Thailand: Terminating Employment for Poor Work Performance

Most employers know that terminating employees for poor job performance is not easy. But it is actually legally possible—if employers have the right approach and take specific precautionary measures. However, failing to take these precautions can mean that an employer is either stuck with an incompetent employee or on the losing end of a lawsuit for unfair termination.

This article will lay out some essential considerations for employers in Thailand regarding termination of employment for poor performance.

First, understand that “poor work performance” is a lack of performance or ability, or an inability to work with other employees. It does not constitute a violation of work rules or regulations. In some cases, however, an employee’s failure to act in accordance with lawful instructions or commands of the employer, resulting in poor work performance, could also be considered a violation of work rules or regulations. This may be the case if the work rules or regulations clearly state that an employee must strictly comply with the employer’s instructions or commands.

Second, an employer can, in fact, terminate an employee due to poor work performance. For example, this may be possible in the following scenarios:

• Records show that an employee’s work performance has fallen below the employer’s required standards, and the employee has not tried to improve his or her work performance for three consecutive years. In addition, it does not appear that the employer was biased when giving ratings or scores for the employee’s work performance.
• The job description of the employee includes coordination with employees in other departments, but the employee has not been able to do so. Therefore, the employee was reassigned to a new job function, but the employee still did not improve. This suggests that the employee has a lack of interpersonal skills and is not be able to work well with others. The employee’s behavior has caused inefficiency in the employer’s business operations and damage to the employer.
• An employee in senior management had a duty to strictly work in accordance with the employer’s policy and comply with the employer’s orders—and to perform the job effectively and efficiently in order to set a good example for other employees. However, the employee neither worked in accordance with the employer’s policy nor complied with the employer’s orders. The employee also failed to improve performance even after receiving a notice from the employer requesting improvement. Continuing this senior manager’s employment would have an impact on the employer’s chain of command and future business operations. The employer therefore has the right to protect its interests by terminating the employee according to the relevant section of Thailand’s Civil and Commercial Code.

Third, there are a number of steps an employer should take regarding termination due to poor work performance in order to reduce the risk of committing an unfair termination:

• The employer should make regular actual assessments of the employee’s work performance so that if a problem arises, there are assessments covering several years, not only the latest one.
• The assessment of work performance should be made by both the employer and the employee, and should be made without bias.
• The employer should find causes and remedies and have measures to improve the employee’s work performance (e.g., by setting a performance improvement plan) if it is unsatisfactory.
• The key is to give the employee time and opportunity to improve prior to termination of employment. The more time and opportunity given to the employee, the fairer the termination of employment.
• If the employment agreement specifies that the employee’s work performance will be used as a criterion for measuring the employee’s abilities, the employer has the right to terminate the employment agreement if the assessment of the employee’s work performance is lower than the required standard set by the employer. If the employer then exercises this right as specified in the agreement, it would not be considered unfair termination.

Fourth, if an employer terminates an employee due to poor work performance, the employer is still required to make statutory payments, such as severance pay and wages in lieu of advance notice. Also, if the employee neither worked in accordance with the employer’s policy nor complied with the employer’s orders, the employee can be terminated immediately and the employer is not required to pay wages in lieu of advance notice.

Keeping these four main considerations in mind—and seeking expert assistance if complications arise—can help protect employers from costly penalties and unfavorable rulings in many of the contentious legal disputes that stem from termination of employment for poor performance. While it is not easy to terminate employees for poor performance, it is entirely possible if employers act with prudence and proper regard for the law.

By Tilleke & Gibbins, Thailand, a Transatlantic Law International affiliated firm. 

For further information or for any assistance please contact thailand@transatlanticlaw.com

Disclaimer: Transatlantic Law International Limited is a UK registered limited liability company providing international business and legal solutions through its own resources and the expertise of over 105 affiliated independent law firms in over 95 countries worldwide. This article is for background information only and provided in the context of the applicable law when published and does not constitute legal advice and cannot be relied on as such for any matter. Legal advice may be provided subject to the retention of Transatlantic Law International Limited’s services and its governing terms and conditions of service. Transatlantic Law International Limited, based at 42 Brook Street, London W1K 5DB, United Kingdom, is registered with Companies House, Reg Nr. 361484, with its registered address at 83 Cambridge Street, London SW1V 4PS, United Kingdom.