When a Bonus Payment Becomes Mandatory: Labor Law in Thailand
As a general rule, a bonus agreement in a Thai employment contract is a voluntary benefit. However, under certain circumstances it may become mandatory. A clause that would eliminate the bonus in the event of a negative annual result would also be unlawful.
In the business world, employers particularly value those employees who perform productive work and are committed to the company. Many employers therefore offer employees the chance of a bonus in order to motivate them to work hard and commit to the company. Employees are usually paid such a bonus at the end of the year, depending on their performance. The amount of the bonus is at the discretion of the employer.
Yet, a legal dispute often arises when the employer exercises its discretion not to pay a bonus to individual employees or to all employees. The Thai Supreme Court has now delivered a judgment on the bonus in the Thai employment contract.
