Terminating Employment for Poor Work

By Nuanchun Somboonvinij, Tilleke & Gibbins

Most employers know that terminating employees for poor job performance is not easy. However, it is actually legally possible if employers have the right approach and take specific precautionary measures. 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” refers to 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. However, in some cases an employee’s failure to act in accordance with lawful instructions or commands from the employer, resulting in poor work performance, could also be considered a violation of work rules or regulations. This may occur if the work rules or regulations state that employees must strictly comply with the employer’s instructions or commands.

Second, it is indeed possible for an employer to terminate an employee due to poor work performance. For example, this may be possible in the following scenarios:

• Records indicate that an employee’s work performance has fallen below the employer’s required standards, and the employee has made no effort to improve his or her work performance for three consecutive years. Furthermore, there is no evidence of bias on the employer’s part when assessing an employee’s work performance.

• The employee’s job description includes the responsibility of coordinating with employees in other departments, but the employee has been unable to do so. As a result, the employee was reassigned a new job role, but their performance still did not improve. This pattern suggests a significant lack of interpersonal skills and an inability to collaborate with others. The employee’s behavior has had a detrimental impact on the efficiency of the employer’s business operations and has caused significant 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 effectively perform the job 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 to employ this senior manager would disrupt the employer’s chain of command and future business operations. Therefore, the employer 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 several steps an employer should take regarding termination due to poor work performance to reduce the risk of committing an unfair termination:

• The employer should regularly assess the employee’s work performance so that if a problem arises, there are assessments covering multiple years, not only the latest one.

• The assessment of work performance should be conducted by both the employer and the employee, without any bias.

• The employer should identify causes, implement remedies. and establish measures to improve the employee’s work performance (such as setting a performance improvement plan) if it is unsatisfactory.

• It is crucial to give the employee time and opportunity to improve before considering termination of employment. The more time and opportunities 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 evaluating the employee’s abilities, the employer has the right to terminate the employment agreement if the assessment of work performance falls below 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. However, if the employee neither adhered to the employer’s policy nor complied with their orders, the employee can be terminated immediately, and the employer is not required to pay wages in lieu of advance notice.

Keeping these four key factors in mind and seeking expert assistance when complications arise, can help protect employers from costly penalties and unfavorable rulings in the event of legal disputes arising from termination of employment for poor performance. While it is not easy to terminate employees for poor performance, it is entirely possible if employers exercise prudence and adhere to the law.

Nuanchun Somboonvinij is a senior associate in Tilleke & Gibbins’ dispute resolution group, where she handles contentious and non-contentious employment matters as well as other complex litigation cases.