About this series Doing business in Thailand means occasionally encountering situations that would simply never happen in Japan. This series looks at common legal trouble patterns for Japanese SMEs — written as a readable column, not a legal textbook. The goal: that moment of recognition where you think, “We’d better watch out for that.”
It was Monday morning in Bangkok. An email arrived from a staff member who had worked alongside you for five years. “I resigned as of last Friday. Thank you for everything.” — So what do you do next?
”She quit on her own, so no severance, right?”
This is the first thought that crosses most Japanese managers’ minds. In Japan, employees who resign voluntarily typically receive reduced or no severance (under the company’s own rules, not by statute). Carrying that assumption into Thailand can lead to a very different outcome.
Thailand’s Labor Protection Act includes a mandatory Severance Pay system — an obligation that arises when the employer terminates employment. The amount scales with years of service:
| Years of Service | Severance Amount (guideline) |
|---|---|
| 120 days – 1 year | 30 days’ wages |
| 1 – 3 years | 90 days’ wages |
| 3 – 6 years | 180 days’ wages |
| 6 – 10 years | 240 days’ wages |
| 10 – 20 years | 300 days’ wages |
| 20 years or more | 400 days’ wages |
(Based on the 2019 amendment. Please confirm current rates and conditions with a Thai-qualified legal professional.)
This is different in nature from Japanese retirement allowances. It is not a matter of what your work rules say — it is a direct statutory obligation.
The real question: Did she resign, or was she pushed out?
Back to the email from Monday morning. The employee sent it herself — so this is a voluntary resignation, and no severance applies. That much is correct.
But the story doesn’t always end there.
In Thai labor relations, “constructive dismissal” claims — where a worker argues they were effectively forced out — do arise. For example:
- The employee resigned after a unilateral pay cut
- A forced transfer or role change left them with no real place in the company
- Workplace harassment made staying intolerable
In these situations, the worker may claim that what happened was equivalent to employer-initiated termination, and apply to the Labor Court for severance pay. The concept is analogous to Japan’s “resignation under pressure” doctrine — and Thai courts take similar arguments seriously.
Another trap: Immediate dismissal
The reverse situation also comes up. An employee has caused problems, and you want them gone today.
Thailand’s Labor Protection Act generally requires advance notice before termination. Dismissal without notice requires payment of a pay in lieu of notice amount equivalent to the notice period. Add to that severance pay if the dismissal lacks justification — and the total can be substantial.
“We had good reason” may feel obvious to you — but whether that reason meets the standard recognized by the Thai Labor Court is a separate question. The court system is generally protective of workers, and the burden of proving valid cause for dismissal lies with the employer.
”If only we’d known”
The common thread in most severance-related disputes is this: a little advance knowledge would have prevented the problem.
- Know what severance amounts look like for your workforce
- Clearly specify disciplinary and dismissal grounds in your work rules
- Complete the separation process with a signed separation agreement
These are not large-company practices. They are basics that apply to any employer in Thailand, regardless of size.
So you don’t wake up on Monday morning in a cold sweat — next time, we look at an even more serious scenario: what happens when your joint venture partner turns against you.
For questions about employee separation, work rule reviews, or Thai employment law, please feel free to contact us.
This article is for general informational purposes about Thailand’s legal system and does not constitute legal advice under Thai law. For specific matters, please consult a Thai-qualified legal professional. Our firm works in collaboration with JTJB International Lawyers’ Thai-qualified attorneys.