Introduction: Thai Employment Laws

Chalermchai Intarasupa | 14 June 2011

1. Summary of Regulatory Framework

Employment law issues in Thailand are governed by the CCC, the Notification of the Ministry of Interior re Labor Protection dated April 16, B.E. 2515 (1972), the Labor Protection Law (the “LPL”) or the Labor Relations Act (the “LRA”), the Alien Work Permit Act (the “AWPA”), the Social Security Act (the “SSA”), the Compensation Act (the “CA”) and the Provident Fund Act (the “PFA”).

Each of these legislative enactments governs separate areas of employment law.  The CCC governs basic employment contract formation and termination. The LPL stipulates the minimum standards for employment related matters such as working hours, wages and holidays.  The LRA specifies standards for conditions of employment, including establishment of labor unions and procedures for handling employee disputes. The AWPA specifies requirements that must be met in respect of employment for non-Thai nationals. Finally, the SSA, CA and PFA establish the framework and set the standards for employee pension and related funds, including workers’ compensation.

Because employment laws are considered to be laws relating to public order, the parties cannot contract out of the provisions of the LPL, LRA, AWPA, SSA, or the employment-law sections of the CCC. See Supreme Court of Thailand, Decision Nos. 1401/2527; 2471/2527; 1663-4/2529.

2. Formation of Employment Contracts

Employment contracts may be either written or oral. See Supreme Court of Thailand, Decision Nos. 2652/2529; 2653/2529. An employment contract is formed when each party expresses a common intention with the other party to enter into an arrangement whereby one party provides services to the other in exchange for compensation. See CCC § 575. Employment contracts may be either for a set duration or terminable at will by either party. See CCC § 581 & 582. Contracts for which no duration is specified may be terminated by either party giving notice of at least one pay period to the other party. See CCC § 582. If no pay period was specified in the employment contract, the pay period will be deemed to be in accordance with customary practice in the industry. See CCC § 580. In most cases, employees are paid monthly in arrears. In addition, any employment contract may be terminated by the employer without notice or payment of compensation where the employee “wilfully disobeys or habitually neglects the lawful commands of his employer, absents himself from service, is guilty of gross misconduct, or otherwise acts in a manner incompatible with the due and faithful discharge of his duty ….” See CCC § 583.

3. Work Regulations

An employer with ten (10) or more employees must establish work regulations in the Thai language which cover the following:

  1. (1) Working days, regular working hours and rest period;
  2. (2) Holidays and rules for taking holidays;
  3. (3) Rules concerning overtime work and holidays work;
  4. (4) Date and place for payment of wages, overtime and holiday pay;
  5. (5) Leave and rules for taking leave;
  6. (6) Discipline and disciplinary actions;
  7. (7) Submission of grievances;
  8. (8) Termination of employment.

The employer must submit a copy of these work regulations to the Labor Ministry within seven (7) days from the date of having employed the tenth employee. The regulations must be posted at the place of work.