Thai labour law provides that in the event that an employee violates an employer’s work rules, regulations or orders in circumstances where the employer has previously issued a warning letter to the employee in respect of the same violation, the employer may terminate the employee’s employment without severance pay. However, the Courts have on occasion awarded an employee severance pay where a warning letter issued was found not be valid. Some key considerations for employers when issuing a warning letter to the employee are discussed below.
A valid warning letter
When the employee commits an act which is in violation of the employer’s work rules, regulations or orders (assuming they are legal and fair) the employer cannot, except in severe situations, immediately terminate the employee’s employment without severance pay. In such circumstances, the employer must first issue a warning letter to the employee. If, after the issuance of a warning letter, the employee commits the same violation within a year, the employer will be entitled to terminate the employee without severance pay.
Thai labour law does not provide any clear guidance on what constitutes a valid warning letter. On several occasions, the Court has considered that the employee was still entitled to severance pay upon employment termination due to the fact that the warning letter issued by the employer was not valid and enforceable as a warning letter. The key requirements for a valid warning letter are discussed below.
Violation of the employer’s work rules, regulations or orders by the employee
When issuing a warning letter to an employee, employers should ensure that the employee has in fact violated the employer’s work rules, regulations or orders and that such work rules, regulations or orders are legal and fair. A warning letter will be invalid and unenforceable if it is issued in respect of an action that could not be considered as violation of the employer’s work rules, regulations or orders for example, if it is issued based provisions which are contrary to minimum requirements under Thai labour law.
Form and contents of warning
A warning must also be made in writing. There is Supreme Court authority which supports the notion that verbal warnings, regardless of whether they are repeated, do not constitute a valid warning letter. Further, a written record of a verbal warning will not constitute a valid warning letter.
The warning letter should state the facts and details of the violation by the employee and set out how the employee violated the employer’s work rules, regulations or orders. Warnings should also be clear that a subsequent violation will result in a more severe disciplinary action which may include termination of employment.
It will also be important that any warning letter is issued by the employer or a person who has been granted power to do so on behalf of the employer and in accordance with any company certificate and any other applicable rules or regulations.
The employer is required to inform the employee of the warning and it will be important to retain evidence of this. The most straightforward way to do so is to request that an employee sign an acknowledgment. Of course, difficulties can arise where an employee refuses to accept the warning letter and employers may be required to consider other options to demonstrate the employee has received the warning.
Last but not least, after the employee acknowledges a warning letter, if the employee commits the same violation within one year from the date of the first violation, the employer will be entitled to terminate the employee’s employment without severance pay. However, in doing so, the employee must ensure that the employee has committed the same violation. For instance, it will not be viewed as repeated violation if, on the first occasion, the employee did not comply with sick leave regulations, but, on the second occasion, the employee is absent from work.
The above illustrates the importance of an employer taking care when preparing any warning letter which it may later seek to rely on in dismissing an employee without severance pay. A failure to meet these requirements can cause frustration for the business if an invalid warning letter subsequently prevents the employer moving to dismissal for a repeated violation of the employer’s work rules, regulations or orders.
Written by Emi Rowse, Of Counsel; and Chotika Voravongsakul, Junior Associate