It’s true that standard employment contracts, or contracts without a fixed end date, often feel more secure than fixed-term contracts. However, in today’s era, working under a contract can make decision-making easier because it offers greater flexibility. There are no long-term obligations, and if the job isn’t the right fit, you can leave without being tied down.
What Are the Benefits of a Fixed-Term Contract?
A contract is an employment agreement that clearly defines the end date of employment, such as 3 months, 6 months, 1 year, 2 years, or until a project is completed. These types of contracts are common in both private and public organizations. Although contract employees may not receive the same benefits as permanent staff, they often enjoy more freedom, have fewer obligations, and may have a lighter workload compared to permanent employees. Importantly, at the end of the contract, both the employee and employer can decide whether to continue or part ways.
For employers, fixed-term contracts are advantageous because they can hire specialists with specific skills needed for a project. They also allow companies to adjust team size as required, reduce expenses since they are not obligated to provide full benefits like permanent staff, and, when evaluating performance, have the flexibility to decide whether to extend or end the contract without violating labor laws.
Being a Contract Employee Can Be Beneficial
For contract employees, one major advantage is the ability to plan their future clearly at the end of the contract. If performance is good, there may be opportunities to extend the contract. At that point, employees can decide whether to stay or leave. Therefore, being a contract worker does not necessarily mean insecurity; ultimately, the choice is yours.
Moreover, contract work is particularly suitable for specialists, who often receive higher compensation and have faster career growth opportunities. You can continue in your field of expertise without hesitation or the need to remain in the same organization for many years.
Can a Contract Employee Resign Before the End of the Contract?
If a contract employee realizes the job isn’t the right fit, or receives a better offer before the contract ends, can they resign early? The answer is yes. Employees may resign early if the contract specifies that either party can terminate the agreement with at least 30 days’ notice. If the contract does not allow early termination, resigning early is still possible, but the employer may file a claim for damages because the company would need to find a replacement.
However, if the contract includes a penalty for early termination, according to Supreme Court Judgment 7620/2559, courts have the discretion to reduce excessive penalties. For example, if an employee earns 20,000 THB per month but is asked to pay 50,000 THB for early resignation, the court may lower the amount.
End of Contract: Is Severance Pay Required?
Employees are not entitled to severance pay at the end of a contract in the following three cases:
- Project-specific work that is not part of the employer’s regular business operations, such as research or study projects.
- Temporary work with a clearly defined end date or upon completion of a specific task, such as construction or carpentry work.
- Seasonal work hired only for a specific season and completed within 2 years, with a written contract from the start of employment.
Therefore, if an employee works in the company’s regular operations under a 1- or 2-year contract, and the employer decides not to renew the contract, it is considered termination. The employee is entitled to severance pay under Section 118 of the Thai Labor Protection Act B.E. 2541. In cases of termination before the contract ends, the employer must provide compensation equal to 1 month (30 days) from the date of termination.
ที่มา : legalclinic, คลีนิคกฏหมายแรงงาน และ Libray legal
