Thai Labor Law And Severance Pay

[Loaded]

^I have, actually, though for obvious reasons I can't give details. Let's just say I'm familiar with organisations that voluntarily dot all the i's and cross all the t's. I'll try to locate and link the thread re. the Christian school (which I think was crossposted here, though it is a very long time ago).

The interpretation is that as long as the JOB ITSELF still exists, a teacher who is not allowed to remain in the position has effectively been terminated; thus, he is eligible for severance. This is why a distinction is made for truly 'temporary' contract jobs- not temporary employees!!! Otherwise, as I previously mentioned, there would be no full-time employees and no benefit obligations for any employer- which is why labour law is necessary.

I agree and this is an interesting read which seems to state that severance can actually kick in earlier than a full year of employment with non-renewal of a contract by the employer:

http://www.worldwideconsulting.com/thailand.htm

Lols

This Website can't even spell Thailand correctly: '...Generally, under Tailand employment laws...' and it's being used as a reference.

Anyway, this is the text you are referring to:

'Termination of Employment

Employment termination with cause (in which event the employer can terminate employment without notice and/or compensation) is governed by the provisions of Section 583 of the Civil and Commercial Code and Section 119 of the LPA, and includes gross negligence, willful disobedience, dishonesty or criminal act. When there is employment termination without cause, it is compulsory under employment laws that the employer make severance payment (in addition to notice) to the employee according to the length of unbroken service:

From 120 days but less than 1 year the amount is 30 days

1 year but less than 3 years the amount is 90 days

3 years but less than 6 years the amount is 180 days

6 years but less than 10 years the amount is 240 days

10 years and over the amount is 300 days'

I agree this says employment terminated without cause then the employer has to pay severance. But if a teacher reaches the end of his or her contract, that gives cause to end employment. Afterall, both parties agreed to end their working agreement on an agreed date. It's not 'without cause' if the contract expires. What is the point of a contract if it is meaningless?

[Scott]

I am following this closely. Where I work we are not renewing an unusually high number of employees. In one case, there is 'just' cause, with a paper trail and warnings. In a second, there is 'just' cause with no paper trail and it would be hard to support ('he said, she said). In the third, the position will be filled by a Thai national.

I spoke at length with the owner and expressed my concerns from a contractual basis. I was told that there is no reason to worry, they had been taken to court before and won. I also spoke to an attorney who said that in most of these cases, it is the employer who just 'folds' because it gets costly and time consuming to pursue.

So, now I am lost. I hate the idea of 'writing up' teachers everytime there is a complaint, but maybe that's the best recourse. In the past, I haven't because a lot of it is stuff that isn't directly related to education--it's things like breaking the dress code, drinking coffee in the classroom, sitting on the desks, etc.

I usually 'write them up' if it involves what would seem like a truly legal matter--such as 'hitting' or demeaning punishment, leaving the class unattended, excessive, unexplained (or unacceptable) absences, constant lates, tardies etc.

Thoughts from others would be appreciated.

[mopenyang]

^I have, actually, though for obvious reasons I can't give details. Let's just say I'm familiar with organisations that voluntarily dot all the i's and cross all the t's. I'll try to locate and link the thread re. the Christian school (which I think was crossposted here, though it is a very long time ago).

The interpretation is that as long as the JOB ITSELF still exists, a teacher who is not allowed to remain in the position has effectively been terminated; thus, he is eligible for severance. This is why a distinction is made for truly 'temporary' contract jobs- not temporary employees!!! Otherwise, as I previously mentioned, there would be no full-time employees and no benefit obligations for any employer- which is why labour law is necessary.

I agree and this is an interesting read which seems to state that severance can actually kick in earlier than a full year of employment with non-renewal of a contract by the employer:

http://www.worldwideconsulting.com/thailand.htm

Lols

This Website can't even spell Thailand correctly: '...Generally, under Tailand employment laws...' and it's being used as a reference.

Anyway, this is the text you are referring to:

'Termination of Employment

Employment termination with cause (in which event the employer can terminate employment without notice and/or compensation) is governed by the provisions of Section 583 of the Civil and Commercial Code and Section 119 of the LPA, and includes gross negligence, willful disobedience, dishonesty or criminal act. When there is employment termination without cause, it is compulsory under employment laws that the employer make severance payment (in addition to notice) to the employee according to the length of unbroken service:

From 120 days but less than 1 year the amount is 30 days

1 year but less than 3 years the amount is 90 days

3 years but less than 6 years the amount is 180 days

6 years but less than 10 years the amount is 240 days

10 years and over the amount is 300 days'

I agree this says employment terminated without cause then the employer has to pay severance. But if a teacher reaches the end of his or her contract, that gives cause to end employment. Afterall, both parties agreed to end their working agreement on an agreed date. It's not 'without cause' if the contract expires. What is the point of a contract if it is meaningless?

Wow! You caught the typo or misspelling in their writing. Congratulations!

Disregarding that sterling accomplishment on your part for the moment, are you aware that there are nations in the world where severance is required contemporaneously with a contract? No? Really, such places exist. Let's take Korea as an example. You work there under a contract and with a work visa for a year and you receive a year's severance. Work there six years under the same conditions and you receive six years of severance with each severance payment being equal to one month's salary of the annual contract you were working under at the time. You don't believe it? It can't happen? It would "make the contract meaningless?" Wrong. I did it. I got the six years of severance. Contracts and severance can exist at the same time. It's amazing what you can learn when you haven't spent your entire life teaching only in one country. So it is that Thailand 's Labour laws could and have been interpreted exactly along the same lines and based on what has been written here and elsewhere, it would be foolish not to pursue the question of severance where the employee is truly not voluntarily abandoning his or her position at the end of a contract but rather simply not being renewed by the employer for whatever reason.

[Loaded]

I'm not convinced.

According to the Website you quoted:

(1) Severance is not payable if employment is terminated with just cause (gross misconduct etc.)

(2) Severance is payable if employment is terminated without just cause (unfair dismissal etc)

If you were to categorize employment terminated on an agreed date in an agreement signed by both parties (contract), I think you would have to put that under (1).

I'm sure severance exists in Korea post contract and I'm very happy for you.

[mopenyang]

Well, it surely negates your "What is the point of a contract if it is meaningless?" as it clearly shows that such a situation can exist and contracts are not rendered "meaningless" only because severance is also required by law. Again, based on what has been written here and elsewhere, what does one have to lose by pursuing a claim for severance in Thailand where there is non-renewal by the employer at the end of a contract and the employee is not voluntarily leaving the position?

[Loaded]

Well, it surely negates your "What is the point of a contract if it is meaningless?" as it clearly shows that such a situation can exist and contracts are not rendered "meaningless" only because severance is also required by law. Again, based on what has been written here and elsewhere, what does one have to lose by pursuing a claim for severance in Thailand where there is non-renewal by the employer at the end of a contract and the employee is not voluntarily leaving the position?

The question is rhetorical and not literal.

Still no evidence this has ever happened in Thailand whether it's a farang teacher or a Thai employee. Can you really believe a Thai employer would allow this situation?

[singa-traz]

I'm not convinced.

According to the Website you quoted:

(1) Severance is not payable if employment is terminated with just cause (gross misconduct etc.)

(2) Severance is payable if employment is terminated without just cause (unfair dismissal etc)

If you were to categorize employment terminated on an agreed date in an agreement signed by both parties (contract), I think you would have to put that under (1).

I'm sure severance exists in Korea post contract and I'm very happy for you.

And if the employer continuously uses fix term contract for the same position, the court will recognize that this is actually a permanent position within the company, and that the employer is trying to abuse those fix term contract, to avoid paying severance pay, when due.

[markg]

Can we use this example.

You work for a language school, lets say ECC, and they farm you out to one school. You've worked for ECC for 3 years and last year, signed your 3rd consecutive one-year contract.

According to some on here, that means you've worked for that school, via ECC for 3 consecutive years, not 3 periods of 1 year totaling 3 years.

With me so far?

Ok, on March 20th this year, at the end of the academic year, the school decide that they dont require the services of ECC anymore, but would rather sort out the provision of English teachers themselves.

Your job at the school is still available..........but you were never employed directly by the school, and your job at ECC is now NOT available.

ECC say they have no more work for you and that your contract will naturally expire on March 20th. Lets assume you did a good job and have done nothing to warrant being sacked.

Question. Do ECC have to pay severance?

**Please note, i use the name ECC for illustrative purposes only. I do not work for ECC nor have any axe to grind against them**

[mopenyang]

Well, it surely negates your "What is the point of a contract if it is meaningless?" as it clearly shows that such a situation can exist and contracts are not rendered "meaningless" only because severance is also required by law. Again, based on what has been written here and elsewhere, what does one have to lose by pursuing a claim for severance in Thailand where there is non-renewal by the employer at the end of a contract and the employee is not voluntarily leaving the position?

The question is rhetorical and not literal.

Still no evidence this has ever happened in Thailand whether it's a farang teacher or a Thai employee. Can you really believe a Thai employer would allow this situation?

"Literal" = ijwt wrote:

"^I have, actually, though for obvious reasons I can't give details. Let's just say I'm familiar with organisations that voluntarily dot all the i's and cross all the t's. I'll try to locate and link the thread re. the Christian school (which I think was crossposted here, though it is a very long time ago).

The interpretation is that as long as the JOB ITSELF still exists, a teacher who is not allowed to remain in the position has effectively been terminated; thus, he is eligible for severance. This is why a distinction is made for truly 'temporary' contract jobs- not temporary employees!!! Otherwise, as I previously mentioned, there would be no full-time employees and no benefit obligations for any employer- which is why labour law is necessary."

Also, it's not about what "a Thai employer would allow this situation" but rather what Thai law requires. There wouldn't be labour laws anywhere if it only always came down to what an employer "would allow" in any given situation.

[Loaded]

And if the employer continuously uses fix term contract for the same position, the court will recognize that this is actually a permanent position within the company, and that the employer is trying to abuse those fix term contract, to avoid paying severance pay, when due.

Opinion or fact? IE are you a judge?

[Loaded]

"Literal" = ijwt wrote:

but only produced anecdotal evidence... so far.

[Loaded]

I phoned my local labour office and it was confirmed that severance isn't payable.

Please phone your local labour office and ask the same question if you really want to know.

[mopenyang]

And yet, it would appear that at least one legal scholar disagrees with what you were told while various decisions of the Thai Supreme Court now restrict the number of cases where severance does not have to be paid:

http://www.pattayamail.com/802/business.shtml

Please note this is not anecdotal.

I'll say it again, given what is written in the link above, one would be foolish not to pursue the question of severance if his or her contract were arbitrarily not renewed by an employer.

[markg]

And yet, it would appear that at least one legal scholar disagrees with what you were told while various decisions of the Thai Supreme Court now restrict the number of cases where severance does not have to be paid:

http://www.pattayamail.com/802/business.shtml

Please note this is not anecdotal.

I'll say it again, given what is written in the link above, one would be foolish not to pursue the question of severance if his or her contract were arbitrarily not renewed by an employer.

So if i m reading this correctly, it would appear that a number of renewed one-year contracts, which appear normal in teaching, DOES not constitute temporary work, and in fact, (say) 3 contracts of 1 year is actually 3 consecutive years work.

This would 'appear' to mean that severance pay is due at the natural end of a contract. (assuming that there are no factors of negligence etc that would be a cause for sacking)

So in my example above, where someone worked for 3 years for ECC, then they could expect severance pay.

Mopenyan, have i read it correctly?

[Scott]

Not to throw a spanner in the works, but if there is an end-of-contract bonus paid, does this constitute severence (or a portion, thereof). If it's given every year, would it then negate the severence due after several years of service?

[mopenyang]

I read it that walking away from potential severance would be a foolish thing to do. It's clear that employees have some legal remedies available to them when they are arbitrarily not renewed after functioning x amount of time in what is really a permanent position. Nothing ventured. Nothing gained.

[singa-traz]

And if the employer continuously uses fix term contract for the same position, the court will recognize that this is actually a permanent position within the company, and that the employer is trying to abuse those fix term contract, to avoid paying severance pay, when due.

Opinion or fact? IE are you a judge?

No, but have some experience in severance pay as well as have previously seek advises from a lawyer.

I know, it's a disturbing news that a Thai law does protect both Thai and Farang employees against their employers.

[Loaded]

And yet, it would appear that at least one legal scholar disagrees with what you were told while various decisions of the Thai Supreme Court now restrict the number of cases where severance does not have to be paid:

http://www.pattayamail.com/802/business.shtml

Please note this is not anecdotal.

I'll say it again, given what is written in the link above, one would be foolish not to pursue the question of severance if his or her contract were arbitrarily not renewed by an employer.

Interesting link - thank you.

It's still not clear how a particular labour office/court would interpret this though in the context of a foreign teacher. IE you would need to employ a solicitor with expertise in labour law.

My local labour office (Chiang Mai) certainly doesn't seem to be aware of what is, or isn't, a fixed-term contract as defined by the Supreme Court. Give yours a call and see what they say.

[mopenyang]

Based on what is written in the link, if someone felt they were being denied severance that should be granted incident from arbitrarily not being renewed in what is essentially a permanent position, why not appeal it to the next higher level if they are not satisfied with the decision of the local Ministry of Labour office? It's clear this is an evolving labour law area but the law does seem to be expanding when it comes to the matter of severance as demonstrated by the citation of two Supreme Court rulings in the article.

One thing's for sure. If you take "no" for an answer at the first level and just walk away, you'll never get severance that may actually be due you.

[paully]

The interpretation is that as long as the JOB ITSELF still exists, a teacher who is not allowed to remain in the position has effectively been terminated; thus, he is eligible for severance.

That's the vital bit, IJWT - it would be akin to a unfair dismissal claim/redundancy payment in the West: ie, the employer claims that the employee's job is no longer required or does not exist, but in fact it does.

The old classic (and I've seen it happen in the UK) is where an employee is told that their job is (sadly) no longer required and they are immediately let go but, lo and behold, a week later a job ad for exactly the same position at the same place of work appears in the newspapers. Oops.

Edited February 9, 2009 by paully

[Ijustwannateach]

Loaded, I don't know exactly what dog you have in this fight, but it sure seems important to you. Let's put the burden of proof on YOU: Can you come up with a recent MOL case which has gone to court and in which the Thai laws which have been quoted have NOT been followed? I'm all for giving equal positions equal time, but I no more intend to allow this thread to be used as a boogeyman scare against teachers seeking severance according to the Thai law which has been extensively spelled out- IMHO- than I would, say, another thread being used to scare teachers without degrees from seeking TEFL jobs. Several posters with experience have acknowledged that the law pretty much operates the way it says it does. No, none of us are judges, not even you, but we do keep track of these things and there are no signs- even anecdotally- that severance doesn't operate fairly. If it's not clear from my previous explanations WHY severance needs to operate in the case of a lapsed contract: It is the normal way the law works in Japan, Korea, and here as far as I know, and for the same reason: If a company could employ someone 40 years without any further obligation to them, simply by 'nonrenewal of contract'- what a great way to get out of pension and retirement obligations!!! The people who wrote these labour laws aren't stupid, and they know how greedy company management can be. Workers need to be protected. If courts start to make decisions the way you are saying, there will be a liberal communist backlash like you can't imagine.

I'd say it's the official position of Thaivisa Teachers Subforum: Seek severance if at all in doubt.

[wangsuda]

Thank you all for posting on this thread. While TerryLH answered my question on page one, the stimulating discussion here should (I hope) enlighten teachers in Thailand to their rights. And that, IMNSHO, is what's truly important.

[Loaded]

Loaded, I don't know exactly what dog you have in this fight, but it sure seems important to you. Let's put the burden of proof on YOU:

Labor Protection Act B.E. 2541 (1998)

Chapter 1

General Provisions

Section 17

An employment contract shall expire when the specified period in the employment contract expires without any requirement for advance notice.

Where no specific term is set out in the employment contract, the employer or the employee may terminate the employment contract by giving advance notice thereof at or before any time of payment, to take effect as of the following time of payment. However, not more than three months' advance notice need be given.

In the event that an employer gives a notice of termination of the contract of employment, if the employer does not specify a reason therefore in the notice of termination, the employer is thereafter stopped from relying on that reason under Section 119.

In terminating an employment contract under Paragraph 2, an employer may pay basic pay in lieu of the requisite notice and dismiss the employee immediately, and it shall be deemed that such payment of basic pay to the employee under this paragraph is payment to the employee of remuneration in accordance with Section 582 of the Civil and Commercial Code.

Advance notice under this Section shall not apply to a termination of employment pursuant to either Section 119 of this Act or Section 583 of the Civil and Commercial Code.

( http://www.thailaws.com/index_thai_laws.htm )

It seems clear to me. Severance is only discussed when there has been termination of the contract. The first sentence is clear.

[Loaded]

Thank you all for posting on this thread. While TerryLH answered my question on page one, the stimulating discussion here should (I hope) enlighten teachers in Thailand to their rights. And that, IMNSHO, is what's truly important.

I agree. I think most people will agree a good discussion of a topic that isn't clear.

IJWT

I don't like the way you threaten to close a thread when it is not sympathetic to your position. You say it's Thai law, well who has received severance after they completed a contract? - NOBODY. Why is posting this a scare story - utterly ridiculous

I contacted my local labour office and asked them. Have you? It's very easy.

Why would schools employ teachers on 1-year contracts if it wasn't a way to avoid financial obligations? It works.

Close the thread if you wish. I won't post again on a thread where I've been threatened.

You, and I, may not like the current situation but it's reality until something changes

[Ijustwannateach]

I haven't threatened to close the thread and I haven't threatened you- let's just say I've taken a strong stand in favour of severance as a balancing factor on the thread.

My challenges to you (that you're not a judge, can you post a link) are only reflections of your own challenges to other posters on the thread. My post MAINLY addresses the topic- go back and review it if you don't believe me. Post again on the thread or not as you like.

[Ijustwannateach]

^P.S. 'Contract expiring' is still not an exception under the severance law, and the definition of a contract expiring does not imply severance is not due- it is a clarification of the contract period.

Severance rules! Everyone go for severance!

P.P.S. One year contracts can help you escape severance as long as you fire everyone before the end- otherwise, by definition and convention, people become full-time employees after a suitable period. Sorry if it's bad news for employers out there (well, not really).

P.P.P.S.

If I were any doubt as to how the law worked, I would call the local (national) labour office, but I am in no such doubt. Perhaps I am wrong and somehow deluded, but it will take an actual case which contradicts my understanding of the law before I felt I needed to go out of my way.

[Loaded]

Chapter 11

Severance Pay

Section 118

An employer shall pay severance pay to an employee whose employment is terminated, as follows: PARAGRAPH 1

An employee who has worked for at least 120 consecutive days, but for less than one year shall be paid basic pay for not less than 30 days at the most recent rate of basic pay received by him or not less than the basic pay he received for work performed in the last 30 days in respect of an employee who is rewarded on the basis of his output;

An employee who has worked continuously for at least one year but less than three years shall be paid basic pay for not less than 90 days at the most recent rate of basic pay received by him or not less than the basic pay for work performed in the last 90 days in respect of an employee who is rewarded on the basis of his output;

An employee who has worked consecutively for at least three years but less than six years shall be paid basic pay for not less than 180 days at the most recent rate of basic pay received by him or not less than the basic pay for work performed in the last 180 days in respect of an employee who is rewarded on the basis of his output;

An employee who has worked consecutively for at least six years but less than 10 years shall be paid basic pay for not less than 240 days at the most recent rate of basic pay received by him or not less than the basic pay for work performed in the last 240 days in respect of an employee who is rewarded on the basis of his output;

An employee who has worked for more than 10 years consecutively shall be paid basic pay for not less than 300 days at the most recent rate of basic pay received by him or not less than the basic pay for work performed in the last 300 days in respect of an employee who is rewarded on the basis of his output.

Termination of employment in this Section shall mean any act of an employer which prevents an employee from continuing to work and receive his basic pay therefore, whether due to the termination of an employment contract or for any other reason, and shall include the situation where an employee cannot work and be paid because the employer can no longer operate its business.

The provisions of Paragraph 1 shall not apply to an employee whose period of employment is of a fixed duration and whose employment is terminated at the expiration of that duration.

Employment of a fixed duration referred to in Paragraph 3 shall be said to exist in the case of employment on a special project, which is not in the normal way of business or trade of the employer, where there is a fixed schedule for commencement and completion of work; or for work of a temporary nature with a fixed schedule for its commencement or completion; or for seasonal work in respect of which employees are only engaged during that season; provided that the work must be completed within a period of two years and the employer and employee have entered into a written agreement at or prior to the commencement of employment.

Edited February 10, 2009 by Loaded

[Ijustwannateach]

The 'fixed duration' clause is what we were talking about above, meaning that the job is a temporary position, not that the teacher is a temporary employee. If a certain teaching job is only needed temporarily, they don't have to give severance to the employee who takes it.

From your own post:

Employment of a fixed duration referred to in Paragraph 3 shall be said to exist in the case of employment on a special project, which is not in the normal way of business or trade of the employer, where there is a fixed schedule for commencement and completion of work; or for work of a temporary nature with a fixed schedule for its commencement or completion; or for seasonal work in respect of which employees are only engaged during that season; provided that the work must be completed within a period of two years and the employer and employee have entered into a written agreement at or prior to the commencement of employment.

Sorry, but this *is* the way it works.

[Loaded]

Sorry, but this *is* the way it works.

That's been discussed already on this thread. There was good link to an article in the Pattaya Mail. It raised doubts but did not mention teachers specifically.

What did your local labour office say when you phoned them?

[Ijustwannateach]

Thanks anyway for re-posting the relevant laws, Loaded. I'm sure our readers can work it out for themselves (or they can call the local relevant authorities and/or their lawyers).