Severance Pay Calculation: Does It Include Notice Period?

[welovesundaysatspace]

The following situation:

An employee is terminated without cause. He has worked for more than 119 days. He is entitled to severance pay. In the Employment Contract, the Employer agreed to give advance notice of 6 pay periods. Including these 6 pay periods, the employee would have worked 17 months. Thus, he would be entitled to get severance pay of 90 days at the last wage rate. Excluding these 6 pay periods, the employee would have worked 11 months. Thus, he would be entitled to get severance pay of only 30 days at the last wage rate.

Question: When calculating severance pay, will the notice period be included in that calculation? My understanding, and that's how my lawyers think and also how this website thinks, an advance notice defines the last official/contractual day of working: Your employment will be terminated in 6 months. Thus, the employee is actually working, at least officially/contractually, even if then company tells him to not come to work anymore. However, I also heard other opinions, so I would like to double check with you guys.

Related to that, a fixed annual bonus of 1 month salary would be affected by that, too.

Edited August 1, 2012 by welovesundaysatspace

[Soutpeel]

The labour act does not address this, or notice period, but the rational you have applied is correct.

If the company give you 6 months notice all they are doing is stating their intention, that you will not be employed in 6 months time, but for those 6 months you are still working for that company, paying tax, drawing a salary etc, so the severance for the whole work period would applicable

However I would be a little concerned about the not going to work for the 6 months aspect, even if they tell you not to come, as they may use this to terminate early, stating you havent turned up for work for X number of days, and you are terminated immediately and your contract is voided, as typically on a notice period you are not even allowed to take leave.

Call me cynical if you wish, but typically companies will try and screw an employee anyway they can when it comes to severance and bonus's

[FritsSikkink]

You need to be working for an uninterrupted period. While your contract is until a certain time you could get problems (neglecting your duty without reason for 3 consecutive workdays or violating work rules) if you are not working during that time.

http://www.mol.go.th/sites/default/files/images/jpg/01.pdf

[edwardandtubs]

I can tell you for sure that the notice period is not included in the calculation for severance pay. However, the employee is entitled to notice of the period to the end of the current month plus a further one month. If he did not receive notice, he is entitled to notice pay of whatever he should have been paid in the notice period. So if he was terminated on 15 June he is entitled to pay between 16 June and 31 July.