According to Thai labor law, the Labor Protection Act B.E 2541 (1998) (the "Act") is a means 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 week, overtime payment, relocation of a 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 them for unfair matters. This is known as the Labor Protection Law.
Thai labor law has various chapters to protect employees from unfair performance or employment contracts of employers. It is the full-time employee and the employee working under a probation period. Thailand deems the terms and conditions under the Act as the law related to people's public order or good morals.
In this article, we will be discussing the following Labor and Employment contract related topics:
Thailand is a great country with a booming business and economic industry, attracting aspiring workers from its neighboring countries and the rest of the world. Thailand is also known for its straightforward procedure and laws pertaining to labor laws. The Thai Labor Protection Act highlights the desired relationship between employers and employees engaged in labor.
It is important to remember that an employment contract does not exist solely for employers but employees. Entering into an employment agreement, the employee and the employer shall abide by the terms and conditions set out in such agreement regarding working hours or special severance pay.
However, if the provision of the agreement is unfair to 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, sick leave, adjustment of salary, and so on; 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 the litigants raise no issues.
Civil and commercial code
About the Civil and Commercial Code of Thailand, Section 575 to Section 587 are determined to define the basic principle of employment. For instance, the definition of the employment agreement is an employment contract whereby a person, called a contractor, agrees to accomplish a definite work for another person, called an employer, who agrees to pay them a salary of the result for the work. The Labor Protection Act and the Civil and Commercial Code also highlight other kinds of leave.
Employment contract for an employer
The main terms relevant to the termination of the employment agreement is that If the employee commits the following:
Thai Labor Law protects employees' rights and is relatively flexible for employers. However, terminations and dismissals are subject to specific rules that are important to avoid any subsequent dispute with the employee or 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 specialising in Thai Labor Law to fully understand your rights and potential claims according to the Thai labor protection act. Juslaws & Consult has created a list of frequently asked questions regarding termination, wrongful dismissal, and labor law in Thailand. However, this shall serve as a guide only.
Q: Does the employee have to be notified of the termination?
Unless the employment contract provides otherwise, the employee must be notified within a minimum period equal to the employee's pay cycle to terminate an employment contract of indefinite duration. 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 inform 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 acknowledgment 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 them of the reason for dismissal. We recommend, however, that the employee be notified of the grounds for their dismissal. This is 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 offense 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 their 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 not to 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 honest or reasonable cause, the employee may take the matter to the Labor Court for unfair dismissal. Therefore, 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. Therefore, the employee should 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 employer has not renewed a permit or visa may submit a claim to the Labor Court and take 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.
The role of Juslaws & Consult
Sophisticated lawyers should manage labor cases in this practice area. We have qualified lawyers who can handle labor law effortlessly and represent 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.
Thai labor law allows an employee to file a complaint against the employer in the Labor Court to obtain severance pay or compensation for wrongful dismissal after dismissal without first filing a complaint with the Labor Inspector. However, Thai law does not precisely define what constitutes "unfair/wrongful dismissal".
If 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 their departure; or, if the court decides that the parties can no longer 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.
Severance pay is calculated as follows:
On average, an action brought before the Labor Court is judged within 3 to 18 months after filing 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. However, if both the employer and employee can settle the dispute amicably, they can still do so even after the case has been brought before the Thai Labor Court.
A company in Thailand with ten or more regular employees must 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 revisions are required. Typically this procedure takes anywhere 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 ten 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:
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. We want to ensure that their rules and regulations comply with the provisions of the Labor Act, and they will also ensure to meet the needs of the company and its employees.
In Thailand, employees are protected by various law provisions, particularly the Labor Protection Act B.E. 2541 and numerous rules issued by the Ministry of Labor and Social Welfare. In addition, some governments 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:
Other benefits such as Overtime payment or commissions depending 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:
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 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 wage payment, 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. In addition, the employer contributes a matching amount, and the government contributes an additional one percent.
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, to name a few. We can also draft employment agreements for all levels of the 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 representing employees in front of the labor board and the labor court.