Severance Pay

[bucca]

I worked for a company in thailand and every three months they renewed my contract upto now which is 9 months am I due any severance pay?

[sbk]

moving to jobs forum

[mikecwm]

Are you serious?

[Sunbelt Asia]

If the company terminates the contract you are due 30 days severance if you work more than 120 days but less than one year. The fact that it is a fixed term contract does not necessarily negate the need for severance pay.

At the end of the agreement, if your employer chooses not to renew your contract, you would only be entitled to 1 month of severance. But you will not be able to obtain compensation for advance notice as the expiry date of the contract is considered advance notice.

However, if the employer terminates the contract before the expiry date then you must be given 30 days advance notice. Should the employer fail to give advance notice, then compensation must be provided.

If the employer refuses to provide severance then you have the option to go to the Labor Department and, if needed, Labor Court.

[sunbelt][/sunbelt]

.

[bucca]

Thank you for your advise, If I do not receive 1 months severance pay I will contact your company.

[OriginalPoster]

If the company terminates the contract you are due 30 days severance if you work more than 120 days but less than one year. The fact that it is a fixed term contract does not necessarily negate the need for severance pay.

At the end of the agreement, if your employer chooses not to renew your contract, you would only be entitled to 1 month of severance. But you will not be able to obtain compensation for advance notice as the expiry date of the contract is considered advance notice.

However, if the employer terminates the contract before the expiry date then you must be given 30 days advance notice. Should the employer fail to give advance notice, then compensation must be provided.

If the employer refuses to provide severance then you have the option to go to the Labor Department and, if needed, Labor Court.

[sunbelt][/sunbelt]

.

Does it follow from that that if you have a single 12 month contract that at the end of that term that they must pay you a 13th month if they don't renew. That would be hard to believe. Isn't a common reason for a fixed term employment contract to avoid putting people on staff and having to pay them benefits, severance, etc?

Edited June 30, 2011 by OriginalPoster

[Soutpeel]

Thank you for your advise, If I do not receive 1 months severance pay I will contact your company.

Why would you contact a legal company over 1 months severance ?....you would lodge your claim with the labour office where you WP was issued

[4evermaat]

Thank you for your advise, If I do not receive 1 months severance pay I will contact your company.

Why would you contact a legal company over 1 months severance ?....you would lodge your claim with the labour office where you WP was issued

Assuming of course, that they did issue a legit work permit.

[Soutpeel]

Thank you for your advise, If I do not receive 1 months severance pay I will contact your company.

Why would you contact a legal company over 1 months severance ?....you would lodge your claim with the labour office where you WP was issued

Assuming of course, that they did issue a legit work permit.

Whether there is a legit WP in place is actually is actually irrelevant per se, the DOL will concede that you should have had a WP but it appears they don not not prosecute in cases such as this, so this would not stop a claim as such.

[BigJohnnyBKK]

+1 and yes indeed to all questions.

If you can hang in there past the 1-year mark it goes up to 3 months.

Work Permit is irrelevant, unless the employer claims you didn't work as long as you did, or not continuously, etc and you can't prove otherwise. A regular stream of payslips will suffice as evidence.

Short-term/long-term contract irrelevant, as long as you were de facto employed as part of the normal mainstream business, if there were permanent staff doing the same duties, same hours location etc this is a shoe-in. If it was truly a short-term special project not part of the normal business then might be an issue.

This is one area where Thailand is world-class, much more generous and effective than my home the USA. The Labor Court is very pro-employee, AFAIK not subject to intimidation by the richest/most well-connected hi-so employer, they take the employee's side as much as possible - within the rule of law, truly commendable for this country, as much an exceptional phenomenon, the skytrain/subway example of the legal system here.

And it's true you don't need a lawyer, they will provide you with the assistance you need, just go in with all the paperwork you can get your hands on - ideally you kept the copies of the corporate registration with the true owner's information when you had to leave the country to get your first non-O in conjunction with your WP? Otherwise that's findable on the web, but requires a savvy Thai, perhaps the public lawyers at the labor office might even help with that if they're in a good mood. If you're in Bangkok, the court's offices are along Rama IV - start out at the subway stop on the side opposite Hualongphong station, head back toward Silom area, on the right within 1km, just after you pass under the highway overpass on your right. The office with the free lawyers to help you is on the ground floor of the smaller building on your left just after you come in the gates, you'll see all the busloads of terminated factory workers waiting their turn, but you'll be able to just wander in and ask to speak with an English speaking person to help you get started. Obviously be patient, dress well, act respectful etc etc.

If you do want to get a lawyer, make sure it's one with labor court experience and they should work on a percentage-only basis. And if they do so means you're 99% sure of winning.

Re the severance pay, they need to give you notice in writing more than 30 days before the end of your last regular monthly pay period, so if you happen to work 9 days past that point they need to give you 39 day's notice, etc.

If they don't do that, add another month's "in lieu" payment to the severance pay required by the law.

Note this is not due if you resign or are fired for cause (stealing, damaging the business in some way) but the burden's on them to prove that.

Note the law specifically exempts teachers in private schools, include the headmaster - there's supposed to be a fund for equivalent rights at the Education Dept, but apparently no one's tried that route yet.

And to anyone with Thai employees, make sure you plan for this before terminating them, even if for gross incompetence. If they were with you for 4+ years' you are required to pay six months' salary.

Just realize if the employer doesn't cave upon receiving the notice from the labor court, it can take well over a year if they want to drag it out, but they will have to pay if you hang in there.

Note that I speak from hands-on, hard-won experience, right through over a year to the final hearing.

[4evermaat]

well said. although the usa now you can get up to a year or more of unemployment, when you factor in state/federal extensions. I got like 10-12 months or so at the full rate of $330 USD a week. I unfortunately didn't know about Thailand at the time. This would have been a great place to seek employment

Edited July 6, 2011 by 4evermaat

[BigJohnnyBKK]

well said. although the usa now you can get up to a year or more of unemployment, when you factor in state/federal extensions. I got like 10-12 months or so at the full rate of $330 USD a week. I unfortunately didn't know about Thailand at the time. This would have been a great place to seek employment

But keep in mind this is a lump-sum compensation for getting the sack, mandated by the state but paid for by the employer, and one for which non-resident "guest workers" qualify. Quite a different beast and totally separate from any unemployment/welfare support entitlements, not a problem if you immediately jump into another job, or end up staying on a tourist visa whatever.

[bucca]

I went to the labour Dept and they said I receive 1 months pay, the company agreed with them once they received a phone call from the Labour Dept. So now just waiting for my pay. Thanks for all the advise

[CWMcMurray]

glad to here that you have received a good result.

[Yumthai]

At the end of the agreement, if your employer chooses not to renew your contract, you would only be entitled to 1 month of severance. But you will not be able to obtain compensation for advance notice as the expiry date of the contract is considered advance notice.

What if your employer want to renew your contract at the end of the agreement however you don't agree (so decline the new contract) with the terms and conditions (whatever they are new or same), will you still get a severance pay?

[Soutpeel]

At the end of the agreement, if your employer chooses not to renew your contract, you would only be entitled to 1 month of severance. But you will not be able to obtain compensation for advance notice as the expiry date of the contract is considered advance notice.

What if your employer want to renew your contract at the end of the agreement however you don't agree (so decline the new contract) with the terms and conditions (whatever they are new or same), will you still get a severance pay?

No you would not be entitled to severance in your example

[Sunbelt Asia]

After consulting with the Ministry of Labor today, the official there told our lawyers that if an employee refuses to sign a new contract it is not seen as voluntary resignation and severance pay will be due since it is the employer who arranges the employment agreement. A decision by the employer to not renew the new contract would also require severance.

[sunbelt][/sunbelt]

[Yumthai]

After consulting with the Ministry of Labor today, the official there told our lawyers that if an employee refuses to sign a new contract it is not seen as voluntary resignation and severance pay will be due since it is the employer who arranges the employment agreement. A decision by the employer to not renew the new contract would also require severance.

[sunbelt][/sunbelt]

Great! ...so that changes many things!

Another question:

Let's say someone has a 6 months contract starting from 2 November 2009 to 30 April 2010 (it is clearly stated in the contract that "the company hires the employee for a fixed term of 6 months from 2 November 2009 to 30 April 2010")

Then on 1 May 2010 this contract is extended till 31 October 2010 (so strictly 6 months more)

At the term (31 October 2010) the employee refuses to sign a new contract (although the company offers to renew)... how many days of severance pay would be due? 60 or 90 days?

Actually according to the dates it misses 1 day to get 1 full year however it is clearly written 6 months in the contract and moreover the 1 November 2009 is a Sunday (official non working day) so the employee could have never started working on the 1st.

Many thanks for your reply

[4evermaat]

After consulting with the Ministry of Labor today, the official there told our lawyers that if an employee refuses to sign a new contract it is not seen as voluntary resignation and severance pay will be due since it is the employer who arranges the employment agreement. A decision by the employer to not renew the new contract would also require severance.

[sunbelt][/sunbelt]

That is very odd. So the employer would have to NOT offer a new contract in order to fire the worker with no more payment obligation? Or does the employee get paid no matter what?

If this is the case, what's the point of the contract? Should employers just reserve 1 month pay for all their contract employee?

Edited July 26, 2011 by 4evermaat

[Yumthai]

After consulting with the Ministry of Labor today, the official there told our lawyers that if an employee refuses to sign a new contract it is not seen as voluntary resignation and severance pay will be due since it is the employer who arranges the employment agreement. A decision by the employer to not renew the new contract would also require severance.

[sunbelt][/sunbelt]

That is very odd. So the employer would have to NOT offer a new contract in order to fire the worker with no more payment obligation? Or does the employee get paid no matter what?

If this is the case, what's the point of the contract? Should employers just reserve 1 month pay for all their contract employee?

After asking at the Labor Dept. they told me exactly the same, i.e. Severance Pay is due after termination (except resignation or been fired for serious case) of the contract whether a renewal is offered or not. Obviously if the employee agrees with new terms there is no SP.

As for my personal case, although my ex-employer offered me a new contract and after claiming at Labor Dept. it took 2 weeks before I get my 1 month SP cheque

Thanks again Sunbelt for your wise and useful advice :jap: