Labor & Employment Disputes

Labor and Employment Disputes

Thailand enacts the Labor Protection Act B.E 2541 (1998) (the “Act”) to relieve, resolve and enhance the standard of employment between employees and employers. However, if the provision of the agreement is unfair for the employee in any manner, such as the working time per day or per week, overtime payment, relocation of workplace issue, severance pay, termination clauses, any leaves, adjustment of salary and so on. The labor law in the country where the employee works will preserve him/or her for any unfair matters. This is known as the Labor Protection Law.

There are various chapters to protect employees from unfair performance or employment agreements of employers. It is not only the full-time employee but also the employee working under a probation period. Thailand deems the terms and conditions under the Act as the law related to public order or good morals of people.

In this article, we will be discussing the following Labor and Employment related topics:
‍Thailand is a great country with a booming business and economic industry which attracts aspiring workers from its neighbouring countries and the rest of the world. Thailand is also known for its straightforward procedure and laws pertaining to labor laws.

  • Employment Agreement
  • Termination of Employment
  • Compensation and Severance Pay in Thailand
  • Thai Company Regulations under the Labor Protection Act
  • Employment Privilege and Benefits

Employment Agreement

Entering into an employment agreement, the employee and the employer shall abide by the terms and conditions set out in such agreement. However, if the provision of the agreement is unfair for the employee in any manner, such as the working time per day or per week, overtime payment, relocation of a workplace issue, severance pay, termination clauses, any leaves, adjustment of salary and so on. If any employment term is contrary to the Act, it will be nulled. Furthermore, when the labor case is in the labor court, the Court has the sole right to consider this issue even if there are no issues raised by the litigants.

In reference to the Civil and Commercial Code of Thailand, Section 575 to Section 587 are determined to define the definition and basic principle of employment. For instance, the definition of the employment agreement is a contract whereby a person, called contractor, agrees to accomplish a definite work for another person, called employer, who agrees to pay him a salary of the result of the work.

Furthermore, the main terms relevant to termination of employment agreement is that If the employee commits the following:

  • willfully disobeys; or
  • habitually neglects the lawful instructions of his employer; or
  • absents himself from work, is guilty of gross misconduct, or otherwise acts in a manner incompatible with the due and faithful discharge of his duty, such employee may be dismissed by the employer without notice or compensation.

Termination of Employment

Thai Labor Law protects employees rights and is relatively flexible for employers. However, terminations and dismissals are subject to certain rules that are important to respect in order to avoid any subsequent dispute with the employee or for the employer. Whether you are an employer or an employee, Juslaws & Consult can inform you about your rights regarding termination of employment in Thailand.

We know that every situation is unique, therefore it is essential to seek a consultation with someone who is specialized in Thai Labor Law to fully understand your rights and potential claims. Juslaws & Consult has created a list of frequently asked questions regarding termination, wrongful dismissal and labor law in Thailand. This shall serve as a guide only

Q: Does the employee have to be notified of the termination?
In order to terminate an employment contract of indefinite duration, unless the employment contract provides otherwise, the employee must be notified within a minimum period equal to the employee's pay cycle. For example, if the employee is paid monthly, the notification must be sent to the employee for at least one month before the effective date of termination. If the pay cycle is longer than three months, the period for notifying the employee may be three months.
When the contract is for a fixed term, there is no need to notify the employee before the end of the contract.

Q: How should the employee be notified of the termination?
We recommend sending a registered letter with acknowledgement of receipt (EMS) to keep physical evidence of the date of notification.

Q: Does the employee need to be informed of the reasons for the termination?
If the employee receives severance pay, there is no legal obligation to notify him/her of the reason for dismissal. We recommend, however, that the employee be notified of the reasons for his or her dismissal to protect against any recourse by the employee for wrongful dismissal.
When an employee is terminated without severance pay under Section 119 of the Labor Protection Act ("termination without severance pay"), the reasons for the termination must be carefully detailed in the notice.

Q: Is it possible to dismiss an employee without notice?
Section 119 of the Labor Protection Act sets out the cases of dismissal where the employee does not need to be notified. This is particularly the case when:

- The employee dishonestly performs or intentionally commits a criminal offence against the employer;
-The employee intentionally causes loss to the employer;
-The employee commits an act of negligence resulting in serious loss to the employer;
-The employee’s act violates the work rules, regulations, or orders of the employer that are legal and fair, and receives a written warning notice;
-The employee neglects his/her duties for three consecutive days without a reasonable cause, regardless of whether a holiday is in the intervening period; or,
-The employee is subject to imprisonment by a final court judgment.
We recommend, however, that you notify the employee to protect yourself from future actions.

Q: Is it possible for the employer to force the employee not to report to the workplace after notification and until dismissal (a "garden leave" period)?
This case is not provided for in the Labor Protection Act but the practice is common in Thailand. As long as the employee keeps his status and pay, it is possible to put the employee on "garden leave".
However, be sure to return all personal belongings to the employee before forcing the employee to not return to the workplace.

Q: How many employees can be terminated at the same time?
Thai law sets no legal restrictions on the number of employees that an employer may terminate at the same time. However, if the dismissal is without real or reasonable cause, the employee may take the matter to the Labor Court for unfair dismissal. The employer must ensure that appropriate measures are taken and that the employees are individually terminated.

Q: What happens to a foreign employee’s work permit and business visa (non-immigrant B visa) after termination?
Once an employee is terminated, the employer must cancel the work permit within 15 days. The visa is immediately considered cancelled at the time of dismissal. It is therefore advisable for the employee to apply for a 30-day tourist visa on the day of dismissal to avoid overstay fees.

Q: What happens if the employer does not renew an employee’s visa or work permit?
An employee who has not been terminated by his employer but whose work permit has not been renewed by his employer is no longer entitled to work. However, the employee remains subject to the lawful instructions of his employer to which he shall comply during his working time.
An employee whose work permit or visa has not been renewed by his employer may submit a claim to the Labor Court and bring an action against his employer for wrongful dismissal.

Q: Does the resigning employee receive severance pay?
No, the resigning employee does not receive severance pay.

Q: Is it abusive to dismiss immediately and without compensation an employee who spends too much time on social media?
In a recent judgment, the Supreme Court ruled that it is legal to immediately terminate without compensation an employee who used the office computer to use social media for personal reasons during working hours, negatively impacting the employee's performance.

Q: Is it abusive to dismiss immediately and without compensation an employee who criticizes his employer on social media?
In another recent judgment, the Supreme Court ruled that it is legal to immediately dismiss without compensation an employee who knowingly caused damage to his employer by complaining about his working conditions on social networks.

Q: Are there cases where the employee is protected against dismissal?
Pregnant women cannot be dismissed for pregnancy. Under normal circumstances, members and representatives of the employee's committee may only be dismissed with the approval of the Labor Court.

Apparently, labor cases should be managed by sophisticated lawyers in this practice area. We have qualified lawyers who can handle labor law effortlessly and represent you for your labor case. If anyone wishes to be advised or assisted in handling a case with the Labor Court, please do not hesitate to contact us


Compensation and Severance Pay in Thailand

It is possible for the employee to file a complaint against the employer in the Labor Court in order to obtain severance pay, or compensation for wrongful dismissal after dismissal without first filing a complaint with the Labor Inspector. Thai law does not precisely define what constitutes "unfair / wrongful dismissal".

In the event that the Labor Court upholds the wrongful dismissal charge, it is possible that the Court:

A) Orders the employer to reinstate the employee under the same conditions as before his or her departure; or, if the court decides that the parties are no longer able to work together,
B)Orders the employer to pay the employee compensation for unfair / wrongful dismissal. This amount is calculated by the court and depends entirely on the circumstances of the employee.

Here is how severance pay is calculated.


On average, an action brought before the Labor Court is judged within 3 to 18 months after the filing of the complaint, or even longer for complex cases. The judgments of the Labor Court are subject to appeal to the Supreme Court within 15 days of the judgment. If both the employer and employee can settle the dispute amicably, they can still do so even after the case has been brought before Thai Labor Court.

Thai Company Regulations under the Labor Protection Act

A company in Thailand having 10 or more regular employees is required to establish and display written work rules and regulations that comply with the stipulations of the Labor Protection Act of B.E. 2541 (1998). The company work regulations must also be submitted for approval at the District Office of Labor Protection and Welfare in the area where the company's head office is located.

Officials of the Office of Labor Protection and Welfare in Thailand will review the submitted company work regulations and advise whether any revisions are required. Typically this procedure takes any where from two to four weeks. The approved regulations must be prominently displayed at the place of work within 15 days of the date the company has hired 10 or more employees.

Section 108 of the Labor Act in Thailand stipulates that company work regulations must be written in the Thai language and contain detailed provisions for at least the following:

  • Working days, regular working hours and rest periods
  • Holidays and rules for taking holidays
  • Compensation and Severance Pay in Thailand
  • Rules concerning overtime work and work on holidays
  • Date and place of payment of basic pay, overtime pay, holiday pay and holiday overtime pay
  • Leave and rules for taking leave
  • Discipline and punishment
  • Submission of complaints
  • Termination of employment, severance pay and special severance pay.

Juslaws & Consult has on its staff a group of very experienced employment law experts ready to assist clients in the preparation or review of company work regulations to ensure that their rules and regulations comply with the provisions of the Labor Act and they will also also ensure to meet the needs of the company and its employees.

Employment Privilege and Benefits

In Thailand employees are protected by various law provisions, in particular the Labor Protection Act B.E. 2541 and numerous rules issued by the Ministry of Labor and Social Welfare. Some rules have been further developed by decisions of the Labor Courts which are governed by the Act on Establishment of Labor Courts and Labor Court Procedures B.E. 2522.

Employees in Thailand should have benefits as follows:

  • employees are entitled to maximum working hours,
  • rest periods,
  • work free holidays, 
  • vacation days, 
  • continuation of payment to sick workers and 
  • minimum wages.

Other benefits such as Overtime payment, or commissions depends on the company’s nature of business and scope.
Another benefit that the Employees in Thailand should have is the Social Security Fund. The Social Security Act of B.E. 2533 (1990) in Thailand, and its amendments, established the Social Security Fund with the objective of providing coverage for fund members under certain conditions. 
There are seven types of coverages that are included:

  • Sickness
  • Maternity
  • Disability
  • Child Allowance
  • Unemployment
  • Old Age
  • Death

The stipulations of the Act apply to every company having employees. Persons insured under the provisions of the Fund include all employees from the age of 15 years up through those not over 60 years, in all companies having one or more employees.

A company having one or more employees must register with the Fund within 30 days of hiring their first employee. If the company increases the number of employees, it must submit a new registration form for each new employee, if the employee does not already have a Social Security Card.

Social Security in Thailand is funded by employee contributions made each pay period and contributions made by the employer and also the Thai government. The employer is required to withhold contributions to the Fund from its employees' salaries or wages each pay period. For as long as employees receive their salaries or wages, employers are required to submit the amounts withheld to the Social Security Office within 15 days of the end of the month during which the payroll deductions were made.

The amount an employee contributes to the Fund is 5%, up to a maximum of 750 THB, of their total gross earnings for the pay period. The employer contributes a matching amount and the government contributes an additional one per cent.

Summary

At Juslaws & Consult we help employers to comply with the numerous employment provisions required by the employment law in Thailand, including social security, provident fund and income tax just to name a few. We can also draft employment agreements for all levels of hierarchy. AND we can represent companies in front of the Labor Board or Labor Court.

We also help employees fight for their rights, privileges and benefits at any level. We take great pride in boasting a near perfect record when it comes to representing employees in front of the labor board and in labor court.