Question:  What are the minimum employment conditions in Thailand?   What law sets forth these minimum employment conditions?

Answer:  Employment in Thailand is defined as the hire of service. While the terms of employment are essentially the creation of a contract, the Labor Protection Act, B.E. 2541 (1998) stipulates certain minimum conditions which cannot be abrogated.

1. Wages: The Ministry of Labor now fixes the minimum daily wage at THB 306.

2. Working Hours: Normal work is limited to 8 hours per day and 48 hours per week. Hazardous work is limited to 7 hours a day, and 42 hours per week. Overtime is limited to 36 hours per week.

3. Social Security: Employers are obligated by law to subtract and remit fixed amounts from their employee’s wages and to make corresponding contributions to a social security fund, after registration for social security. One of the benefits of this system is healthcare.

4. Discrimination: Discrimination on the basis of gender is prohibited by the Constitution. The Labor Protection Act carves an exception for work demanding heavy manual labor such as mining and construction.  Discrimination on the basis of age is permitted only in the interest of preventing child labor; anyone over the age of 15 is eligible for work.

These minimum standards are laid down by a combination of legislation and Ministerial Notifications.

Question:  What are the other laws governing labor relations in Thailand and how do they fit with the Labor Protection Act, B.E. 2541 (1998)?  

Answer:  Ancillary labor legislations include:

1. The Labor Relations Act, B.E. 2518 (1975)
2. The Act Establishing the Labor Court and Labor Court Procedure, B.E. 2522 (1979)
3. The Provident Fund Act, B.E. 2530 (1987)
4. The Social Security Act, B.E. 2533 (1990)
5. The Employment and Job Seeker Protection Act, B.E. 2528 (1985)
6. The Skill Development Promotion Act, B.E. 2545 (2002)
7. The State Enterprise Labor Relations Act, B.E. 2543 (2000)
8. The Workmen’s Compensation Act, B.E. 2537 (1994)
9. The Foreign Employment Act, B.E. 2551 (2008)

As discussed above the Labor Protection Act and the Civil and Commercial Code are the primary legislation relating to labor in general. Specific subjects in labor law are dealt with dedicated legislation promulgated with the object of tackling such specific issues; e.g., Labor Relations, Provident Funds, Social Security and Foreign Employment have their own specific statutes.

Question:  Can an employer transfer its right to receive work from an employee to a third party without the employee’s consent?

Answer:  No.  Employee consent is mandatory.

Question:  Do I need to have work rules and regulations for my business?

Answer: An employer engaging more than 9 (nine) employees must register and conspicuously publish work rules and regulations that must contain the following:

1. Working days, normal working hours and rest period(s)
2. Holidays and rules for availing holidays
3. Overtime rules and corresponding pay
4. Date and place of payment of wages, overtime, holiday work and holiday overtime pay
5. Rules and measures for discipline
6. Complaint and grievance procedures
7. Rules relating to termination of employment, severance pay and special severance pay

Work rules and regulations must at adhere to a minimum standard prescribed by Thai law.

Question:  I understand that Thai law recognizes “Fair” or “Just Cause Termination” as well as “Unfair Termination.”  Can you explain the difference?

Answer:  The distinction between “Fair” or “Just Cause Termination” and “Unfair Termination” is indirectly dealt with under Chapter X1 of the Labor Protection Act pertaining to the subject of Severance Pay. Fair termination of an employee is warranted only by the following transgressions which would in turn negate the requirement of giving compensation per the law in Thailand:

1. Dishonest discharge of duties or commission of an intentional criminal offense against the employer

2. Intentional damage to the employer

3. Gross negligence resulting in serious loss to the employer

4. Violation of work regulations or any legal and just regulations or order of the employer and the written warning has been given by the employer. In the case where there is serious situation, the giving of written warning by the employer is not required. Such written warning shall be valid for not more than one year as from the date the violation has been made

5. Absent from service for three consecutive days, irrespective of whether there is a holiday in-between

6. Having been sentenced by a final judgment of the Court to a term of imprisonment, except for an offense committed through negligence or a petty offense

The above grounds would therefore constitute fair termination.

Likewise unfair termination has not been specifically defined under the act. However, the statute does stipulate certain conditions which would constitute unfair dismissal. An employer cannot terminate an employee under the following circumstances:

1. A pregnant female employee
2. An employee who is on the Employees Committee
3. An employee who has made a claim for change of work conditions where the matter has not been resolved

An employer may be subject to criminal punishments ranging from imprisonment of (1) one to 6 (six) months or a fine of THB 1,000 to THB 100,000 or both. The Labor Protection Act describes the process of termination which entails severance pay and the employee’s entitlement to notice of termination (or wages in lieu of notice).

Question:  What are the legal grounds for unlawful termination?  What are my remedies if I have been unlawfully terminated?

Answer:  The Act clearly stipulates only three circumstances which would constitute grounds for an action against unfair termination:

1. Termination of a pregnant female employee
2. Termination of an employee who is on the Employees Committee
3. Termination an employee who has made a claim for change of work conditions where the matter has not been resolved

Remedies at law include both civil and criminal actions. An employer may be subject to criminal punishments of a fine ranging from THB 1,000 to THB 100,000 and a sentence of imprisonment ranging from 1 (one) month to 6 (six) months. The Labor Protection Act provides for the process of termination which entails severance pay and the employee’s entitlement to notice of termination (or wages in lieu of notice).

The Act Establishing the Labor Court and Labor Court Procedure, B.E. 2522 (1979) elaborates greatly on the power of the Labor Court in such disputes and the remedy available to an aggrieved employee.

1. The Labor Court is empowered to reinstate an employee if it holds the opinion that such a dismissal is not fair to the employee. The Labor Court is also empowered to order the employer to accept the said employee back to work at the wage rate that was current at the time of dismissal.

2. In the event that the Labor Court is of the opinion that the employer and the employee cannot achieve reconciliation, the Labor Court has full discretion to stipulate the amount of damages as compensation to be paid by the employer by taking into consideration the duration of service,  the age of the employee, the loss caused to the employee at the time of dismissal,  grounds for dismissal and the severance the employee is entitled to.

Question:  In general, what are my legal entitlements when I have been terminated from work?  In particular, what are my severance pay entitlements?

Answer:  Unfair Termination from work (see above) gives rise to claim for severance which is calculated in line with the duration of service rendered.  Fair Termination (see above) would not result in severance pay entitlement.

Term of Service

120 days to 1 year
1 year to 3 years
3 years to 6 years
6 years to 10 years
Greater than 10 years

Severance Entitlement

30 days wages
90 days wages
180 days wages
240 days wages
300 days wages

In addition an employee is entitled to notice of termination or wages in lieu thereof.  For example, if an employee is paid on a monthly basis, he or she would typically be entitled to 1 (one) month advance, written notice before termination otherwise he or she would receive one month’s salary in lieu of advance notice.

Question:  How is retirement treated in Thailand?

Answer:  There is no mandatory age for retirement under Thai law for those working in the private sector.  Companies could have a mandatory age of retirement in their employment contracts or their work rules and regulations.  When the employer seeks to retire an employee, he will have to fulfill his severance pay obligations.