Sources of Labor Law in Thailand
Labor law in Thailand is governed by a range of statutes, with the Labour Protection Act B.E. 2541 (1998) (LPA) and Sections 575–586 of the Civil and Commercial Code (CCC) serving as the foundation for employment relations. The LPA focuses on working conditions, leave entitlements, termination, and other employment standards, while the CCC covers broader contractual obligations, including service agreements.
Key Labor Laws and Their Scope
- Labour Protection Act (LPA) B.E. 2541 (1998):
Regulates employment standards, including working conditions, wages, overtime, leave entitlements, and termination procedures. - Civil and Commercial Code (CCC):
Governs service contracts, setting obligations for parties when employment agreements are not explicitly covered by the LPA.
Social Security and Welfare Laws
- Provident Fund Act B.E. 2530 (1987):
Supports employee savings and pensions through the management of provident funds. - Social Security Act B.E. 2533 (1990):
Establishes a national insurance system, providing benefits such as healthcare, maternity leave, and pensions. - Workmen’s Compensation Act B.E. 2537 (1994):
Mandates compensation for employees suffering from workplace injuries or occupational illnesses.
Employment Relations and Dispute Resolution
- Labour Relations Act B.E. 2518 (1975):
Governs collective bargaining and labor relations, setting rules for employee representation, strikes, and employer-employee negotiations. - Establishment of Labour Courts Act B.E. 2522 (1979):
Establishes labor courts for resolving disputes between employers and employees.
Specialized Labor Laws
- Royal Decree on Managing the Work of Aliens (B.E. 2560, 2017):
Regulates the employment of foreign nationals and the issuance of work permits. - Home Workers’ Protection Act B.E. 2554 (2011):
Provides labor protections for individuals working from home. - Occupational Safety and Health Act B.E. 2554 (2011):
Ensures safe and healthy working conditions for employees by setting workplace safety standards.
Role of the Ministry of Labor
The Ministry of Labor is responsible for enforcing labor laws, managing social security, and resolving disputes through labor courts. It also regulates work permits, conducts workplace inspections, and ensures compliance with safety standards.
Concept of Employment Contract in Thai Law
In Thailand, employment contracts are governed by both the Labour Protection Act (LPA) and Section 575 of the Civil and Commercial Code (CCC). These laws establish the foundation for defining the nature of the relationship between an employer and employee.
Labour Protection Act (LPA)
Under the LPA, an employment contract refers to any agreement—oral, written, explicit, or implied—where an individual, referred to as the Employee, agrees to work for another individual or entity, called the Employer, in exchange for wages for the duration of the work performed. This broad definition ensures that employment relationships are recognized even in informal settings without formal written agreements.
Section 575 of the Civil and Commercial Code (CCC)
According to Section 575 of the CCC, an employment contract is categorized as a contract for services. In this arrangement, the employee agrees to provide services to the employer, and the employer agrees to pay compensation for those services. This definition emphasizes the transactional nature of the relationship, focusing on the provision of services and corresponding compensation.
Why This Matters
The LPA and CCC definitions cover both formal and informal employment arrangements, offering broad legal protections. Employers and employees alike must understand these definitions to ensure they are complying with labor laws and that all parties are aware of their rights and obligations.
Form of the Employment Contract
While Thai law does not require employment contracts to be in written form, it is highly recommended to document employment agreements in writing. A written contract provides a clear definition of each party’s rights and obligations, reducing the risk of misunderstandings and disputes. In the absence of a written agreement, proving the terms of employment can become difficult, especially in case of litigation.
Language of the Employment Contract in Thailand
There is no legal requirement for employment contracts in Thailand to be drafted in the Thai language. However, the contract’s validity relies on both parties’ understanding of the terms and compliance with Thai law.
- Fluency Requirement: Both the employer and the employee should fully understand the language used in the contract. If either party later claims they did not comprehend the contract’s content, it may lead to legal disputes.
- Use of English: In international business contexts, contracts are often drafted only in English. This is widely accepted in Thailand’s business environment.
- Recommendation for Dual-Language Contracts: For Thai employees, it is recommended to prepare dual-language contracts (English and Thai). This ensures clarity and reduces the potential for disputes. If discrepancies arise between the two versions, the Thai version will usually take precedence in Thai courts.
Content of the Employment Contract
A well-drafted employment contract ensures clarity and legal protection for both the employer and employee. Below are the key elements that should be included in an employment contract in Thailand:
- Personal Details
- Full names and contact information of the employer and employee.
- Address of the workplace and any other relevant locations (e.g., branches or remote work locations).
- Start Date and Duration
- The start date of employment and whether the contract is fixed-term or indefinite.
- For fixed-term contracts, specify the end date or project completion date.
- Probation Period
- Clearly indicate if there is a probation period (commonly up to 119 days) and the terms of performance evaluation during this period.
- Working Conditions
- Specify working hours, break schedules, and the maximum working hours per day and per week, in compliance with Thai labor law (8 hours per day, 48 hours per week).
- Include provisions for overtime if applicable.
- Duties and Responsibilities
- Provide a job title and a detailed description of the employee’s duties and responsibilities to manage expectations.
- Compensation and Payment Terms
- State the monthly or daily wage, payment schedule, and additional compensation (e.g., bonuses, overtime pay, or allowances).
- Mention any performance-based bonuses or commission structures.
- Leave Policies
- Include policies for annual leave, sick leave, maternity/paternity leave, and other types of leave (such as personal or educational leave).
- Specify how leave is accrued and used, along with any notice requirements.
- Confidentiality and Non-Disclosure
- Define confidential information and outline the employee’s obligations to maintain confidentiality during and after employment.
- Intellectual Property Rights
- Clearly state ownership rights for any intellectual property created during employment.
- Specify if the employer retains ownership of the employee’s work products.
- Non-Competition and Non-Solicitation Clauses
- Include restrictions preventing the employee from working for competitors or soliciting clients for a set period after termination.
- Ensure these restrictions are reasonable in scope, duration, and geography to be enforceable under Thai law.
- Termination and Severance Terms
- Outline the conditions for termination, including notice periods and severance pay in accordance with the Labour Protection Act.
- Include the specific procedures required for resignation or dismissal.
- Dispute Resolution
- Define the methods for resolving labor disputes, such as mediation or submission to the Labour Court.
- Include procedures for handling workplace conflicts or grievances.
Workplace Rules and Documentation Requirements in Thailand
Employers with 10 or more employees are legally required to establish written workplace rules to ensure compliance with labor laws and internal consistency. These rules must be easily accessible to employees, either physically at the workplace or through electronic platforms such as a company intranet.
Required Content of Workplace Rules
- Working Hours and Breaks: Define working hours, days, and break schedules.
- Holidays and Leave: Specify public holidays and leave entitlements (e.g., annual, sick, and personal leave).
- Overtime and Holiday Pay: Outline rules and rates for overtime and holiday work.
- Wage Payment Schedule: Indicate payment dates and methods for salaries, overtime, and other compensation.
- Disciplinary Actions: Set procedures for handling violations, including penalties.
- Complaint Handling: Detail processes for submitting and resolving employee complaints.
- Termination and Severance: Define termination conditions and severance obligations.
Record-Keeping Requirements
Employers with 10 or more employees must maintain the following records:
- Employee Register: Includes personal details, start dates, and salaries.
- Wage Records: Tracks working hours, overtime, and payments.
Fixed-Term and Indefinite Employment Contracts in Thailand
In Thailand, employment contracts are classified by duration as either fixed-term or indefinite (open-ended). Each type follows specific legal rules, impacting termination processes and severance obligations.
Fixed-Term Employment Contracts
Fixed-term contracts are designed for specific periods with clear start and end dates and must meet certain conditions:
- Maximum Duration:
Fixed-term contracts cannot exceed two years. - No Probation Period:
Including probation terms may result in the contract being reclassified as indefinite. - Valid Use Cases:
These contracts are suitable for:- Special projects outside routine business operations.
- Temporary work with defined timeframes.
- Seasonal jobs tied to specific periods.
- Restrictions on Early Termination or Renewal:
Fixed-term contracts cannot include clauses for early termination or renewal. If the employee continues working beyond the term without a new contract, it will convert to an indefinite contract. - No Severance Pay Required:
If properly executed, no severance pay is required at the end of a fixed-term contract. Improper structuring may lead to reclassification as indefinite, triggering severance obligations under the Labour Protection Act (LPA).
Indefinite Employment Contracts
Indefinite contracts do not have a fixed end date, allowing employment to continue until terminated by either party. These contracts require compliance with:
- Notice periods as per the LPA.
- Severance payments for terminations without cause, based on the employee’s length of service.
Recommendations for Employers
- Careful Drafting: Ensure fixed-term contracts meet all legal requirements to prevent unintended reclassification.
- Appropriate Use: Use fixed-term contracts only for temporary or project-based work.
- Ongoing Compliance: Indefinite contracts require strict adherence to notice and severance rules to avoid legal risks.
Properly managing the type and structure of employment contracts can minimize liabilities and ensure smooth termination procedures.
Probation Period in Thailand
In Thailand, there are no detailed regulations governing probation periods beyond a key stipulation under the Labour Protection Act (LPA):
“A probationary contract shall also be deemed as an indefinite period contract of employment.”
This means that probationary periods cannot be treated as fixed-term employment. Therefore, an employee on probation is entitled to the same legal protections as any employee under an indefinite contract, including severance pay upon certain conditions.
Key Points on Probation Periods
- Duration Limit:
- Employers typically set probation periods at 119 days or less.
- If the probation extends beyond 120 days, the employee is eligible for severance pay if terminated, as per the LPA.
- Severance Pay Obligation:
- If the employment is terminated within the 119-day probation period, the employer is not required to pay severance.
- If termination occurs on or after the 120th day, severance must be provided according to Section 118 of the LPA.
- No Extension of Probation:
- Extending a probation period beyond 119 days is legally risky. Any such extension may result in the employment being classified as regular indefinite employment, making the employee eligible for severance if terminated.
- Legal Implications:
- Since probationary periods are treated as indefinite employment, employers must follow standard notice and termination procedures to avoid legal disputes.
Recommendations for Employers
- Adhere to 119-Day Limit: Set probation periods within the 119-day threshold to avoid unexpected severance obligations.
- Document Performance Reviews: Use clear performance evaluation processes to ensure objective decisions at the end of probation.
- Timely Decision-Making: If the employee does not meet performance expectations, terminate the employment within the probation period to avoid severance liability.
Working Hours and Holidays in Thailand
Thai labor law regulates working hours and rest periods to protect employees’ well-being and ensure safe working conditions.
Working Hours
- Standard Hours:
- 8 hours per day, 48 hours per week for most jobs.
- For hazardous or dangerous work, the limit is reduced to 7 hours per day and 42 hours per week.
- Workweek Limit:
- The standard workweek should not exceed 6 days.
- Employers are required to inform employees of their work schedule in advance, including designated breaks.
Rest Days
Flexible Days Off:
For businesses with irregular schedules, such as hospitality or tourism, employers may accumulate days off for use within a four-week period.Public Holidays in Thailand
Weekly Day Off:
Every employee is entitled to at least one paid day off per week, usually on Sunday.
Holidays in Thailand
Employees in Thailand are entitled to at least 13 public holidays each year. These holidays may vary slightly across sectors, such as banks and government offices, with additional holidays announced on special occasions.
Core Public Holidays
These holidays are generally observed across most industries:
- New Year’s Day – January 1
- Chinese New Year – January–February (varies annually)
- Makha Bucha Day – February–March (varies annually)
- Chakri Day – April 6
- Songkran Festival – April 13–15 (Thai New Year)
- Labor Day – May 1
- Coronation Day – May 4
- Visakha Bucha Day – May (varies annually)
- Queen Suthida’s Birthday – June 3
- Asarnha Bucha Day – July (varies annually)
- King Vajiralongkorn’s Birthday – July 28
- Mother’s Day (Queen Sirikit’s Birthday) – August 12
- King Bhumibol’s Passing Anniversary – October 13
- Chulalongkorn Day – October 23
- Father’s Day (King Bhumibol’s Birthday) – December 5
- Constitution Day – December 10
- New Year’s Eve – December 31
Additional Holidays by Sector
- Government Offices:
- Royal Ploughing Day – May (varies annually)
- Banks:
- Half-Year Holiday – July 1
Recommendations for Employers
- Paid Leave: Employees are entitled to these public holidays. If work is required on a holiday, alternative leavemust be provided.
- Sector-Specific Holidays: Certain industries (e.g., government and banking) may observe additional holidays.
- Monitoring Government Announcements: Employers should stay updated on temporary holidays declared by the government.
Leave Types in Thailand
Thai labor law ensures employees have access to various types of leave to support personal well-being, family obligations, and professional development. The following is a structured breakdown of annual leave, sick leave, and other key leave categories.
Annual Leave
Employees are entitled to a minimum of six days of paid annual leave after completing one year of service. Employers may offer additional leave or allow for unused days to be carried forward, based on company policy.
Sick Leave
- Employees can take up to 30 days of sick leave per year.
- A medical certificate may be required if the sick leave exceeds three consecutive days.
- Sick leave is separate from other leave types and does not impact annual leave entitlements.
Maternity and Paternity Leave
- Maternity Leave: 98 days, including holidays, with 45 days paid by the employer.
- Paternity Leave: Public-sector employees are granted 15 days of paid paternity leave within 30 days of the child’s birth. In the private sector, paternity leave is not legally required but can be offered voluntarily.
Personal Leave
Employees are entitled to three days of paid personal leave annually. This leave is intended for urgent personal matters and cannot be deducted from annual leave.
Military Service Leave
Employees called for military duties such as inspections or training are entitled to paid leave, up to 60 days per year.
Educational and Training Leave
Unpaid leave may be granted for education or skill development aligned with job requirements or government mandates. Requests must be submitted seven days in advance, and approval is required from the employer.
Termination of Employment
Employment termination in Thailand is regulated primarily by the Labour Protection Act (LPA) and, in some cases, by the Civil and Commercial Code. Below is an overview of key scenarios, requirements, and obligations for termination.
Expiration of the Employment Contract
An employment contract ends automatically when its specified term expires, without requiring prior notice. In such cases, severance pay is not due. However, if the employee continues to work after the contract expires, and the employer does not object, a new indefinite contract under the same terms is assumed. Termination thereafter follows standard rules for indefinite contracts.
Resignation Initiated by the Employee
An employee under an indefinite employment contract may resign by giving written notice on or before the salary payment day, with the resignation taking effect on the next salary payment day.
Notice period: The notice period cannot exceed three months according to the Labor Protection Act. While longer notice periods may be stated in employment contracts, the law does not require notice beyond three months.
Obligations upon resignation: The employer must pay for the actual period worked and compensate for unused leave. Severance pay is not applicable for voluntary resignation.
Termination and Dismissal Initiated by the Employer
Employers may terminate employment through dismissal with cause or termination without cause. Each action requires compliance with notice periods and severance pay obligations.
Dismissal with Cause
Under Section 119 of the LPA, an employer may dismiss an employee without severance pay for the following reasons:
- Dishonesty or Criminal Acts: Committing a crime or acting dishonestly against the employer.
- Intentional Harm: Deliberately causing damage to the employer’s business or property.
- Negligence: Carelessness leading to serious harm to the employer.
- Violation of Work Rules or Orders: Breaching lawful orders or regulations. A written warning is required for minor violations, valid for one year from issuance, but serious misconduct requires no warning.
- Absence Without Justification: Absence from duty for three consecutive working days without valid reason, even if holidays intervene.
- Imprisonment: If sentenced to prison by final court judgment, dismissal applies unless the offense is petty or caused no damage to the employer.
Additionally, Section 583 of the Civil and Commercial Code provides that habitual disobedience, neglect of duties, gross misconduct, or behavior incompatible with faithful service are grounds for dismissal without notice or compensation.
Procedure:
A written notice specifying the cause of dismissal is required at the time of termination. Without this notice, the employer may lose the right to avoid severance pay obligations.
Termination of Employment at the Employer’s Initiative
For indefinite contracts, the employer may terminate the contract by giving written notice on or before the salary payment day, with termination taking effect on the next salary payment day. Alternatively, the employer can terminate immediately by paying wages in lieu of notice.
- Notice Period: Must cover at least one full pay cycle (e.g., 30 days) and is not required to exceed three months. If a longer notice period is specified in the employment contract, the employer must comply with it.
Example:
If wages are paid on the last day of each month, the employer must notify the employee on or before August 31 for the termination to take effect on September 30.
Restructuring or Technological Changes
If employment termination is due to business restructuring or technological changes (e.g., adoption of new machinery), Section 121 of the LPA applies:
- 60-Day Advance Notice: The employer must notify both the Labour Inspector and the employees at least 60 days in advance. This notice must include the termination date, the reason for termination, and a list of affected employees.
- Special Severance Pay: If the employer provides less than 60 days’ notice, they must pay Special Severance Pay equivalent to 60 days’ wages in addition to regular severance under Section 118.
- Fulfillment of Notice Obligations: Payment of Special Severance Pay satisfies the employer’s obligation for advance notice under the Civil and Commercial Code.
Termination by Mutual Agreement
The employment contract may be terminated by mutual agreement between the employer and employee, with terms agreed upon by both parties.
Suspension from Work
If an employee is under investigation for misconduct, the employer may suspend the employee only if the employment contract or collective agreement allows for it.
- Suspension Order: A written suspension order stating the reason and duration (not exceeding 7 days) must be provided to the employee in advance.
- Salary During Suspension: The employer must pay at least 50% of the regular salary during the suspension. If the employee is found innocent, the employer must pay the full salary for the suspension period plus 15% interest per annum.
Severance Pay upon Termination Without Cause
According to Section 118 of the LPA, severance pay is required for employees terminated without cause, based on the length of service:
| Service Years with Employer | Rate of Severance Payment |
|---|---|
| 120 days to 1 year | 30 days’ wage |
| 1 year to 3 years | 90 days’ wage |
| 3 years to 6 years | 180 days’ wage |
| 6 years to 10 years | 240 days’ wage |
| 10 years to 20 years | 300 days’ wage |
| More than 20 years | 400 days’ wage |
Severance pay is not required if the dismissal falls under Section 119 of the LPA (e.g., misconduct).
Calculation of Length of Service:
For severance purposes, holidays, weekends, and leave days granted to the employee are included when calculating the total length of service.
Minimum Wage in Thailand
Minimum Wage for Thai Nationals
In Thailand, the minimum wage varies depending on the region. Starting from January 1, 2024, the daily minimum wage ranges from 330 to 370 baht.
Minimum Wage by Region in Thailand in 2024:
- 370 baht: Phuket
- 363 baht: Bangkok, Nakhon Pathom, Nonthaburi, Pathum Thani, Samut Prakan and Samut Sakhon
- 361 baht: Chonburi and Rayong
- 352 baht: Nakhon Ratchasima
- 351 baht: Samut Songkhram
- 350 baht: Ayutthaya, Saraburi, Chachoengsao, Prachinburi, Khon Kaen and Chiang Mai
- 349 baht: Lopburi
- 348 baht: Suphanburi, Nakhon Nayok and Nong Khai
- 347 baht: Krabi and Trat
- 345 baht: Kanchanaburi, Prachuap Khiri Khan, Surat Thani, Songkhla, Phang Nga, Chanthaburi, Sa Kaeo, Nakhon Phanom, Mukdahan, Sakon Nakhon, Buri Ram, Ubon Ratchathani, Chiang Rai, Tak and Phitsanulok
- 344 baht: Phetchaburi, Chumphon and Surin
- 343 baht: Yasothon, Lamphun and Nakhon Sawan
- 342 baht: Nakhon Si Thammarat, Bueang Kan, Kalasin, Roi Et and Phetchabun
- 341 baht: Chai Nat, Singburi, Phatthalung, Chaiyaphum and Ang Thong
- 340 baht: Ranong, Satun, Loei, Nong Bua Lamphu, Udon Thani, Maha Sarakham, Si Sa Ket, Amnat Charoen, Mae Hong Son, Lampang, Sukhothai, Uttaradit, Kamphaeng Phet, Phichit, Uthai Thani and Ratchaburi
- 338 baht: Trang, Nan, Phayao and Phrae
- 330 baht: Narathiwat, Pattani and Yala
For more detailed information, refer to the Ministry of Labor’s website.
For skilled workers, higher minimum wage rates apply. In 2023, 17 professions were listed as skilled occupations. The wage depends on qualification and experience, is divided into three levels: from 465 to 715 baht per day. For instance, a mechatronics technician can earn between 545 to 715 baht, depending on their level.
Minimum Wage for Foreign Workers
For foreign workers in Thailand, minimum wages are also set and depend on nationality. Below is a table of minimum wages depending on the region of origin:
| Region/Country | Minimum Monthly Wage (in Baht) |
|---|---|
| Western Europe, Australia, Canada, Japan, USA | 50,000 |
| South Korea, Singapore, Taiwan, Hong Kong | 45,000 |
| Eastern Europe, Asia, South and Central America, Mexico, Turkey, Russia, South Africa | 35,000 |
| Africa, Cambodia, Myanmar, Laos, Vietnam | 25,000 |
Non-Compete and Non-Solicitation in Thailand
Thai law does not have specific provisions regarding non-compete and non-solicitation agreements after termination of employment. Nevertheless, such agreements are generally considered valid and enforceable in Thailand if a Thai court deems them reasonable and not contrary to the Unfair Contract Terms Act of 1997. The main requirements for these restrictions are:
- They should not completely prevent an employee from earning a living.
- They should be applied to specific types of activities and/or for a limited period considered fair.
Restrictions may be geographical (prohibiting activity in a certain area) and/or temporal.
When assessing the admissibility of post-termination restrictions, Thai courts are guided by the following criteria:
- Whether the employer has a legitimate right to protect its interests.
- Whether the restriction is against the public interest.
- Whether the terms of the restriction are reasonable.
As an example, Supreme Court Decision No. 1275/2543 recognized a non-compete agreement between an employer and an employee as valid and applicable. According to the agreement, the employee could not work for the employer’s competitors for five years after termination. The court’s decision was based on the fact that the restrictions were set reasonably, both in terms of scope of activities and geographically.
Intellectual Property Rights
The rights to intellectual property (IP) created during employment in Thailand can vary depending on the type of IP and agreements between the employer and employee. Key points regarding rights to different types of IP created during employment in Thailand are:
Copyrights
According to Thai copyright law, rights to works such as drawings, photographs, or software belong to the employee who created them unless otherwise agreed in a written agreement between the employer and employee.
Trademarks
The creation of a trademark or brand by an employee is not regulated by the Trademark Act. Therefore, the employee may be recognized as the owner unless otherwise established by agreement between the employer and employee.
Patents
Under the Thai Patent Act, the right to obtain a patent for an invention or design (industrial model) developed by an employee in the course of their employment belongs to the employer, unless contrary to the terms of the employment contract. This rule applies even if the employment contract does not address issues of invention or design, provided that the invention or design was created using resources or information obtained during employment. In such cases, the employee cannot apply for a patent but has the right to be named as the inventor or creator of the patent and to a special reward if the employer benefits from the invention or design.
Importance of Agreements
It is important to ensure the presence of an agreement between the company and each employee regarding the rights to IP created by employees. Such agreements can be included in the employment contract or as separate contracts.
Confidentiality and Trade Secrets
According to the Trade Secrets Act B.E. 2545 (2002), certain confidentiality criteria must be adhered to by employees. Employers are advised to clearly state in employment contracts what information is considered a trade secret and requires confidentiality, which helps prevent potential disclosure in the future. It is also important for employers to include specific provisions in contracts to ensure the long-term protection of confidential information.
If an employee discloses confidential information, causing damage to the employer and financial losses, the employer has the right to claim damages.
Further Reading
Explore our guide on work permits for foreigners in Thailand for more information on compliance and hiring non-Thai employees.
If you have any questions about labor law in Thailand, please email us or submit your inquiry through the form below. Our team will be happy to assist.