How to Issue a Warning Letter
“Only a valid warning letter will protect the employer from severance pay claims and compensation for unfair termination.”
At some stage, every employer faces a situation where they need to issue a warning letter to one of their employees. Although many employees will understand the message and try to improve their work or behaviour, some may choose to ignore the warning. The employer may then be required to terminate such staff member’s employment. However, only if the preceding warning letter was issued correctly will the employer be able to defend themselves against claims of unfair termination and/or severance pay.
The Thai Labor Protection Act 1998 (the “LPA”) views warning letters as an instrument of disciplinary power. Section 119 of the LPA states that an employer shall not be liable to pay severance where an employee “breaches the work rules or disobeys a legitimate and fair order of the employer, and such employee has been given a warning notice.” However, the LPA remains silent when it comes to important questions like (i) what needs to be expressed in the warning letter, (ii) in what form shall the warning be prepared, and (iii) how to issue and deliver it to the employee.
The Thai Supreme Court, through its case law, has dealt with these and other questions regarding warning letters. A summary of the main points that an employer should consider when issuing a warning is provided below:
1. Who should issue the warning letter?
Where the employer is a legal entity, the warning letter needs to be signed by the legal representative of such entity (i.e. the director of a company limited or the managing partner of a partnership). Limitations concerning the signing authority need to be taken into consideration.
Human resources personnel may only issue a warning letter if empowered to do so by a valid power of attorney from the employer. Such power of attorney should be made in writing, and should be presented to the employee together with the warning letter. If the warning letter was signed by an unauthorized person, the employee may claim that a termination based thereon is unfair. The employer then bears the burden of proof, and may remain liable to pay severance and/or compensation for unfair dismissal.
If possible, therefore, a warning letter should always be signed by the authorized legal representative. Otherwise, a valid power of attorney should be prepared in writing.
2. What should be stated in the Warning?
A proper warning letter should include sufficient details of the employee’s actions that have led to issuance of the same. If possible, the warning letter should contain the following:
(i) place of issuance;(ii) date of issuance (which may be the date of the breach or the date on which the employer found out about the breach);
(iii) name and position of the employee, as well as employee number (if any);
(iv) details of the breach (date, time, place, all actions of the employee that constitute a breach, witnesses, etc.);
(v) reference to provisions of the Work Rules, the individual employment contract or employer’s orders that the employee violated with their actions; and
(vi) a clear warning message stating that repeating such breach will lead to an immediate termination of employment without severance pay (see No. 3 below).
3. Specific Warning Message
The warning letter must include a clear statement concerning the consequences of a repeat violation, which the employee must be able to understand. Warning messages like, “We will take serious action against you if you breach this provision of the Work Rules again”, are too unspecific and would not be recognized by the Labour Court.
An acceptable warning letter might read: “We will terminate your employment agreement with immediate effect and without severance pay if you again breach this provision of the Work Rules.”
4. Delivery of Warning Notice
The employer may decide to personally deliver the warning letter to the employee. In order to be able to prove that the employee received the warning, the employer may have the employee sign an acknowledgment of receipt. Acceptance or acknowledgement is, however, not required for the warning to be effective (as long as the employer can prove that the employee received the warning letter).
Since an employee may refuse to sign an acknowledgement, handing over the warning in the presence of suitable witnesses is recommended. If the employee refuses to accept and read the warning letter, then the employer may simply read it to him/her and make a written record that the employee refused to take and sign the warning letter and hence the employer has read it to him/her. Witnesses should sign the record to certify it.
5. Language, Validity Period, Breaches, etc.
A warning letter is only then deemed to be duly received if the employee is able to understand it. A warning to Thai employees should therefore generally be issued in the Thai language, unless the respective employee (e.g. due to his/her position) has sufficient command of the English language to understand the content of the warning (and this can be proved by the employer).
A warning letter is by law valid for a period of one (1) year only.
In case the employee breached more than one of his/her obligations, then all violations should be stated in the warning. Only if the employee commits the same or a comparably similar breach again, can the employment then be terminated.
In summary, employment matters are a very sensitive issue in Thailand. In order to avoid disputes, warning letters should be drafted as carefully as possible. Seeking consultation from a legal advisor is recommended before taking action.
For more information, contact Mr. Suriya Nachin at: [email protected].