take the new role.

It's simple.

Surely if he's been made redundant AND THEN offered a new job he's entitled to both redundancy pay AND the new job rather than one or the other?

[chiangmaibruce]

The next day I receive a letter in which they offer me another job with a lower salary and job title. I decline this (found something else already with same pay as current job).

Now they phrase it such that I am breaching the contract.

Just wanted to clarify ... when you say you "found something else already", do you mean you left your job without giving the required period of notice and took up an alternative offer of employment? Or you have continued in your job pending sorting this all out?

I was in a similar position some years ago (but in another country), having been told my position was being phased out and then offered another role. Basically BS as the new role would have been the same as the old, just with a new title and huge pay cut. They tried to argue that a redundancy payment was not required as I was free to remain with the company in the new role. I chose the highway, not long after making my first ever trip to Thailand.

[simonphuket]

The next day I receive a letter in which they offer me another job with a lower salary and job title. I decline this (found something else already with same pay as current job).

Now they phrase it such that I am breaching the contract.

Just wanted to clarify ... when you say you "found something else already", do you mean you left your job without giving the required period of notice and took up an alternative offer of employment? Or you have continued in your job pending sorting this all out?

I was in a similar position some years ago (but in another country), having been told my position was being phased out and then offered another role. Basically BS as the new role would have been the same as the old, just with a new title and huge pay cut. They tried to argue that a redundancy payment was not required as I was free to remain with the company in the new role. I chose the highway, not long after making my first ever trip to Thailand.

What I meant was that I have a new job offer somewhere else starting next month. Still working for the old company, not a lot of fun right now as you can imagine.

Today had a talk with one of the directors. He basically stated that I should not try to get any severance pay, or else... Else = he will not cancel my work permit before the end of March so I cannot legally work somewhere else. He stated that I cannot have 2 work permits. He is talking about end of March because he gave me notice end of December, 90 days severance pay, so that is January, February, March. He will continue to pay me in that period, but knows dam_n well that my new job offer means to start per February 1. Otherwise they will find somebody else.

According to him, this '90-day severance pay' means that you still work for the company for 90 days, but are allowed to take days off for job interviews etc. This sounds like utter b#llocks to me. I thought that, irrespective of having found another job, they have to pay you, and that you can accept and start to work somewhere else already?

Btw, I guess he has to pay me my holidays pro rata for this year? How many we officially have minimum according to Thai law?

Thanks for all replies so far, very interesting!!

[jrbkk64]

Your first job is terminated. Your right, considering you were employed > 1year < 3 years, is one month notice or payment in lieu of notice + 3 months severance pay. If you take them to court after that you may be awarded "damage pay". Normally the maximum damage is 1 month per service year, in your case it would be max. 1 month.

The new job offer of your current employer does not change this right at all. You can take the offer and still have the right to above. Ofcourse if you want to maintain good relations you should negotiate about your "right" as stated above with your current employer.

Do NEVER resign officially unless you have been paid notice + severance. If they refuse to pay this than you should take them to court and I am 99% sure you will get what is your "right" under Thai labor law.

Edited January 13, 2009 by jrbkk64

[dotcom]

They have no money, I could take some of the inventory with me though, until they pay me out...

Hopefully you are just kidding because we have another word for this "theft".

[simonphuket]

They have no money, I could take some of the inventory with me though, until they pay me out...

Hopefully you are just kidding because we have another word for this "theft".

Sure, I'm not gonna lower myself to their level. If I want to get even, there are other ways. Having been the manager, I know too much what's happening. Just spread some words to the remaining clientele, and they have major problems. But, rather not do this, prefer to solve it in a professional way.

[satiariyan]

... or else... Else = he will not cancel my work permit before the end of March so I cannot legally work somewhere else. He stated that I cannot have 2 work permits...

Its perfectly legal to have more than one employer and more than one workpermit at the same time.

[PattayaParent]

What I meant was that I have a new job offer somewhere else starting next month. Still working for the old company, not a lot of fun right now as you can imagine.

Today had a talk with one of the directors. He basically stated that I should not try to get any severance pay, or else... Else = he will not cancel my work permit before the end of March so I cannot legally work somewhere else. He stated that I cannot have 2 work permits. He is talking about end of March because he gave me notice end of December, 90 days severance pay, so that is January, February, March. He will continue to pay me in that period, but knows dam_n well that my new job offer means to start per February 1. Otherwise they will find somebody else.

According to him, this '90-day severance pay' means that you still work for the company for 90 days, but are allowed to take days off for job interviews etc. This sounds like utter b#llocks to me. I thought that, irrespective of having found another job, they have to pay you, and that you can accept and start to work somewhere else already?

Btw, I guess he has to pay me my holidays pro rata for this year? How many we officially have minimum according to Thai law?

Thanks for all replies so far, very interesting!!

Severance pay is not related to your working notice period at all.

Go to the labour court and ask their advice.

You may even mention to your director that you have sought legal advice and that you know he is talking bullshit.

I beleive that you could cancel your work permit yourself? Do you have your termination in writing yet?

[simonphuket]

... or else... Else = he will not cancel my work permit before the end of March so I cannot legally work somewhere else. He stated that I cannot have 2 work permits...

Its perfectly legal to have more than one employer and more than one workpermit at the same time.

Really? More than one employer makes sense, sure. But my work permit, the blue book, I can have more than one? Sorry if I sound un-educated in this area, that's why your advice is so invaluable!

Re-cap: if he does n ot return my work permit, the blue book, then I can still go ahead with the new employer as of 1 February. He must of course arrange a new work permit. Does it make any difference wether my current boss hands me the blue book or not? Will it make the application for the new work permit take more time?

[simonphuket]

Severance pay is not related to your working notice period at all.

Go to the labour court and ask their advice.

You may even mention to your director that you have sought legal advice and that you know he is talking bullshit.

I beleive that you could cancel your work permit yourself? Do you have your termination in writing yet?

He does not do anything in writing... Afraid that can be used against him?? A real snake (not joking).

Is it true that I can cancel my work permit? He mentioned that the accountants/lawyers we use to handle all paperwork regarding permits, have to fill the necessary paperwork. Might be just the papers to cancel the work permit.

[dbrenn]

Severance pay is not related to your working notice period at all.

Go to the labour court and ask their advice.

You may even mention to your director that you have sought legal advice and that you know he is talking bullshit.

I beleive that you could cancel your work permit yourself? Do you have your termination in writing yet?

He does not do anything in writing... Afraid that can be used against him?? A real snake (not joking).

Is it true that I can cancel my work permit? He mentioned that the accountants/lawyers we use to handle all paperwork regarding permits, have to fill the necessary paperwork. Might be just the papers to cancel the work permit.

I have known a few farangs who have taken cases to the Labour Court, and in every case they were awarded the severence pay that they were entitled to by law. The Labour Court seems very fair, and usually leans towards the employee, as was the case when a Thai employer fired a friend of mind on a pretext that he was planning to start his own business. My friend took his employer to court and the severence pay was awarded in full. His employer initially refused to pay but came up with the money when the court threatened to sieze assets.

Get a lawyer who is familiar with the (very well defined) Thai Labour Law, and go to the Labour Court.

[gregb]

Contrary to what people on here have said, the Labour Courts are very good and can (and do) enforce severance payments, even to farang. I know of several other TV posters who can personally back that up through their own experience.

Just be real careful here before you pay any money to a lawyer for this. Bendix is correct when he says you will win at the labour court. I know 3 people who have been terminated, fought, and won their cases.

Collection on the other hand, is nearly impossible. The owner simply needs to sell the assets to a new company, and shut down the existing one. Think you can go after the owner personally even after winning in labour court? Guess again. The lawyers will tell you that it is possible, and after getting your money you'll get 101 excuses why it isn't working.

Face it, if the company is truly struggling and doesn't have the money, you will almost certainly win your case in court, and have a nice piece of paper to show for it. Just don't think you will get any money from a failing company. It ain't that easy.