Supreme Court Decisions

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In this case, the employer terminated the employee's employment contract on 20 January 1999, requiring the employee to stop working from 21 January 1999 onwards. The employee therefore filed a claim seeking wages until the end of January and requested that the severance pay be calculated up to the end of February 1999.The Supreme Court held that an employment contract is a reciprocal contract, under which the employee performs work in exchange for wages. Since the employment contract ended on 20 January 1999, the employer was only obliged to pay wages up to the date of termination. The employee was therefore not entitled to claim wages for the period from 21 to 31 January 1999. However, because the employer terminated the employment without giving prior notice, the employer was required to pay payment in lieu of advance notice, which is separate from wages. Furthermore, the employee's period of service for the purpose of calculating statutory severance pay must be counted only up to the employee's last actual working day. Accordingly, the Central Labour Court and the Supreme Court awarded the employee only statutory severance pay, payment in lieu of advance notice, and wages in respect of accrued annual leave, together with interest.

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The Supreme Court held that B. Co., Ltd. did not undertake the work from the first defendant and perform it independently. Rather, it merely supplied workers to perform work for the company. The plaintiff's work formed part of the first defendant's production process and was carried out at the company's business premises with the company's knowledge and consent. Accordingly, the first defendant was deemed to be the employer under Section 11/1 of the Labour Protection Act.As the employment was terminated, the first defendant was therefore liable to pay statutory severance pay, payment in lieu of advance notice, and outstanding wages in the same manner as a direct employer. The first defendant was also liable to pay interest if the wages were not paid within three days from the date of dismissal.ConclusionThis judgment reaffirms the important principle that employee protection does not depend solely on who pays the wages. It also depends on who benefits from the employee's work and who has the authority to supervise and control that work. Accordingly, where an employee is dismissed, the business operator who is regarded as the employer under the law remains liable for statutory severance pay and other employment-related benefits, even if another person has been engaged to recruit or manage the workers.

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In this case, Myanmar employees were dismissed by their employer after jointly signing and submitting demands for changes to their conditions of employment. They therefore filed complaints with the Labour Relations Committee, alleging that the dismissals constituted unfair acts and requesting reinstatement together with damages.The employees later also filed complaints with the Labour Inspector seeking severance pay and payment in lieu of advance notice, both of which they received in full.The Supreme Court held that the right to severance pay under the Labour Protection Act B.E. 2541 and the right to claim damages for unfair dismissal under the Labour Relations Act B.E. 2518 arise under different statutes and serve different purposes. Exercising a right under one statute therefore does not extinguish the right to seek relief under another statute.Accordingly, even though the employees had already received severance pay and no longer wished to be reinstated, they were still entitled to claim damages for unfair dismissal if they could prove that the employer had acted in violation of the Labour Relations Act.This judgment confirms the important principle that severance pay and damages for unfair dismissal are separate legal entitlements. Receiving severance pay from an employer does not necessarily mean that an employee has waived the right to claim damages arising from an unfair dismissal. Where the dismissal results from conduct that violates the Labour Relations Act, the employee may still be entitled to additional legal remedies.

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In this case, the employer had set the retirement age at 55. However, when the plaintiff reached retirement age, both parties agreed that the plaintiff would continue working, without payment of severance pay and without entering into a new employment contract. The employer later issued a termination notice. The plaintiff claimed additional severance pay, arguing that severance should have been paid from the retirement date.The Supreme Court held that retirement constitutes termination of employment only where the employer does not allow the employee to continue working and no longer pays wages. If the employer and employee agree that the employment will continue, the original employment contract remains in force. This does not constitute termination of employment or the creation of a new employment contract.Accordingly, the employer was not yet required to pay severance on the retirement date. However, when the employment was later terminated, the calculation of severance pay had to take into account the employee’s continuous length of service from the original commencement date of employment until the actual termination date. The employee was therefore entitled to severance based on the entire period of service without interruption.This judgment confirms the important principle that allowing an employee to continue working after retirement does not immediately create an entitlement to severance pay if no termination has occurred. The original employment contract continues in force, and when the employer subsequently terminates the employment, the employee’s entire continuous period of service up to the actual termination date must be counted in calculating severance pay so that the employee receives the full benefits provided by law.

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In this case, the employer dismissed 17 employees on the ground of management necessity because the business unit in which all of the employees worked had continuously operated at a loss for several years and had also been affected by the COVID-19 pandemic.The Supreme Court held that, although the company’s overall business remained profitable, the particular business unit in which the employees worked had accumulated continuing losses. Reducing the number of employees in that unit therefore constituted a reasonable and sufficient ground for dismissal.In addition, before dismissing the employees, the employer had implemented various cost-reduction measures, including suspending new recruitment, reducing overtime work, and reducing staff in other business units first. The employer also established.