Thailand: Labour and Employment Comparative Guide

Last Updated: 18 September 2019
Article by Wayu Suthisarnsuntorn
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1 Legal framework

1.1 Are there statutory sources of labour and employment law?

The main statutes relating to labour and employment in Thailand are as follows:

  • the Civil Commercial Code;
  • the Labour Protection Act 1998;
  • the Occupational Safety, Health and Environment Act 2011;
  • the Labour Relations Act 1975;
  • the Act on Establishment of the Labour Court and Labour Dispute Procedure 1979;
  • the Social Security Act 1990;
  • the Workmen Compensation Act 1994;
  • the Provident Fund Act 1987;
  • the Skill Development Promotion Act 2002; and
  • the Emergency Decree on Managing the Work of Aliens 2017.

1.2 Is there a contractual system that operates in parallel, or in addition to, the statutory sources?

Written employment contracts are not statutorily required under Thai labour law, except in a few industries such as fisheries. The parties are generally free to include in the employment contract other issues in addition to those covered by the statutes, such as confidentiality, non-competition, non-solicitation and other post-employment obligations. However, the parties cannot contract out basic rights of employees which are protected under the laws.

1.3 Are employment contracts commonly used at all levels? If so, what types of contracts are used and how are they created? Must they be in writing must they include specific information? Are implied clauses allowed?

Thai labour laws generally recognise oral employment contracts. Written employment contracts are commonly used in medium and large organisations, but employees of small businesses usually do not have a written employment contract. Employees in agricultural sectors and rural areas also usually do not have a written employment contract.

It is common practice for employers to create their own employment contract templates. The employer will decide what specific information to include in the contract, but the most important issues – such as the details of the parties, basic salary and job title – are usually included. Implied clauses are allowed.

2 Employment rights and representations

2.1 What, if any, are the rights to parental leave, at either a national or local level?

Female employees have a statutory right to take maternity leave of up to 98 days (inclusive of all holidays in between) per pregnancy.

2.2 How long does it last and what benefits are given during this time?

Up to 98 days (inclusive of all holidays in between) per pregnancy. However, employees who take maternity leave will be paid only 45 days' wages during such leave. In practice, therefore, lower-income employees usually take only 45 days of maternity leave.

2.3 Are trade unions recognised and what rights do they have?

Yes, trade unions are legally recognised and protected under Thai law. They have collective bargaining rights and can arrange strikes in some cases. Apart from trade unions, other types of employee-oriented organisations are also recognised under Thai labour laws, such as employee committees, welfare committees and labour federations, each of which has its own rights, duties and protection under the law.

2.4 How are data protection rules applied in the workforce and how does this affect employees' privacy rights?

In early 2019 Thailand enacted a universal data privacy law which generally applies to everyone in Thailand, including employees. When this new law becomes fully effective in mid-2020, employers will be required to seek the express and informed consent of each employee in connection with the collection, use and/or dissemination of his or her personal data. Also, employers are highly discouraged from collecting sensitive information – such as information relating to religion, race, political views, criminal records or health records – from their employees.

2.5 Are contingent worker arrangements specifically regulated?

No, contingent workers (eg, independent contractors, consultants) are not specifically regulated in Thailand. The relationships between them and their employers are governed by the law of contracts under the Civil and Commercial Code.

3 Employment benefits

3.1 Is there a national minimum wage that must be adhered to?

Yes, there are minimum daily wages in Thailand, but the applicable rates vary from province to province. There are also minimum wages based on profession (mostly skilled technicians who are certified by the Thai government). The minimum wages of these certified technicians are sometimes twice or three times higher than the standard minimum wages.

3.2 Is there an entitlement to payment for overtime?

Yes, generally speaking, employees who are required by their employer to work overtime, to work on their holidays or to work overtime on their holidays will be entitled to additional payments (1.5 times, twice or three times their normal hourly wages, depending on the circumstances). However, employees in certain functions (eg, salespeople) are not entitled to these payments.

3.3 Is there an entitlement to annual leave? If so, what is the minimum that employees are entitled to receive?

Yes, employees who have continuously worked for the same employer for one year will be entitled to a minimum of six days of paid annual leave. Some employees may be entitled to more annual leave, depending on their employment contracts and the work rules of the employer.

3.4 Is there a requirement to provide sick leave? If so, what is the minimum that employees are entitled to receive?

Yes, employees may take as many days of sick leave as needed, as long as they are actually sick; but they are entitled to receive only 30 days' wages during their sick leave per year. Employers may require employees to provide a medical certificate or other proof of sickness upon return to work.

3.5 Is there a statutory retirement age? If so, what is it?

Employees who have reached the age of 60 may at any time exercise their right to retire by giving their employer 30 days' advance notice. A lower retirement age may be stipulated in the work rules of the employer.

Employees who retire at the applicable retirement age are entitled to receive severance pay based on their length of service with the employer (up to 400 days' wages).

4 Discrimination and harassment

4.1 What actions are classified as unlawfully discriminatory?

Different treatments of employees based on race, age, gender, belief or any other attribution which is not relevant to their work will be considered unlawful discrimination.

4.2 Are there specified groups or classifications entitled to protection?

Special rules apply to female employees, pregnant employees and employees who are under 18 years of age. For example, female employees cannot be required to work in mines or to work with explosives, unless such work is not hazardous to the employee. Pregnant employees cannot be required to work onboard a vessel or to carry items weighing more than 50 kilograms. Employees who are under 18 years of age cannot be required to work overtime, to work on holidays or to work with hazardous substances, and so on.

4.3 What protections are employed against discrimination in the workforce?

Employees who are unlawfully discriminated against by their employer may lodge a complaint with the Department of Labour Protection and Welfare or the labour court, seeking compensation and/or other remedies.

A fine penalty is stipulated in the Labour Protection Act for sexual discrimination in the workforce (up to THB 20,000 per instance).

4.4 How is a discrimination claim processed?

Discrimination claims are usually initially processed internally within the employer's organisation. If this internal process fails, employees who have been unlawfully discriminated against may lodge a complaint with the Department of Labour Protection and Welfare or the labour court.

4.5 What remedies are available?

Employees who have been discriminated against may request that the employer be ordered to cease the discriminatory practice and/or financially compensate them, depending on the circumstances.

4.6 What protections and remedies are available against harassment, bullying and retaliation/victimisation?

Like employees who have been unlawfully discriminated against, employees who are subject to harassment, bullying or retaliation/victimisation may lodge a complaint with the Department of Labour Protection and Welfare or the labour court, seeking compensation from the wrongdoers.

A fine penalty is stipulated in the Labour Protection Act for sexual harassment in the workforce (up to THB 20,000 per instance).

5 Dismissals and terminations

5.1 Must a valid reason be given to lawfully terminate an employment contract?

Yes, especially if the employer wants to avoid various statutory termination payments under Thai labour law – in particular, severance pay and unfair termination compensation.

5.2 Is a minimum notice period required?

Yes, a notice period equal to one full payment cycle is normally required (usually one month or more, depending on the circumstances), except in serious cases, where the employer has the right to terminate the employee immediately (eg, where the employee has intentionally committed a crime against the employer).

5.3 What rights do employees have when arguing unfair dismissal?

Employees who are unfairly terminated may ask the labour court to force the employer to reinstate them (with the same wages and responsibilities that they had before the termination) or, more commonly, may seek monetary compensation from the employer (on top of statutory severance pay).

Unfair termination is a vague concept in Thailand and the labour courts have extremely broad discretion to determine whether a termination is unfair on a case-by-case basis. Unfair termination compensation (if granted by the courts) may also be substantial (no legal maximum is stipulated under the law).

5.4 What rights, if any, are there to statutory severance pay?

Employees who are terminated by their employer without ‘legal cause' (as narrowly defined under the law) are entitled to statutory severance pay based on their length of service and their last wage rate. Statutory severance pay rates range from 30 days' wages (for employees who have worked continuously for the same employer for 120 days or more) to 400 days' wages (for employees who have worked continuously for the same employer for 20 years or more).

6 Employment tribunals

6.1 How are employment-related complaints dealt with?

In case of a labour dispute with the employer, an employee may first try to file a complaint with the Department of Labour Protection and Welfare. Usually, Department of Labour Protection and Welfare officials will act as a mediator and try to resolve the dispute amicably. If this fails and if the employer is at fault, these officials also have legal authority to order the employer to rectify the circumstances. If the employer disagrees with the Department of Labour Protection and Welfare's order, it may challenge the order before the labour courts, which are specialised courts with exclusive authority to adjudicate on labour disputes in Thailand.

Alternatively, employees may also bring labour disputes directly before the labour courts.

6.2 What are the procedures and timeframes for employment-related tribunals actions?

The labour courts usually try to convince the parties to settle the case amicably, without witness hearings. A third party may be appointed by the labour courts to mediate in this process.

If the parties fail to settle the case amicably, the labour court will proceed to a full trial with witness hearings and then render a judgment.

A party which is dissatisfied with the labour court's judgment may appeal to the specialised appeal court.

Labour court cases may take several months to several years to reach their final conclusion.

7 Trends and predictions

7.1 How would you describe the current employment landscape and prevailing trends in your jurisdiction? Are any new developments anticipated in the next 12 months, including any proposed legislative reforms?

Employees in Thailand are largely protected under Thai labour laws, which are considered public policies – a minimum standard for employment conditions in Thailand. Where an employment contract offers inferior benefits to an employee, the stronger benefits under Thai law will apply.

The Thai labour courts are generally employee friendly and usually rule in favour of employees.

We do not anticipate upcoming major amendments to the labour law regime in Thailand in the next 12 months, except for a possible increase in the minimum daily wage rates (as a result of campaign promises made by various political parties during the general election which was held earlier this year).

8 Tips and traps

8.1 What are your top tips for navigating the employment regime and what potential sticking points would you highlight?

Employment terminations are not easy for employers in Thailand, because of the substantial statutory payments that may need to be made to terminated employees – especially if the employer is unfamiliar with the required steps, protocols and documentation. In the worst-case scenario, a poorly handled termination may result in the employer being required to pay compensation to the terminated employee equal to as much as 25 months of his or her last wage rate.

The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.

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