Can You Waive Severance Pay in Thailand? Supreme Court Decision 1162/2569 on Exit Releases

Reviewed by Wichuda Atthamethakon, LL.M., Thai Bar Licence 3149/2556, for ThaiLawOnline, a Thai law firm acting for foreigners since 2006.

Edited by Sebastien H. Brousseau, LL.B., B.Sc. Last updated 31 October 2026.
Update log
  • 4 November 2026: Added the statute box with Thai, English and French text and checked the page against the official text

Quick answer. A severance pay waiver in Thailand is void if it is agreed while you are still employed, and it can be fully binding if it is signed after the employment has ended. That is the line the Supreme Court drew in Decision No. 1162/2569 (2026): severance pay and annual leave pay under the Labour Protection Act are protections of public order that an employer and an employee cannot contract out of in advance, but once the employment relationship is over they are ordinary debts, and a receipt-and-release signed freely by an informed former employee is a valid compromise that extinguishes them. This page explains the rule, the case, and what it means before you sign or draft an exit document.

The rule before and after termination

Most guides to Thai employment law, including our own guide to Thai labour law, tell you that statutory severance cannot be waived. That statement is correct as far as it goes, but it hides a distinction that decides real cases. The question is not whether severance can ever be given up. The question is when the waiver was agreed.

When the waiver is signedLegal effectBasis
Before or during employment (in the contract, in work rules, in a side letter)Void. The employee keeps the full statutory entitlement and can still claim it.Labour Protection Act as a law of public order; Civil and Commercial Code section 150
After the employment has ended (a receipt and release, a settlement, a retirement package)Valid if it is a genuine compromise signed with knowledge and free consent. The claims waived are extinguished.Civil and Commercial Code sections 850 and 852; Supreme Court Decision No. 1162/2569

The reasoning is simple once stated. While you are employed, the law protects you from your own employer’s bargaining power: an employer who could make severance a condition of the job would make it disappear from every contract. Once the employment is over, that power is gone. You are two parties with a money dispute, and Thai law lets two parties settle a money dispute by mutual concessions. The settlement is called a compromise, and its effect is to extinguish the claims each side gave up.

The law behind this page

English

Section 118 Labour Protection Act B.E. 2541

Full text

The employer shall pay severance pay to an employee whose employment is terminated, as follows: (1) an employee who has worked continuously for 120 days but less than 1 year shall be paid not less than 30 days' wages at the latest rate, or, for an employee paid by results calculated per unit, not less than the wages for the last 30 days of work; (2) an employee who has worked continuously for 1 year but less than 3 years shall be paid not less than 90 days' wages at the latest rate, or, for an employee paid by results calculated per unit, not less than the wages for the last 90 days of work; (3) an employee who has worked continuously for 3 years but less than 6 years shall be paid not less than 180 days' wages at the latest rate, or, for an employee paid by results calculated per unit, not less than the wages for the last 180 days of work; (4) an employee who has worked continuously for 6 years but less than 10 years shall be paid not less than 240 days' wages at the latest rate, or, for an employee paid by results calculated per unit, not less than the wages for the last 240 days of work; (5) an employee who has worked continuously for 10 years but less than 20 years shall be paid not less than 300 days' wages at the latest rate, or, for an employee paid by results calculated per unit, not less than the wages for the last 300 days of work; (6) an employee who has worked continuously for 20 years or more shall be paid not less than 400 days' wages at the latest rate, or, for an employee paid by results calculated per unit, not less than the wages for the last 400 days of work. Termination of employment under this section means any act by which the employer does not allow the employee to continue working and does not pay wages, whether because the employment contract has ended or for any other reason, and includes the case where the employee does not work and does not receive wages because the employer is unable to continue operating its business. Paragraph one does not apply to an employee employed for a definite period whose employment is terminated in accordance with that period. Employment for a definite period under paragraph three may be made only for employment on a specific project that is not the normal work of the employer's business or trade and that must have a definite start and end, or for work of an occasional nature with a set end or completion, or for seasonal work where the employment is during that season, and the work must be completed within a period not exceeding 2 years, with the employer and the employee having made a written contract from the start of the employment.

ThaiLawOnline translation

Section 150

Any agreement, gift or other juristic act whose object is expressly prohibited by law, impossible, or against public order or good morals has no legal effect from the start.

Full text

An act the object of which is expressly prohibited by law, or is impossible, or is contrary to public order or good morals, is void.

ThaiLawOnline translation

Section 850

Compromise, definition.

Full text

A compromise is a contract by which the two parties settle a dispute, whether the dispute already exists or is yet to arise, by mutual concessions.

ThaiLawOnline translation

Section 852

A compromise extinguishes the claims each party has given up and secures to each party the rights the compromise declares to be theirs.

English translation of this section is being verified. The Thai text is authoritative.

Section 118/1 Labour Protection Act B.E. 2541

Full text

Retirement as agreed between the employer and the employee, or as prescribed by the employer, shall be deemed a termination of employment under section 118, paragraph two. Where no retirement has been agreed or prescribed, or retirement has been agreed or prescribed at an age above sixty years, an employee who has reached the age of sixty years or more shall have the right to declare an intention to retire by declaring such intention to the employer, which shall take effect upon the expiry of thirty days from the date of the declaration, and the employer shall pay severance pay to the retiring employee in accordance with section 118, paragraph one.

ThaiLawOnline translation

Section 67 Labour Protection Act B.E. 2541

Full text

Where the employer terminates employment in a case other than under section 119, the employer shall pay the employee wages for annual holidays in the year of termination in proportion to the annual holidays to which the employee is entitled under section 30. Where the employee terminates the contract or the employer terminates employment, whether or not the termination falls under section 119, the employer shall pay the employee wages for the accumulated annual holidays to which the employee is entitled under section 30.

ThaiLawOnline translation

Section 119 Labour Protection Act B.E. 2541

Full text

The employer is not required to pay severance pay to an employee whose employment is terminated in any of the following cases: (1) dishonesty in the performance of duty, or intentionally committing a criminal offence against the employer; (2) wilfully causing damage to the employer; (3) negligence causing serious damage to the employer; (4) violating work rules, regulations or orders of the employer that are lawful and fair, after the employer has given a written warning, except that in a serious case the employer need not give a warning. A written warning remains effective for not exceeding 1 year from the date of the employee's violation; (5) abandoning duty for 3 consecutive working days, whether or not there is an intervening holiday, without reasonable cause; (6) being sentenced to imprisonment by a final judgment of imprisonment. In the case of (6), if the offence was committed through negligence or is a petty offence, it must be one that caused damage to the employer. Where employment is terminated without severance pay under paragraph one, if the employer did not state the facts constituting the reason for termination in the termination letter, or did not inform the employee of the reason at the time of termination, the employer may not raise that reason afterwards.

ThaiLawOnline translation

ไทย

มาตรา 118 พระราชบัญญัติคุ้มครองแรงงาน พ.ศ. 2541

ข้อความเต็ม

ให้นายจ้างจ่ายค่าชดเชยให้แก่ลูกจ้างซึ่งเลิกจ้างดังต่อไปนี้ (๑) ลูกจ้างซึ่งทำงานติดต่อกันครบหนึ่งร้อยยี่สิบวัน แต่ไม่ครบหนึ่งปี ให้จ่ายไม่น้อยกว่าค่าจ้างอัตราสุดท้ายสามสิบวัน หรือไม่น้อยกว่าค่าจ้างของการทำงานสามสิบวันสุดท้ายสำหรับลูกจ้างซึ่งได้รับค่าจ้างตามผลงานโดยคำนวณเป็นหน่วย (๒) ลูกจ้างซึ่งทำงานติดต่อกันครบหนึ่งปี แต่ไม่ครบสามปี ให้จ่ายไม่น้อยกว่าค่าจ้างอัตราสุดท้ายเก้าสิบวัน หรือไม่น้อยกว่าค่าจ้างของการทำงานเก้าสิบวันสุดท้ายสำหรับลูกจ้างซึ่งได้รับค่าจ้างตามผลงานโดยคำนวณเป็นหน่วย (๓) ลูกจ้างซึ่งทำงานติดต่อกันครบสามปี แต่ไม่ครบหกปี ให้จ่ายไม่น้อยกว่าค่าจ้างอัตราสุดท้ายหนึ่งร้อยแปดสิบวัน หรือไม่น้อยกว่าค่าจ้างของการทำงานหนึ่งร้อยแปดสิบวันสุดท้ายสำหรับลูกจ้างซึ่งได้รับค่าจ้างตามผลงานโดยคำนวณเป็นหน่วย (๔) ลูกจ้างซึ่งทำงานติดต่อกันครบหกปี แต่ไม่ครบสิบปี ให้จ่ายไม่น้อยกว่าค่าจ้างอัตราสุดท้ายสองร้อยสี่สิบวัน หรือไม่น้อยกว่าค่าจ้างของการทำงานสองร้อยสี่สิบวันสุดท้ายสำหรับลูกจ้างซึ่งได้รับค่าจ้างตามผลงานโดยคำนวณเป็นหน่วย (๕) ลูกจ้างซึ่งทำงานติดต่อกันครบสิบปี แต่ไม่ครบยี่สิบปี ให้จ่ายไม่น้อยกว่าค่าจ้างอัตราสุดท้ายสามร้อยวัน หรือไม่น้อยกว่าค่าจ้างของการทำงานสามร้อยวันสุดท้ายสำหรับลูกจ้างซึ่งได้รับค่าจ้างตามผลงานโดยคำนวณเป็นหน่วย (๖) ลูกจ้างซึ่งทำงานติดต่อกันครบยี่สิบปีขึ้นไป ให้จ่ายไม่น้อยกว่าค่าจ้างอัตราสุดท้ายสี่ร้อยวัน หรือไม่น้อยกว่าค่าจ้างของการทำงานสี่ร้อยวันสุดท้ายสำหรับลูกจ้างซึ่งได้รับค่าจ้างตามผลงานโดยคำนวณเป็นหน่วย การเลิกจ้างตามมาตรานี้ หมายความว่า การกระทำใดที่นายจ้างไม่ให้ลูกจ้างทำงานต่อไปและไม่จ่ายค่าจ้างให้ ไม่ว่าจะเป็นเพราะเหตุสิ้นสุดสัญญาจ้างหรือเหตุอื่นใด และหมายความรวมถึงกรณีที่ลูกจ้างไม่ได้ทำงานและไม่ได้รับค่าจ้างเพราะเหตุที่นายจ้างไม่สามารถดำเนินกิจการต่อไป ความในวรรคหนึ่งมิให้ใช้บังคับแก่ลูกจ้างที่มีกำหนดระยะเวลาการจ้างไว้แน่นอนและเลิกจ้างตามกำหนดระยะเวลานั้น การจ้างที่มีกำหนดระยะเวลาตามวรรคสามจะกระทำได้สำหรับการจ้างงานในโครงการเฉพาะที่มิใช่งานปกติของธุรกิจหรือการค้าของนายจ้างซึ่งต้องมีระยะเวลาเริ่มต้นและสิ้นสุดของงานที่แน่นอน หรือในงานอันมีลักษณะเป็นครั้งคราวที่มีกำหนดการสิ้นสุด หรือความสำเร็จของงาน หรือในงานที่เป็นไปตามฤดูกาลและได้จ้างในช่วงเวลาของฤดูกาลนั้น ซึ่งงานนั้นจะต้องแล้วเสร็จภายในเวลาไม่เกินสองปี โดยนายจ้างและลูกจ้างได้ทำสัญญาเป็นหนังสือไว้ตั้งแต่เมื่อเริ่มจ้าง

ตรงตามข้อความในราชกิจจานุเบกษา / สำนักงานคณะกรรมการกฤษฎีกา (Verbatim from the Royal Gazette / Office of the Council of State)

มาตรา 150

ข้อความเต็ม

การใดมีวัตถุประสงค์เป็นการต้องห้ามชัดแจ้งโดยกฎหมาย เป็นการพ้นวิสัย หรือเป็นการขัดต่อความสงบเรียบร้อยหรือศีลธรรมอันดีของประชาชน การนั้นเป็นโมฆะ

ตรงตามข้อความในราชกิจจานุเบกษา / สำนักงานคณะกรรมการกฤษฎีกา (Verbatim from the Royal Gazette / Office of the Council of State)

มาตรา 850

ข้อความเต็ม

อันว่าประนีประนอมยอมความนั้น คือสัญญาซึ่งผู้เป็นคู่สัญญาทั้งสองฝ่ายระงับข้อพิพาทอันใดอันหนึ่งซึ่งมีอยู่หรือจะมีขึ้นนั้นให้เสร็จไปด้วยต่างยอมผ่อนผันให้แก่กัน

ตรงตามข้อความในราชกิจจานุเบกษา / สำนักงานคณะกรรมการกฤษฎีกา (Verbatim from the Royal Gazette / Office of the Council of State)

มาตรา 852

ข้อความเต็ม

ผลของสัญญาประนีประนอมยอมความนั้น ย่อมทำให้การเรียกร้องซึ่งแต่ละฝ่ายได้ยอมสละนั้นระงับสิ้นไป และทำให้แต่ละฝ่ายได้สิทธิตามที่แสดงในสัญญานั้นว่าเป็นของตน

ตรงตามข้อความในราชกิจจานุเบกษา / สำนักงานคณะกรรมการกฤษฎีกา (Verbatim from the Royal Gazette / Office of the Council of State)

มาตรา 118/1 พระราชบัญญัติคุ้มครองแรงงาน พ.ศ. 2541

ข้อความเต็ม

การเกษียณอายุตามที่นายจ้างและลูกจ้างตกลงกันหรือตามที่นายจ้างกำหนดไว้ ให้ถือว่าเป็นการเลิกจ้างตามมาตรา ๑๑๘ วรรคสอง ในกรณีที่มิได้มีการตกลงหรือกำหนดการเกษียณอายุไว้ หรือมีการตกลงหรือกำหนดการเกษียณอายุไว้เกินกว่าหกสิบปี ให้ลูกจ้างที่มีอายุครบหกสิบปีขึ้นไปมีสิทธิแสดงเจตนาเกษียณอายุได้โดยให้แสดงเจตนาต่อนายจ้างและให้มีผลเมื่อครบสามสิบวันนับแต่วันแสดงเจตนา และให้นายจ้างจ่ายค่าชดเชยให้แก่ลูกจ้างที่เกษียณอายุนั้น ตามมาตรา ๑๑๘ วรรคหนึ่ง

ตรงตามข้อความในราชกิจจานุเบกษา / สำนักงานคณะกรรมการกฤษฎีกา (Verbatim from the Royal Gazette / Office of the Council of State)

มาตรา 67 พระราชบัญญัติคุ้มครองแรงงาน พ.ศ. 2541

ข้อความเต็ม

ในกรณีที่นายจ้างเลิกจ้างโดยมิใช่กรณีตามมาตรา ๑๑๙ ให้นายจ้างจ่ายค่าจ้างให้แก่ลูกจ้างสำหรับวันหยุดพักผ่อนประจำปีในปีที่เลิกจ้างตามส่วนของวันหยุดพักผ่อนประจำปีที่ลูกจ้างพึงมีสิทธิได้รับตามมาตรา ๓๐ ในกรณีที่ลูกจ้างเป็นฝ่ายบอกเลิกสัญญาหรือนายจ้างเลิกจ้าง ไม่ว่าการเลิกจ้างนั้นเป็นกรณีตามมาตรา ๑๑๙ หรือไม่ก็ตาม ให้นายจ้างจ่ายค่าจ้างให้แก่ลูกจ้างสำหรับวันหยุดพักผ่อนประจำปีสะสมที่ลูกจ้างพึงมีสิทธิได้รับตามมาตรา ๓๐

ตรงตามข้อความในราชกิจจานุเบกษา / สำนักงานคณะกรรมการกฤษฎีกา (Verbatim from the Royal Gazette / Office of the Council of State)

มาตรา 119 พระราชบัญญัติคุ้มครองแรงงาน พ.ศ. 2541

ข้อความเต็ม

นายจ้างไม่ต้องจ่ายค่าชดเชยให้แก่ลูกจ้างซึ่งเลิกจ้างในกรณีหนึ่งกรณีใด ดังต่อไปนี้ (๑) ทุจริตต่อหน้าที่หรือกระทำความผิดอาญาโดยเจตนาแก่นายจ้าง (๒) จงใจทำให้นายจ้างได้รับความเสียหาย (๓) ประมาทเลินเล่อเป็นเหตุให้นายจ้างได้รับความเสียหายอย่างร้ายแรง (๔) ฝ่าฝืนข้อบังคับเกี่ยวกับการทำงาน ระเบียบ หรือคำสั่งของนายจ้างอันชอบด้วยกฎหมายและเป็นธรรม และนายจ้างได้ตักเตือนเป็นหนังสือแล้ว เว้นแต่กรณีที่ร้ายแรง นายจ้างไม่จำเป็นต้องตักเตือน หนังสือเตือนให้มีผลบังคับได้ไม่เกินหนึ่งปีนับแต่วันที่ลูกจ้างได้กระทำผิด (๕) ละทิ้งหน้าที่เป็นเวลาสามวันทำงานติดต่อกันไม่ว่าจะมีวันหยุดคั่นหรือไม่ก็ตามโดยไม่มีเหตุอันสมควร (๖) ได้รับโทษจำคุกตามคำพิพากษาถึงที่สุดให้จำคุก ในกรณี (๖) ถ้าเป็นความผิดที่ได้กระทำโดยประมาทหรือความผิดลหุโทษต้องเป็นกรณีที่เป็นเหตุให้นายจ้างได้รับความเสียหาย การเลิกจ้างโดยไม่จ่ายค่าชดเชยตามวรรคหนึ่ง ถ้านายจ้างไม่ได้ระบุข้อเท็จจริงอันเป็นเหตุที่เลิกจ้างไว้ในหนังสือบอกเลิกสัญญาจ้างหรือไม่ได้แจ้งเหตุที่เลิกจ้างให้ลูกจ้างทราบในขณะที่เลิกจ้างนายจ้างจะยกเหตุนั้นขึ้นอ้างในภายหลังไม่ได้

ตรงตามข้อความในราชกิจจานุเบกษา / สำนักงานคณะกรรมการกฤษฎีกา (Verbatim from the Royal Gazette / Office of the Council of State)

Français

Article 118 Labour Protection Act B.E. 2541

Indemnité minimale: 30, 90, 180, 240, 300 ou 400 jours de salaire selon l'ancienneté, dès 120 jours; le licenciement inclut toute fin sans salaire, terme du contrat ou arrêt d'activité. Exclus: contrats à terme écrits dès l'embauche, projet hors activité normale, travail occasionnel ou saisonnier, 2 ans maximum.

résumé non officiel

Article 150

Est nul l'acte dont l'objet est expressément interdit par la loi, impossible, ou contraire à l'ordre public ou aux bonnes mœurs.

résumé non officiel

Article 850

La transaction est le contrat par lequel les parties mettent fin à une contestation née ou à naître au moyen de concessions réciproques.

résumé non officiel

Article 852

La transaction éteint les prétentions auxquelles chaque partie a renoncé et confère à chacune les droits que le contrat lui reconnaît.

résumé non officiel

Article 118/1 Labour Protection Act B.E. 2541

Le départ à la retraite convenu entre l'employeur et le salarié, ou fixé par l'employeur, est réputé être un licenciement au sens de l'article 118, alinéa 2. À défaut d'âge de retraite convenu ou fixé, ou s'il est fixé au delà de soixante ans, le salarié âgé de soixante ans ou plus peut déclarer à l'employeur son intention de prendre sa retraite, avec effet trente jours après cette déclaration, et l'employeur lui verse l'indemnité de licenciement prévue à l'article 118, alinéa 1.

résumé non officiel

Article 67 Labour Protection Act B.E. 2541

Si l'employeur licencie hors des cas de l'article 119, il paie au salarié les congés annuels de l'année du licenciement au prorata des droits prévus à l'article 30. Que le contrat soit rompu par le salarié ou par l'employeur, relevant ou non de l'article 119, l'employeur paie les congés annuels cumulés auxquels le salarié a droit selon l'article 30.

résumé non officiel

Article 119 Labour Protection Act B.E. 2541

Aucune indemnité pour malhonnêteté ou infraction intentionnelle envers l'employeur, dommage volontaire, négligence causant un dommage grave, violation de règles licites et justes après avertissement écrit (non requis si grave), abandon injustifié de 3 jours ouvrables consécutifs, ou emprisonnement définitif. Un motif non indiqué au licenciement ne peut être invoqué ensuite.

résumé non officiel

Supreme Court decisions

  • 5457/2560 (2017): Sham Loan Hiding a Business Bought Through Thai Nominee Shareholders: Void, and the Money Irrecoverable
  • 17923/2557 (2014): Lease That Was Really a Sale: Foreign Buyers Cannot Compel Transfer to a Nominee Company

Sources

What the Labour Protection Act gives you

Two entitlements were at stake in the case, and both come from the Labour Protection Act B.E. 2541 (1998), as amended.

  • Severance pay (section 118). An employer that terminates an employee with at least 120 days of service, other than for a serious cause listed in section 119, must pay severance at the employee’s last wage rate: 30 days for 120 days to under one year of service, 90 days for one to under three years, 180 days for three to under six years, 240 days for six to under ten years, 300 days for ten to under twenty years, and 400 days for twenty years or more. Retirement, whether at an age agreed with the employer or set by the employer, is deemed a termination under section 118/1 (added by the Labour Protection Act (No. 6) B.E. 2560), which is why a retiring executive can be owed more than a year of pay.
  • Annual leave pay on termination (section 67). Where the employer terminates other than for a section 119 cause, it must pay wages for the annual holidays of the year of termination in proportion to the entitlement under section 30. Accumulated annual leave carried over from earlier years is a separate item under the second paragraph of section 67: it must be paid on any termination, whether the employee resigns or is dismissed, and even where the dismissal falls under section 119. The leave claim in the case below was for accumulated leave.

The full severance table, notice rules and the section 119 causes are on our Thai labour law page, and employers will find the termination process explained in our employment law guide for employers.

Why an advance waiver is void

The Labour Protection Act is treated by the Thai courts as a law concerning public order (กฎหมายอันเกี่ยวกับความสงบเรียบร้อยของประชาชน). Under section 150 of the Civil and Commercial Code, an act whose object is contrary to public order or good morals is void. In Decision No. 1162/2569 the Supreme Court restated the consequence in one sentence: an employer and an employee cannot agree in advance to exclude the employee from the protection of the Act, and if they do, the agreement is void under section 150.

In practice this catches clauses such as “the employee agrees that no severance shall be payable on termination”, “the signing bonus is paid in lieu of any statutory severance”, or a retirement scheme that describes its payout as “in full satisfaction of all claims” while the employee is still working. None of those wordings survive. An employee who signed them can still sue for the statutory amount, and the Labour Court will award it.

Supreme Court Decision No. 1162/2569: the facts

The plaintiff had worked for the defendant company and its affiliates for more than twenty years and had risen to president, the highest position in the company, with a final salary of USD 12,856 a month. He retired on 31 August 2020 (B.E. 2563). On his last day he signed two receipt documents. The first acknowledged USD 75,574, after tax, for his work in Indonesia for an affiliate of the group up to 31 December 2016, and stated that he would not claim any further money from that company for that work. The second acknowledged 1,274,488 baht, after tax, for his work in Thailand up to 31 August 2020 on his retirement, and stated that he had received full and final payment and would claim nothing further from the employer.

He then sued in the Labour Court for, among other things, severance pay of 6,205,548 baht and accumulated annual leave pay of 1,087,711.40 baht, together with bonus, special compensation and damages. The Labour Court Region 1 dismissed the claim. Both sides appealed, and the Court of Appeal for Specialised Cases (Labour Division) amended the judgment on the two statutory items, ordering the employer to pay 6,170,832 baht in severance and 1,087,711.40 baht in annual leave pay, with interest at 15 per cent a year. The employer appealed to the Supreme Court with leave.

What the Supreme Court decided

The Supreme Court (Labour Division) amended the judgment and dismissed the claims for severance pay and annual leave pay. Its reasoning runs in three steps.

  1. The entitlements are public order protections. Severance pay and annual leave pay are amounts fixed by the Labour Protection Act, a law of public order. An advance agreement excluding the employee from that protection is void under Civil and Commercial Code section 150.
  2. But the employment had ended. The employer terminated the plaintiff by reason of his retirement on 31 August 2020, and the employer and employee relationship under the contract of employment ended that day. What the plaintiff signed afterwards was an agreement to settle an existing dispute by mutual concessions, which is a compromise within the meaning of section 850 of the Civil and Commercial Code.
  3. The compromise binds him. The plaintiff knew the amounts he was entitled to on retirement, agreed to accept the money, and declared that he would make no further claim relating to his employment. The compromise therefore took effect between the parties, and under section 852 the claims he had given up were extinguished. He could no longer claim severance pay or annual leave pay.

The holding, in substance: an employer and employee cannot agree in advance to exclude the employee from protection under the Labour Protection Act, and such an agreement is void under section 150; but once the employment relationship has ended, an agreement by which the former employee accepts payment and declares that he will not claim any further money is a compromise under section 850, and where, as here, the employee knew the amounts due and was free to decide, the waived claims are extinguished under section 852. The Court cited only the three Civil and Commercial Code sections; the Labour Protection Act section numbers on this page are ours.

The factors the Court weighed

The decision is not a licence for every release form. The Court took care to record why this particular signature counted as free and informed consent, and each factor is a warning sign in reverse for a weaker case.

  • Timing. The documents were signed on the retirement date, his last working day, the day the Court held the employment relationship ended, so he could decide freely. In our view a document signed a week before the last day, while the employment continues, is an advance waiver.
  • Position. The plaintiff was the president of the company, its most senior position. The Court found that he could decide independently and was no longer in a position where he had to fear his employer.
  • Knowledge. He knew the amounts he was entitled to on retirement when he signed, and he received substantial sums under the two documents.
  • Expressed intention. The documents stated in terms that he had been paid in full and would claim nothing further. That wording is what turned a receipt into a compromise.
  • Mutual concessions. A compromise under section 850 requires both sides to give something up. The Court characterised the arrangement as each party yielding to the other, which is why it qualified.

In our reading, a Labour Court would look harder at a release signed by a junior employee who was handed a form at the exit interview, was not told what the statutory figure was, and received nothing beyond what the law already required. The two lower courts in this very case reached opposite conclusions on the same documents, which shows how fact sensitive the question is. Anyone relying on a release, on either side, should assume it will be tested against these factors.

If you are the employee: before you sign a full and final release

Foreign executives in Thailand are the group most exposed to this decision. Exit packages for senior expatriates are often negotiated quickly, in English, on the last day, and the documents are drafted by the employer. After Decision No. 1162/2569 a signed release is very hard to undo. Before you sign:

  • Work out your statutory entitlement first: severance under section 118 at your last wage rate, wages in lieu of notice under sections 17 and 17/1 if notice was not given, and annual leave pay under section 67. Compare it with the offer. If the offer is lower and you sign a release, you have given the difference away.
  • Read every receipt. A document headed “receipt” that says you have been paid “in full and final settlement” and “will not claim any further amount” is the compromise wording the Court relied on. It is not a formality.
  • Do not sign anything before your last day of employment that purports to waive statutory amounts. Such a document is void, but relying on that in court is slower and more expensive than declining to sign.
  • If you want to keep a claim open, say so in writing on the document before signing, or sign a receipt that acknowledges the sum received without releasing other claims.
  • Have the document reviewed before signature, not after. A review of an exit package is a short piece of work compared with a Labour Court action to recover severance you have already released.

If you are the employer: drafting an enforceable exit release

For employers, the decision confirms that a negotiated exit can be closed with finality, provided the release is built on the facts the Supreme Court found persuasive rather than on wording alone.

  • Sign after termination, not before. Date the release on or after the day the employment ends. A release attached to the employment contract, the work rules or an early retirement scheme is an advance waiver and void.
  • Itemise the entitlements. Set out the severance calculation, notice pay and leave pay so the employee demonstrably knew the statutory figure. Knowledge of the amount due was central to the Court’s reasoning.
  • Give a real concession. A compromise under section 850 requires mutual concessions. Paying exactly what the law requires and asking for a release in return is weak; an additional payment, an extended benefit or a waiver of the employer’s own claims gives the release its consideration.
  • Record free consent. Allow time to consider the document, offer a Thai and English version where the employee is foreign, and avoid signing under conditions the employee could later describe as pressure.
  • Use compromise language. State that the employee accepts the sums in full and final settlement of all claims arising from the employment and will make no further claim. A bare receipt without a release does not extinguish anything.

Our employment agreement templates and the Employment Pack with its termination letter cover the earlier stages of the relationship. A release should be drafted for the specific exit.

Frequently asked questions

Can an employee waive severance pay in Thailand?

Not in advance. A clause in an employment contract, work rules or any agreement signed while the employment continues that waives statutory severance is void under section 150 of the Civil and Commercial Code, because the Labour Protection Act is a law of public order. After the employment has ended, a former employee can validly settle and release the claim by a compromise agreement (Supreme Court Decision No. 1162/2569).

Is a full and final settlement signed on the last day of work binding?

It can be. In Decision No. 1162/2569 the Supreme Court held that receipt documents signed on the retirement date, stating that the employee had been paid in full and would claim nothing further, were a valid compromise under section 850 that extinguished the severance and annual leave claims under section 852. The employee knew the amounts due, held the most senior position and was not under pressure from the employer.

Does a retirement package replace statutory severance?

Only if the employee agrees to it after the employment has ended, with knowledge of the statutory amount. Retirement is deemed a termination under section 118/1 of the Labour Protection Act, so severance under section 118 is due. A scheme that describes its payout as replacing severance while the employee is still working is an advance waiver and does not bind the employee.

What makes an exit release valid under Thai law?

Three things stood out in Decision No. 1162/2569: the release was signed after the employment had ended, the employee knew the amounts he was entitled to, and he signed freely, not in fear of his employer. The document must also be a genuine compromise, with each side giving something up, and must state that the sums are accepted in full settlement and no further claim will be made.

I already signed a release. Can I still claim severance?

If the release was signed before your employment ended, it is void and you can still claim. If it was signed after termination, you will have to show that it was not a genuine compromise: for example that you did not know the statutory amount, that you were pressured, or that the document was only a receipt without release wording. These are fact questions for the Labour Court, and the outcome in each of the three courts in Decision No. 1162/2569 shows how finely balanced they can be. Have the document reviewed before deciding whether to sue.

Does annual leave pay follow the same rule as severance?

Yes. The Supreme Court applied the same reasoning to wages for annual holidays (the entitlement in section 67 of the Labour Protection Act) as to severance: protected against advance waiver, but capable of being released by a compromise after the employment ends.

Sources and verification

Supreme Court Decision No. 1162/2569, Labour Division, black case no. ร.223/2567, was read in full in the text issued by the Office of Judicial Assistants of the Supreme Court (กองผู้ช่วยผู้พิพากษาศาลฎีกา) as reproduced at deka.in.th; the Supreme Court’s own search database was not reachable on the day this page was written, and the citation will be re-checked against it. The facts, figures and holding above are taken from that text. Sections 150, 850 and 852 of the Civil and Commercial Code are quoted from the Thai text in our own annotated Civil and Commercial Code. Sections 17, 17/1, 30, 67, 118, 118/1 and 119 of the Labour Protection Act B.E. 2541 were read in the Thai consolidated text, including the 400 day tier added by the Labour Protection Act (No. 7) B.E. 2562. The practical guidance for employees and employers is our own commentary and is marked as such.

How ThaiLawOnline can help

ThaiLawOnline has advised foreign employees and employers in Thailand since 2006, entirely by email, phone, video and LINE. We review exit packages and releases before signature, calculate the statutory severance, notice and leave pay you are owed or must pay, and draft compromise agreements that will hold. A consultation is 2,000 THB per hour; see our legal fees or book a consultation. If you have been handed a release to sign, send it to us before you sign it, not after.

Page written 5 September 2026. It describes the law as read on that date; the practical sections are commentary and not a substitute for advice on your own documents.

Last reviewed: 28 September 2026. Read in Thai: Supreme Court Decision No. 1162/2569 in full (black case ร.223/2567, deka.in.th copy), including the disposition; Labour Protection Act ss.17, 17/1, 67, 118, 118/1 and 119 in the consolidated text to Amendment No. 9 (2568). The employee and employer guidance and the reading of the Court’s factors are our commentary; the case has not yet been re-checked against the Supreme Court’s own database.

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About the author

Written and reviewed by Sébastien Brousseau, LL.B., B.Sc., founder of ThaiLawOnline, working in Thai law since 2006 and living in Thailand since 2004. He also writes about life in Thailand at . Connect on LinkedIn or contact the firm.

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