Recruitment

One of the intrinsic values of a successful business is its capacity to grow and make a profit. There are many important cogs in the wheel of a successful business but without doubt it is very difficult to have a successful business without having a great team to drive it forward. The careful selection of the best team for the business is one of the trickiest problems that a management team has to face namely having to select employees with the most appropriate and suitable skill sets for their business. Whilst having the perfect CV and making an impression in interviews isn’t a bad way to start, it doesn’t necessarily guarantee that the business and the employee would be best suited for each other. Most employers solve this problem by requiring a probation period before taking the person on for a longer period. In Thailand, the probation period (or Probation Agreement) is not compulsory and therefore it is an agreement entered into between the employer and the employee and it´s terms vary to a certain extent.

The most common misconception which employers have is with respect to their right to terminate the contract during this probation period. It is quite a common belief that it is possible to terminate employment on probation on the spot (or at any time) without any advance notice or severance payment. This belief is actually not quite accurate according to the provisions of law as well as court precedents and can likely get the employer into quite a lot of hot water if the correct procedures haven’t been followed. The two following scenarios make my case in point:

1. If the probation period has started without setting a time or date frame, the employer can terminate the probation agreement at any time but would have to issue a notice of termination to the employee in advance, (before their next payment period), otherwise the employee would be entitled to claim compensation in lieu of advance notice from the employer (Supreme Court Judgment No. 5153/2550). Additionally, if the probation period has lasted for more than 120 days the employee would be entitled to claim a severance payment according to Section 118 of the Labour Protection Act 1998.

2. If the probation period has been set with a fixed time frame involved, upon completion, the contract would have been complied with and the employment could be automatically terminated. It would be possible to terminate the employment prior to that date (if there is a provision for this in the Agreement), and if this did occur, the Probation Agreement would then be considered to have an un-fixed periodicity. If this were to occur, the employee would also have to be notified in advance and would also be entitled to severance payment, as in the first scenario.

If the correct termination procedures are not followed, the possible implications for the business owner or manager could be fines and/or imprisonment. It is always a good idea to make sure that all bases are covered just in case, by seeking advice beforehand from your lawyer when preparing, engaging and terminating the probation agreement.