How Employers Can Dismiss an Employee in Thailand and Calculate Termination Payments

The expensive mistake is often procedural rather than mathematical: access is cut off, the employee is told the job is over, and only then does the company ask whether severance is due or whether misconduct can be used as the legal basis. Before that conversation, establish the facts that drive the rest of the process: the contract, start date, payroll date, continuous service and the actual reason management wants the employment to end.

Contract type matters first. An indefinite contract falls under the written-notice framework in Section 17. A probationary contract is not a separate termination-free category; Section 17 treats it as indefinite. A genuine fixed-term contract can expire without advance notice, but that does not automatically remove severance rights. The Section 118 fixed-term exception is narrow and tied to qualifying project, occasional or seasonal work that meets the statutory conditions, including the written-contract requirements.

Length of service is the next input. It should be tested as continuous service, not simply by looking at the employee's current title or most recent document. The payroll date also needs to be confirmed because ordinary notice for an indefinite contract is linked to wage-payment dates. Two monthly paid employees dismissed on different days in the cycle can therefore have different effective termination dates even though they are on the same salary frequency.

Then classify the proposed reason. An ordinary dismissal, a Section 119 dismissal for specified serious causes, and a technology-driven reorganisation under Sections 121 and 122 are not interchangeable routes. Pause the standard process where protected status may be involved, including pregnancy, the exercise of current family-leave rights, participation in labour demands or union activity, or membership of an employees' committee. A foreign employee also creates a separate immigration and work-permit workstream, but that should be handled alongside — not instead of — the employment-law calculation.

A universal '30 days' rule is a poor way to plan a Thai termination. For an indefinite contract, Section 17 links statutory notice to the wage-payment cycle. Where the contract does not set another permissible period, written notice must be given on or before a wage-payment due date so that termination takes effect on the next due date. The Act does not require advance notice of more than three months.

That structure means monthly pay does not automatically equal exactly 30 calendar days of notice. If wages are due at month-end and notice is delivered before the relevant payroll date, the following payroll date becomes the key termination point. Miss that cut-off and the employee may remain entitled through a later date. Mapping the notice date, payroll date and intended end date is more reliable than inserting 'one month' into every termination letter.

The employer can decide not to keep the employee at work for the entire notice period. Section 17 allows the employer to pay wages through the effective termination date that notice would have produced and end the working relationship immediately. Keep that amount as its own category: it is notice-related pay, not a substitute for statutory severance where severance is due.

There are important exceptions. A properly supported Section 119 dismissal does not require the ordinary advance notice. A reorganisation caused by the introduction or change of machinery or technology is governed separately by Section 121, which requires at least 60 days' advance notice to the affected employees and the Labour Inspector; failure to follow that route has separate financial consequences, and Section 122 can create additional special severance for some longer-serving employees.

Fixed-term language is another area where shortcuts fail. A true fixed-term contract can expire without ordinary notice, but the severance exemption is much narrower and depends on the statutory type of temporary work and the way the contract was made. The label on the document is not enough if the underlying job does not fit the legal exception.

Statutory severance under Section 118 is a separate entitlement driven mainly by continuous service and the fact of employer-initiated termination. With less than 120 days of service, no minimum severance arises under Section 118 unless the contract, collective terms or employer policy gives the employee something more favourable. Once the employee reaches 120 days, the statutory tiered scale applies.

The thresholds should be applied literally, not rounded by anniversary. From 120 days to less than one year, the minimum is 30 days of last wages; one to less than three years, 90 days; three to less than six, 180; six to less than ten, 240; ten to less than twenty, 300; and twenty years or more, 400 days. The 400-day tier was added in 2019, so older summaries that stop at 300 days are obsolete.

'Last wages' also deserves more care than simply copying the basic-salary field from payroll. If an employee receives regular amounts that legally form part of wages, their treatment may differ from a discretionary benefit or reimbursement. The name attached to a payment is not conclusive; the company should look at what the payment is for and the terms on which it is earned.

Severance does not absorb the rest of the termination account. The same employee may also be owed pay in lieu of notice, accrued or proportional annual leave, wages already earned and contractual commissions, bonuses or benefits if their governing terms make them payable. A clean final settlement therefore separates each legal basis instead of producing one unexplained 'termination compensation' figure.

Section 119 and the narrow fixed-term severance exception can change the result, but they should be tested after the ordinary Section 118 position is clear. Starting with the exception tends to encourage weak classifications and poor records.

Section 119 is not a general licence to relabel poor performance or workplace conflict as 'dismissal without severance'. It lists specific grounds: dishonesty in the performance of duties or an intentional criminal offence against the employer; wilful damage; negligence causing serious damage; certain breaches of lawful and fair work rules or orders; absence without justifiable reason for three consecutive working days; and imprisonment under a final judgment, with an additional limitation for negligent or petty offences.

Work-rule breaches are a common source of overreach. Ordinarily, Section 119 requires a prior written warning for breach of a lawful and fair rule or order. The warning remains effective for no more than one year from the date of the offence. A genuinely serious breach can remove the warning requirement, but 'serious' is not whatever management chooses to call the incident after the event; the underlying facts still have to support that classification.

The absence ground is also precise: three consecutive working days without a justifiable reason, even if a holiday falls between them. The imprisonment ground requires a final court judgment. Where the offence was negligent or petty, the statutory exception is tied to the offence having caused damage to the employer.

Timing matters as much as the ground itself. If the employer relies on Section 119 to withhold ordinary severance, the specific factual cause must be stated in the termination letter or communicated at the time of termination. A cause that was not identified then cannot simply be introduced later as a new defence. A vague label such as 'disciplinary breach' is therefore a poor substitute for the actual event relied upon.

The evidence should pre-date the dismissal. Depending on the allegation, that can mean the work rules, written warnings, attendance data, emails, incident records, investigation material or proof of damage. Ordinary underperformance does not become a Section 119 case merely because the employer is unhappy with the result. Where the facts or protected status are disputed, legal review before the dismissal is usually cheaper than trying to reconstruct the case afterwards.

A termination statement is easier to control when it is built as separate legal buckets. Start with wages and other remuneration already earned. Add pay in lieu of notice if the employee is taken out of work before the date ordinary notice would have produced. Add Section 118 severance where it applies. None of those categories cancels the others simply because they are paid at the same time.

Annual leave needs its own Section 67 analysis. Where the employer terminates for a reason other than Section 119, the employee is entitled to wages for the proportional annual leave for the termination year. Accumulated unused annual leave that has already accrued is payable on termination even where Section 119 applies. A zero-severance outcome under Section 119 therefore does not mean there is automatically nothing to pay for leave.

Bonuses, commissions, allowances and similar items should not be treated as automatically payable or automatically forfeited. Their outcome depends on the employment contract, employer policy, the terms of the particular scheme and whether the employee had earned the entitlement by the termination date. A recurring payment may also raise a separate question about whether it legally forms part of wages. Payroll labels do not decide that issue on their own.

Section 70 contains a specific short deadline that should be stated precisely. When the employer terminates the employee, wages, overtime pay, holiday pay and holiday overtime pay already due must be paid within three days from termination. That three-day rule should not be casually extended to every possible termination payment without checking the legal basis and due date for the particular item.

A useful final statement therefore shows earned wages, notice-related pay, statutory severance, leave and contractual entitlements on separate lines. It is easier for management to approve, easier for payroll to reconcile and much easier to explain if the termination is challenged.

The termination letter should match what the company is actually doing. It should record the letter date, effective termination date and a clear payment breakdown. Where Section 119 is relied upon, the factual cause cannot be saved for later; it has to be identified at the required time. Even an ordinary dismissal should not use wording that conflicts with the employer's own records or creates a second version of why the employment ended.

The file behind the letter matters just as much. It will typically include the employment contract and amendments, applicable work rules and policies, written warnings, investigation material, attendance or time records, the payment calculation and evidence that documents were delivered. If the employer's disciplinary procedure requires steps to be followed in sequence, the record should show that the sequence was actually followed before the dismissal.

Employers with ten or more employees are required by Section 108 to maintain Thai-language work rules covering matters including discipline, grievances and termination, severance and special severance. Employee records and specified payroll documents generally have to be retained for at least two years. If a statutory complaint, labour dispute or lawsuit has started, the relevant records must be kept until the order or judgment is final.

Correct statutory payments do not make a dismissal immune from an unfair-dismissal claim. Thai Ministry of Labour guidance notes that the Labour Court can order reinstatement or compensation where a dismissal is found unfair. Some employees also sit inside additional protection regimes: dismissal because of pregnancy is prohibited, exercising statutory childbirth and child-care leave rights should not be used as the reason for dismissal, members of an employees' committee can require Labour Court permission before dismissal, and participation in labour demands or union activity can trigger separate protections.

The point at which general guidance stops is the point where the actual documents and status matter. A disputed Section 119 allegation, protected employee, collective labour issue or ambiguous remuneration item should be reviewed under the current Thai rules before the letter is issued. If the employee is foreign, visa and work-permit consequences need their own parallel process rather than being folded into the severance calculation.