On the day an employee is called in and told “the company is letting you go,” many are so shocked that they sign documents or accept a single lump sum without realising the law entitles them to more. This article sets out clearly what pay you are owed on dismissal, and when you can claim additional “damages for unfair dismissal.”
How many payments can a dismissed employee claim?
If you are dismissed without having committed serious misconduct, you may be entitled to up to three separate payments: (1) severance by length of service under Section 118; (2) payment in lieu of notice where the employer dismisses you suddenly without giving the notice the law requires; and (3) damages for unfair dismissal under Section 49. All three can be claimed together — they are not alternatives.
Severance by length of service (Section 118)
Severance is calculated from your “last wage rate” by length of service. The Labour Protection Act (No. 7) B.E. 2562 (2019) raised the top tier from 300 to 400 days. The current six tiers are:
- 120 days but less than 1 year of service: 30 days of pay
- 1 but less than 3 years: 90 days
- 3 but less than 6 years: 180 days
- 6 but less than 10 years: 240 days
- 10 but less than 20 years: 300 days
- 20 years or more: 400 days
Importantly, retirement also counts as a dismissal for which the employee is entitled to severance at these rates.
When the employer owes no severance (Section 119)
However, Section 119 sets out exceptions where the employer owes no severance — for example, dishonesty in duties or committing an intentional criminal offence against the employer, intentionally causing the employer loss, serious breach of work rules, or absconding from duty for three consecutive working days without good cause. Employers often invoke these grounds to avoid paying, which is exactly where the facts must be examined closely.
”Unfair dismissal” — claiming additional damages (Section 49)
Even where the employer pays severance in full, if the dismissal lacked a sufficient and reasonable cause it can still be an “unfair dismissal” under Section 49 of the Labour Court Act. Supreme Court Judgment No. 7213/2546 established that this section gives the Labour Court discretion to order the employer to take the employee back at the former wage, or — if the two can no longer work together — to fix damages for the employer to pay instead, weighing the employee’s age, length of service, the hardship of being dismissed, and the reason for the dismissal.
What to do if you are dismissed
Before signing anything or accepting any money, secure your evidence — the dismissal letter, payslips, the employment contract, and the work rules — and bring it to a lawyer to calculate your true entitlement. Labour cases can be filed directly with the Labour Court with no court fees, making it an accessible route for employees to claim what they are properly owed.
