Unfair Termination in Thailand – Supreme Court Case Studies (Part 1)

Some employers in Thailand misunderstand the law relating to terminating staff and as such they believe that if they pay severance pay to a terminated employee according to section 118 of the Labor Protection Act (B.E. 2541), they can terminate an employee for any reason whatsoever. Such a misunderstanding of Thai law can result in an employer being subject to considerable legal liability given that a terminated employee may be able to submit a claim in the Thai Labour Court seeking compensation from their employer or reinstatement of their employment on the grounds of unfair termination.

There are several issues which need to be examined when determining what constitutes an unfair termination, however in this article we will focus on judgments of the Supreme Court in order to provide guidance on the issue.

To begin with we should focus on the substantive law on the topic of unfair termination which is detailed in section 49 of the Labor Court and Labor Procedure Law Act (B.E. 2522) which provides that:

“With regard to the trial regarding the employer terminates the employment contract. If the Labor Court considers the employee is unfairly terminated, the Labor Court may order the employer to call the employee back to work with the same wage rate as the employee received before terminated. However, if the Labor Court considers the employer and the employee may not work together anymore, the Labor Court may specify the compensation which the employer will have to pay to the employee instead. With regard to the compensation, the Labor Court will consider from the age of the employee, the period of work of the employee, the hardship of the employee if he/she is terminated the employment contract, the cause of termination and the severance pay which the employee is entitled to receive”.

In determining whether an employee has been unfairly terminated, the Thai courts consider the cause of termination and whether the employee was reasonably terminated or whether the employer had a sufficient and justifiable reason to terminate the employment contract.

In relation to what grounds would justify a reasonable termination, we need to consider the practical meaning of the word “reasonable,” The following case studies will provide some guidance on the matter.

Intentionally Causing Harm to the Employer

Case Number 7189/2562

Facts: The Defendant employed the Plaintiff as a trainer of personnel. The Defendant operated a center for training its employees or other company employees to safely work on offshore oil rigs. Thereafter, the Plaintiff became a shareholder and director at another training center. The Plaintiff had sent document L.5 (which related to the Offshore Petroleum Industry Training Organization (OPITO)) from the Defendant’s email system to his personal email address.

Supreme Court Judgment: The Court noted that document L.5 was created for auditing the Defendant’s business operations, which included information on the Defendant’s business which was protected under an agreement between the Defendant and the OPITO. Moreover, the Plaintiff and the Defendant had entered into a confidentiality agreement, whereby the Plaintiff agreed to protect the Defendant’s confidential information and data. The Court noted that this indicated that the Defendant placed importance on protecting and safeguarding information related to its business. Thus, by sending document L.5 to the Plaintiff’s personal email address, the Plaintiff made it easier for such information to be forwarded or taken without the Defendant being able to track it.

The Court held that the Plaintiff’s actions were to be considered as disclosing the Defendant’s confidential business information without permission, thereby intentionally causing harm to the employer. The Court noted that this action by the Plaintiff constituted a disciplinary violation of the Defendant’s work regulations, thus the Defendant had the right to terminate the Plaintiff without paying compensation under Section 119 (2) (4) of the Labor Protection Act of 1998 and without prior notice as per section 583 of the Civil and Commercial Code. Furthermore, the Court ruled that the Plaintiff’s termination was not unfair according to section 49 of the Establishment of Labor Courts and Labor Case Procedure Act of 1979, hence the earlier judgment was reversed and the Plaintiff’s case was dismissed.

Case Number 4589/2561

Facts: The Plaintiff’s job was to supervise the work of employees of the Company’s contractors (outsource) at a communications center. The said group of employees joined with the Plaintiff to make false phone calls among themselves in order to receive additional wages/commission in the amount of 300 baht. After they reached their objectives, these staff stopped answering calls or providing service thereby resulting in customers being unable to call the service center.

Supreme Court Judgment: The Plaintiff and the group of employees confessed to making the false calls in order to receive additional benefits. Thus, the Court held that the Plaintiff’s actions can be considered as malpractice such that Defendant No. 1 suffered damaged. Therefore, the Court determined that Defendant No. 1 was entitled to terminate the Plaintiff without having to pay severance pay, unfair termination compensation, or to provide compensation for notifying the Plaintiff in advance of the termination.

Alleged Employee Misconduct (Lack of Evidence)

Case Number 3399/2561

Facts: The Defendant hired the Plaintiff to work in its sales department. Later, the Defendant terminated the Plaintiff claiming that the Plaintiff drank alcohol at work and prepared a weapon to threaten and to harm co-workers. On the alleged date, the Defendant’s employees filed a complaint regarding the Plaintiff’s behavior as evidence, and on the same day at 8:00 p.m., the Plaintiff reported that she had not behaved as specified in the termination letter. Thereafter at 9:00 p.m., the Plaintiff had her blood tested and such tests found no alcohol or drugs. CCTV cameras were installed at the Defendant’s workplace and normally, recordings from the cameras are kept for approximately 30 days and then deleted, however the tape recording from the date of the alleged incident had already been deleted.

Supreme Court Judgment: The Court held that apart from the co-workers claims, the Defendant had no other evidence to confirm the Plaintiff’s alleged misconduct. Therefore, the Court found that on the day of the alleged incident, the Plaintiff did not drink alcohol in the workplace, or threaten to harm her co-workers. Thus the Court held that the Plaintiff’s termination was unfair.

Employee Violence Outside Work Hours (Serious Misconduct)

Case Number 3577/2561

Facts: The Defendant hired the Plaintiff to work as an employee. Thereafter, the Defendant terminated the Plaintiff because it claimed that the Plaintiff had committed a serious offense when he violently attacked another employee (Ms. A) in the cafeteria area by pulling her hair until she fell backwards, slapping her face twice and using his foot to kick Ms. A’s stomach. According to the medical certificate issued to Ms. A, it showed that she suffered a bruise on her left cheekbone, scalp and chest pain. The Defendant claimed that the Plaintiff’s actions constituted a serious offense according to its work regulations and as such it terminated his employment accordingly. The Plaintiff claimed that his termination was unfair because the incident happened before normal working hours and therefore should not to be considered as a violation of the Defendant’s work regulations.

Supreme Court Judgment: The Supreme Court held that according to the Defendant’s work regulations, the Plaintiff’s actions are still to be considered as disciplinary violations and that such rules don’t provide that they are only limited to working hours.

The Court also determined that even though the Plaintiff’s actions did not cause dangerous physical harm to Ms. A, the Plaintiff’s actions were carried out in the Defendant’s cafeteria area where there were many employees and outsiders. Thus, the Plaintiff’s actions were found to be inappropriate, contrary to the laws of Thailand and a deliberate violation of the Defendant’s rules on discipline. Therefore, despite the fact that the assault of Ms. A occurred before normal working hours, the Court decided that the Plaintiff’s actions constituted a serious offense according to the work regulations thereby entitling the Defendant to terminate the Plaintiff without severance pay, remuneration in lieu of advance notice or damages for unfair dismissal.

Negative Employee Behavior Causing Damage to Employer

Case Number 2361/2559

Facts: The Plaintiff filed a lawsuit claiming that the Defendant terminated them without any misconduct on the Plaintiff’s part. The Defendant responded by claiming that the Plaintiff exhibited behavior that was unfriendly and did not build good relationships with customers and colleagues, that they used emotions at work and could not work well with other colleagues. The Defendant further alleged that the Plaintiff’s poor behavior caused it to relocate the Plaintiff’s workplace to be under various allocation projects every year.

Supreme Court Judgment: The Court held that the Plaintiff’s behavior consistently caused problems with colleagues and inevitably affected the Defendant’s management. Moreover, the Court ruled that the Plaintiff’s frequent issues with customers caused damage to the Defendant. Therefore, the Court ruled that there were sufficient and reasonable grounds for the Defendant to terminate the Plaintiff and that such termination was not to be considered as an unfair dismissal.

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