How do you terminate an employee in Thailand in 2026?

Thai law splits dismissal into two routes. The first is termination on notice with severance, which needs no proven fault. The second is summary dismissal for serious cause under Section 119 of the Labour Protection Act B.E. 2541 (1998), where no severance is due.

Grounds that remove the severance duty

Section 119 lists the narrow misconduct grounds where an employer can dismiss without severance and without notice. These include dishonesty or a deliberate criminal act against the employer, intentional damage, gross negligence causing serious loss, and a final written warning breached within its validity window. The bar is high. Thai labour courts read these grounds strictly, and the employer carries the burden of proof.

Unfair dismissal exposure

Even where severance is paid, a dismissal can still be challenged as unfair under the Labour Court Act. If the court finds the dismissal lacked a fair and sufficient reason, it can order reinstatement or extra compensation on top of the statutory severance. The amount is set by the court, weighing the employee's age, length of service, and the circumstances of the dismissal.

Protected reasons you cannot dismiss for

Dismissal connected to pregnancy is prohibited under the Labour Protection Act. Dismissal for trade union membership or lawful union activity is barred under the Labour Relations Act. A dismissal that targets one of these protected reasons is unlawful regardless of notice or severance paid.

Section 17 of the Labour Protection Act 1998 ties notice to the pay cycle. You serve written notice on or before a payment date, and the contract ends on the next payment date. For most monthly-paid staff that lands at around 30 days. The law caps required notice at three months even where a longer period is written into the contract.

Payment instead of working the notice

You can release the employee straight away and pay the wages they would have earned across the notice window. This payment is separate from severance. It does not reduce the severance the tenure tiers require.

Notice and severance are two payments, not one

A common error is to treat notice pay as covering the severance duty. It does not. An employee dismissed without cause receives both the notice pay under Section 17 and the tenure-based severance under Section 118. Get the two confused and you underpay.

Section 118 of the Labour Protection Act 1998 sets severance as a fixed number of days of the employee's final wage rate, banded by length of service. There is no minimum-service grace below 120 days and no general monetary cap on the tiers themselves.

Statutory severance by tenure

The 400 days band for 20 years or more was added by the Labour Protection Act (No.7) B.E. 2562, which took effect on 5 May 2019. Before that amendment the top tier stopped at 300 days. Long-serving staff at higher pay grades can therefore carry a large severance liability, so model it before you start a dismissal.

What severance is paid on

Severance is calculated on the final wage rate. For piece-rate or variable pay it draws on the average wage over the last working period. It is due at dismissal, alongside any notice pay and accrued statutory leave that has not been taken.

The 120-day threshold and probation

Thai law does not regulate probation as a separate status. In practice employers set a trial period inside the first 120 days, because an employee dismissed before completing 120 days of continuous service is not yet entitled to statutory severance. Cross that line and the first 30 days tier applies.

1. Confirm the dismissal route

   Decide whether this is a no-fault dismissal on notice with severance, or a summary dismissal for serious cause. The route sets whether severance is owed at all.

2. Check the service line

   Work out completed service to the day. Below the 120-day line no statutory severance applies. Above it, find the tenure tier that fixes the payout.

3. Serve notice or pay it out

   Give written notice on or before a pay date so it ends at the next one. You can release the employee early and pay the notice instead.

4. Calculate every terminal sum

   Add severance, notice pay, and accrued unused leave. Severance is based on the final wage rate and is due at dismissal.

5. Notify the labour inspector if restructuring

   Where the cut follows new machinery or technology, file the advance notice to the employee and the labour inspector. Missing it raises the special-severance exposure.

Thailand has no separate collective-redundancy framework with fixed consultation windows of the kind the UK or France apply. A redundancy is treated as a dismissal without cause, so the standard Section 118 tiers apply in full.

Special severance for restructuring

Sections 121 and 122 of the Labour Protection Act 1998 add two duties when dismissals follow the introduction of new machinery, technology, or work methods that cut headcount. The employer must give advance written notice to the employee and the labour inspector. Where an affected employee has at least six years of service, extra special severance is owed on top of the standard tiers, set per year of service with its own ceiling.

Relocation of the workplace

If you move the workplace and that materially affects an employee's ordinary living, the employee can decline to move and claim special severance under Section 120. The route differs from an ordinary dismissal, so confirm which provision applies before you act.

Mutual termination is recognised in Thailand. The cleanest form is a written agreement signed by both sides that records the end date, the final payment breakdown, and any release of claims the parties accept. Where the employee genuinely agrees to leave or resigns of their own accord, the Section 118 severance duty does not arise.

The risk sits in how the exit is documented. Thai labour courts will look behind a label. If a so-called mutual exit was pressure dressed up as agreement, the court can treat it as a dismissal and award severance and unfair-dismissal compensation. A clear, voluntary agreement protects both sides.

Typical components of a Thailand mutual exit:

• Agreed end date, with the contract closing cleanly on that day
• Final wage and accrued leave, paid up to the last working day
• Any ex gratia amount, where the parties choose to add one above the legal floor
• Release of claims, recording that the employee accepts the settlement in full
• Reference wording, agreed in advance and attached

Final pay timing

The Labour Protection Act does not fix a single statutory deadline in days for paying out every terminal sum on a mutual exit. Severance and wages owed are due at dismissal. In practice Teamed clears the final settlement in the payroll run following the last working day. Get the agreement signed before the last day to avoid a dispute over what was owed.

Real HR and legal experts handle your Thailand hires, from the first contract through every monthly payroll run and statutory deduction. An actual person, not a chatbot or a pooled queue. There is no setup fee and no exit fee, and employer cost passes through at cost, itemised on every invoice.

The split of responsibilities under EOR for Thailand terminations:

Thailand has no fixed collective-consultation clock. The labour-inspector notice for restructuring dismissals is real, though, and skipping it raises the special-severance exposure. Teamed checks that obligation on every redundancy.

EOR, contractors, and entity employees all live on one platform. An employee hired through Teamed's Thailand network can graduate to your own Thai legal presence when headcount makes entity formation the right call, until it isn't. Run the Crossover Calculator to see when the model flips. Start from the Thailand hiring overview.

Key sources: Labour Protection Act B.E. 2541 (1998), Ministry of Labour, and the Social Security Office.