Thai Supreme Court Weighs In Company Relocation And Employee Severance Pay

October 1, 2018

It is already common practice for some workers to hire national removals in Thailand if they are looking for better opportunities or a different lifestyle. But what about companies and employers looking for a new home?


Why companies relocate

When the economy is bad or the business isn’t going extremely well, some companies are often faced with a dilemma: continue operating the way they have been operating, or hire national removals in Thailand, to help them relocate as part of their downsizing and reorganizing efforts? If they choose the latter, however, businesses need to make sure that they are aware of their obligations and responsibilities as stipulated under the Labour Protection Act (LPA) in Thailand.


Notifying Employees

If the company is set on relocating, and such move would significantly impact their employees, Section 120 of the LPA states that they need to notify their employees regarding the move at least 30 days before the relocation. This provides their employees ample time to prepare and make their decision regarding their employment. Relocating the place of business means employees may have to travel farther or would have to relocate themselves, and if they are not open for the option, the employee has the right to terminate their employment within the 30 days. Section 118 of the LPA states that employees must also receive a severance pay in such cases.


Statutory Severance

The statutory severance depends on how long the employee has worked for the company. It can range from 30 to 300 days worth of their wages leading up to the termination of the contract.



However, if the relocation would not be too far from the original place of business, company are not required to pay severance to the employees. If the new place of business falls within 50 kilometres from the old location, the Thai Supreme Court rules this as a nearby relocation, and would not materially affect the lives of the employees. However, any distance beyond 50 kilometres would need severance pay for employees who do not wish to continue their employment. Therefore, the distance from the old location to the new one greatly affects the ruling of the court regarding severance pay.