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Navigating Thai Labor Law
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Overview of Thai labor law
In the Land of Smiles, a series of laws and regulations govern a set of employee-employer relationships. These laws cover, among other things, working hours, holiday and leave, sick pay, severance, and overtime.
Unless clearly stated, all laws apply to Thai and foreign employees. Thailand’s Ministry of Labor (MOL) is the primary agency charged with setting and enforcing minimum employment standards.
Some of the most important Thai labor laws are:
- Labor Protection Act B.E. 2541 (1998)
- Labor Protection Act B.E. 2551 (2008)
- Labor Relations Act (No. 2) B.E. 2518 (1975)
- Social Security Act of 1990 as amended in 1999
- Workmen’s Compensation Act of 1994
- State Enterprise Labour Relations Act B.E. 2543 (2000)
- The Labour Court and Labour Court Procedure B.E. 2522 (1979)
- Thai Civil and Commercial Code
- Provident Fund Act B.E. 2530 (1987)
- Alien Employee Act B.E. 2521 (1978)
- Employment and Jobseeker Protection Act B.E. 2528 (1985)
- Royal Decree on Managing the Work of Aliens B.E. 2561 (2018)
As a rule, Thai labor laws favor employees over employers. Therefore, it is imperative to seek professional advice in preparing employment contracts. Correctly drawn-up contracts protect everyone’s rights and avoid costly legal wrangling.
Although Thailand does not require written employment contracts under all circumstances, it is good to provide written agreements. The country imposes strict rules regarding working terms and conditions, and there is always the possibility of misunderstandings, so the best practice is to write things down. Business operators must provide a worker with a copy of a written employment contract immediately after signing.
If your company employs ten or more workers on-site, you are required to post written work rules. These rules—published in both Thai and English for foreign workers—must be filed with the district labor office. They need to include the following information:
- Working hours
- Breaks during the workday
- Holidays, rules for taking them, and working during holidays
- Overtime work
- Timing and venue for basic, overtime, holiday, and holiday overtime payments
- Leave and rules for taking leave
- Discipline and punishment
- Complaints procedure
- Termination of employment
- Severance and special severance pay
If you employ 20 or more people at your workplace, you must provide written agreements about working conditions.
Thai employees are entitled to rest, sick leave, annual leave, and holidays. They are also entitled to receive payment for their work in the form of wages, overtime, holiday, and severance pay. Other entitlements include the right to receive salaries in case of termination and restrictions on suspension from work.
Some of these entitlements, including maternity leave, changed with an amendment to the LPA on April 4, 2019. That amendment also makes clear that employers are prohibited from gender-based wage discrimination.
Payment-related entitlements are subject to so many unique circumstances that this article will not discuss them in detail. However, here is an up-to-date rundown of some of the many entitlements Thai workers enjoy regarding time off:
Maternity and paternity leave
Pregnant employees used to be entitled to 90 days’ leave for each pregnancy. Although the 2019 amendment extended that leave to 98 days, employers are only required to pay 45 days.
Fathers, however, are out of luck. Outside of government service, there are no requirements to provide paid paternity leave.
Sick leave is on an as-needed basis, and employers must pay for up to 30 days of leave. After three days, employers have the right to request a medical certificate.
Although there are special provisions for hospitality workers, in general, employees celebrate with 13 paid public holidays. Since Songkran, the traditional Thai New Year celebrated in mid-April, calls for three days of paid vacation, employees receive 15 days of paid holidays per year.
Other types of leave
Employees who have worked for you for a year without interruption are entitled to at least six working days of personal annual leave. In practice, employers provide professional employees with 10-15 days of paid annual leave.
You must also allow workers up to three paid working days’ leave for “necessary business.” The LPA also mandates many other types of leave, such as sterilization and military training and service.
You’ll have to pay severance depending on how long the employee has worked and follow strict guidelines for firing workers. Still, there are provisions under which employers can terminate employees without repercussions.
If employees willfully disobey or habitually neglect their bosses’ lawful demands, are guilty of gross misconduct, or fail to report for duty for three or more days without a valid excuse, employers can dismiss them without notice or compensation. Other conditions that allow employers to terminate workers without notice, payment, or severance include dishonest discharge of duty, violating work regulations, intentionally causing damage to the employer, and being sentenced to prison by a final court judgment. However, if the offense was minor, it must have caused damage to the employer.
Outside of those particular circumstances, if a company wants to terminate an employee, it must notify the employee of the date of termination of employment, and the reasons for the termination, at least 60 days in advance. Employers who fail to provide 60 days’ notice must pay a special severance rate known as a payment in lieu of notice. Thailand stipulates that payment in lieu of notice should equal 60 days of pay at the most recent rate of basic pay. For employees who are paid based upon output, the 60 days’ compensation is based on the preceding 60 days.
Payment in Lieu
Payment in lieu of notice drops down to 30 days’ pay when companies relocate, and workers do not move with them to the new location. In Thailand, payment in lieu of notice, and severance pay in general, is also affected by the length of service.
Probationary periods not to exceed 119 days are permissible under Thai law. After 120 days, workers are entitled to severance payments. To avoid this, many employers set their probationary periods at 119 days.
Although Thailand strives to be friendly to business, it has a maze of ever-evolving labor laws that can be difficult to keep up with. Let Aster Lion, a renowned Thailand Employer of Record (Thailand EOR), give you peace of mind through helping you keep abreast of Thai labor laws and tending to all of your HR matters.
Are you looking to make your first hire in Thailand? Here is an article on 5 things you should know about hiring people in Thailand
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