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Thai Labour Law

The principal Thai labor law is the Thai Labor Protection Act of 1998. The Labor
Protection Act establishes the minimum rights of employees working in Thailand,
covering working hours, overtime, holidays, sick leave, maternity leave, severance
and other basic employee rights.
The Department of Labor Protection and Welfare under the Ministry of Labor and
Social Welfare is charged with administration of these rights. The Department and
Ministry issue regulations clarifying and sometimes modifying the rights under the
Labor Protection Act.
The following summary of some of the more important provisions of the Labor
Protection Act is provided for an employer's general background. An employer should
confirm through independent legal counsel that it is in compliance with all applicable
labor laws and regulations.
Scope
The Thai Labor Protection Act of 1998 applies to all "employers" employing
"employees" in Thailand. Under the act, "employer" is defined broadly and can
include persons who do not have a direct employer-employee relationship in the
traditional sense. Notably, "employer" includes persons designated to act on behalf of
an employer, authorized directors of an employer and some firms that provide
management services within the scope of the employer's responsibility.
Such persons or firms might share the actual employer's liability for compliance under
the Labor Protection Act. Additionally, a special provision under the law can require
contractors and sub-contractors to share the liabilities of an employer. Any person or
business which has significant involvement with the management or operation of a
business, or who is engaged as a primary or sub-contractor, should check its potential
liabilities as an "employer" under the act. If so, it should try to assure that the actual
employer is in compliance with the act and should try to obtain indemnification from
the actual employer protecting it from liability under the act.
Working Hours
Normally an employee can be required to work a maximum of eight hours per day
and a maximum of 48 hours per week. If the work might be considered hazardous, the
maximums are seven hours per day and 42 hours per week. An employee working at
least five hours in a day must be given a rest period of at least one hour. An employee
must be given at least one day off each week.
Overtime
An employee normally cannot be required to work overtime. Rather, the employer
must receive the employee's prior consent. The employee's consent is not required if
the nature of the work requires continuous performance to prevent damage to the
employer or when the work is urgent.

An employee who works overtime is entitled to overtime pay at one and one-half his
normal rate. Certain types of employees are considered "exempt" and not entitled to
overtime pay. These include employees who have authority to act on behalf of the
employer with regard to terms of employment, hiring, firing or fixing rates of pay;
employees performing work of a nature that requires performance away from the
work place and for which definite work hours cannot be fixed; and other specified
types of employees.
It is important to note that the Thai Labor Law does not appear to exempt certain
management, professional and other types of "skilled" or "white-collar" employees
who are often thought to be exempt from overtime pay. The focus of the overtime
exemption is on management employees who have supervisory authority. An
employer in Thailand should take special care in assuring that it complies with the
overtime requirements for all of its employees.
Place of Payment of Wages and Salaries
Under the Labor Protection Act, the employer must pay the wages or salary of an
employee at the place of work unless the employee agrees to another place or method
of payment. Thus, an employer using automatic deposit into an employee's bank
account must first obtain the permission of that employee. The employee cannot be
compelled to accept payment in this fashion.
Public Holidays
An employer must grant its employees a minimum of 13 paid public holidays each
year. If a public holiday falls on a weekly day off, the next working day must be
granted as a paid holiday. The public holidays must include Labor Day (May 1). The
other twelve holidays must be chosen from a list of 16 holidays published by the Thai
government. An employer must notify its employees which days will be considered
public holidays before the beginning of the calendar year.
Annual Leave
An employee who has worked at least one year must be granted a minimum of six
days paid annual leave each year.
Sick Leave
An employee must be granted a minimum of 30 days paid sick leave each year. An
employee using sick leave for three consecutive working days can be required to
provide a physician's certificate proving the illness.
Maternity Leave
An employee who is an expectant mother must be granted a minimum of 90 days
maternity leave. The employee is entitled to be paid for 45 days of the maternity
leave. The remainder of the leave can be unpaid depending upon the employer's
policies.

Termination and Severance


An employee normally must be given notice of termination at least one pay period or
one month in advance of termination, whichever is shorter. This notice period does
not apply to employees being terminated for cause.
"Cause" includes:
1. dishonest performance of duties or an intentional criminal offense against the
employer;
2. intentionally causing harm to the employer;
3. violating work rules or orders of the employer for which a written warning has
previously been issued to the employee (serious violations might not require a
warning);
4. neglecting the employee's duties for three consecutive working days without
justifiable cause;
5. gross negligence causing serious harm to the employer;
6. being sentenced to imprisonment.
Except in cases in which the termination is "for cause" as described immediately
above, a full-time employee who is terminated by an employer must be paid
severance pay as follows:
Period of Employment
More than 120 days
but less than 1 year
At least 1 year
but less than 3 years
At least 3 years
but less than 6 years
At least 6 years
but less than 10 years
At least 10 years

Amount of Severance Pay


30 days wages or salary
90 days wages or salary
180 days wages or salary
240 days wages or salary
300 days wages or salary

Employees for a fixed duration do not qualify for severance. Under the Labor
Protection Act, such employees must have a written contract of not more than two
years duration. Work qualifying for such a contract must be a special project not in the
normal course of the employer's business, or must be for temporary or seasonal
employment.
Change of Work Place
When an employer changes its place of business in such a way that it will materially
affect the ordinary course of living of an employee, the employer must give the
employee at least 30 days prior notice of the relocation. If the employee does not wish
to continue working at the new place of business, the employer must pay the
employee "special severance" at 50% of the normal severance rates.

Work Rules
An employer of ten employees must publish employee work rules covering, at a
minimum, the following policies:
1.
2.
3.
4.
5.
6.
7.
8.

working days, working hours and rest periods;


weekly and public holidays;
overtime and holiday work;
date and place of payment of wages;
sick leave and maternity leave;
disciplinary system;
grievance procedures;
termination and severance pay.

The work rules must be in the Thai language.


Welfare Committee
An employer of 50 or more employees must form a welfare committee having at least
five employee members. The employer must meet with the committee at least once
every three months.
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Other Laws Affecting Labor
In addition to the Thai Labor Protection Act, other laws of concern to employers in
Thailand include: the Social Security Act, the Workers Compensation Act, rules on
minimum wages, the Labor Relations Act, the Alien Workers Act and the Revenue
Code.