Unfair dismissal and restructuring

Keywords: Mazars, Thailand, Legal, Dismissal, Supreme Court

17 February 2022

When terminating employees, employers should inform employees of the necessary and appropriated reason for termination, in order to reduce the risk that the termination will be considered unfair. Employers should also ask terminated employees to sign an agreement waiving their right to claim damages arising from unfair dismissal.

We set below some cases where the Supreme Court found that the dismissal of employees for restructuring purposes was fair:

• The employer made a loss and there were indications that the business situation would not improve. The employer terminated some employees in order to try to continue operating. No particular individuals or groups were singled out for termination, and the positions were not refilled after the terminations. The court ruled that the dismissal of the employees was fair. (Supreme Court Ruling 4753-4760/2003)
• The employer had terminated employees at some point in the past. Later, in order to meet its contractual obligations, the employer hired other people to refill certain positions. Although this would normally be contrary to labour law, the court took into consideration the length of time that had passed between the earlier terminations and the later hiring of other people for those positions. As a result, the court ruled that the dismissal of the previous employees was fair. (Supreme Court Ruling 10659 - 10665/2546)

When an employee files a complaint with the court regarding unfair dismissal, if the court finds in the employee’s favour, it may order the employer to reinstate the employee at the same rate of pay as at the time of dismissal. However, if the court finds that the employer and the employee can no longer work together, the court will order the employer to pay compensation to the employee.