Labor Law in Thailand

Contracts & labor rules

In Thailand, employee rights are well protected by law. The Labor Department monitors compliance and can be called upon by employees for assistance at any time. Each company is required to publish its “Labor Rules”. Working hours, maternity protection and layoffs are strictly regulated.

Sanet drafts those rules and regulations reliably in Thai and English. In addition, we draft and review our clients’ employment contracts complant with Thai Employment Law, and advise on a reasonable balance of interests in the event of any dispute. In this process, we also proactively coordinate with the “Labor Department”.

Labor Laws in Thailand should support harmony and the operational functioning of the company. That is why they are central to our work, while the legitimate interests of the employer are never compromised.

Again, Sanet Legal’s strength is the combination of legal expertise and an entrepreneurial mindset.

We assist with work (NON-B) or Family Related (NON-O) visas and residence visas, visa extensions and visa changes, permanent or temporary work permits, and all issues related to immigration law and labor law in Thailand.

Probationary period in Thailand: That’s what you need to know

Thailand’s labor law does not recognize a “Probation Period”. In the end what´s matters is the pay day. Yet, indrectly the labor law in Thailand foresees a similar regulation: Employees having worked no more than 119 days for a company may be laid-off without a severance payment.

In praxis, employment contracts in Thailand do often include a clause about a “probationary period”. In most cases, the agreement then contains the provision that the employer may terminate the employment at any time “with a one-pay-period’s notice”. Alternatively, immediate termination may also be issued, if the amount due until the contractual end of the employment is paid at the same time.

But note: “One pay-period’s notice” does not mean that the company’s obligation to pay will end on the next payday. Rather, this wording implies a time period of notice. For example, if notice is given on the 5th of a month, the payment obligation may not end until the 31st of the following month.

Therefore, if you wish to agree on a probationary period, you would be wise to agree on salary payment twice a month, half each time, or – especially in the case of contracts with hourly wages – weekly payment during this period. This then means that the payment deadline is only valid until the next but one of the agreed payment dates, i.e., after 14 days at the latest in the case of weekly payment.

Severance pay claims in the event of layoff

Thai labor law has virtually no protection against dismissal for employees. A layoff in Thailand doesn’t have many hurdles. Instead, there are extensive severance regulations that are monitored closely by the labor authorities. Therefore, the termination of an employment contract may become expensive and should be well prepared.

Anyone who has been employed by a company for more than 119 days will already be entitled to 30 days’ wages or salary as his compensation in the event of being laid-off. That amount increases to 90 days severance (3 months’ salary) after one year and 180 days after 6 years of employment. The scale ends at 400 days.

No severance pay is due if the employee resigns by himself or in case of a mutual agreement. The same applies in the event of precisely defined misconduct by the employee and damage to the company. In that case, a prior warning is recommended, yet not mandatory in all cases.

In most cases, therefore, an amicable agreement to terminate the employment relationship will be recommended. This often involves giving the employee a leave until the termination date, with continued payment of the salary.

Many employees shy away from coming to work with their notice in their pocket for reasons of saving face, and therefore use this option.

While at first glance this may appear to be a beneficial work culture practice for the employer, it also has a downside: a disputed termination is often considered “unfair” by the remaining team, even if colleagues had earlier complained about the terminated employee’s poor performance and lack of cooperation.

Timely limitation

Severance pays also become obsolete if the Employment is contractually limited to a maximum of two years and expires on a firmly predefined date. However, diligence is required at this point. Labor courts are likely to declare a temporary contract to be of indefinite duration if certain technical provisions are not complied with. Among others, on Thail Labor Law a limited perios contract needs to define a specific work on a specific project.  

For more information, please contact us at [email protected] or use our contact form.

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