Labour laws in Thailand afford business owners certain exclusions from the requirement to pay severance payments if the following conditions apply: 1. The first time one enters or hired by the company, they should have to sign an employment contract and understood everything that is stated therein. The basic presumption of Thai Labor Law is that the Employer is in a superior position in relation to the Employee therefore Employees require the law to equalize the imbalance of power. For the purpose of taxation, individual taxpayers are categorized into “resident” individuals or “non-resident” individuals. Thailand has a complex and strictly regulated employment system. Legal documents translation. Save my name, email, and website in this browser for the next time I comment. Stay Ahead of the curve in Emerging Asia. Under Thai law, there are no requirements that employment contracts be made in writing. Your email address will not be published. For employees involved in hazardous work, normal working hours are restricted to seven hours per day and 42 hours per week, Terminating employment contracts and severance pay, If an employment agreement does not specify the contract’s duration, both employers and employees have a statutory right to terminate the contract after giving prior notice. Visa for Thai citizens. Thai labor laws serve as the best safeguard of the rights regarding employment in Thailand. ASEAN Briefing is produced by Dezan Shira & Associates. While there is a general recognition of freedom to contract, it is not possible to contract around the minimum standards imposed by applicable Thai labor law. This covers areas such as working hours, holidays and leave, notice, overtime, sick pay, where summary dismissal is permitted without severance pay or notice, and the calculation of severance pay in a case … They are probably very different to labor and employment laws in your home country. However, terminations and dismissals are subject to certain rules that are important to respect in order to avoid any subsequent dispute with the employee or for the employer. 1. An employment contract is defined under the Labour Protection Act BE 2541 (1998) as an agreement, either written or verbal, that clearly or implicitly states that the employee agrees to work for the employer and that the employer agrees to pay a wage throughout the work period. A well written employment contract can prevent and settle disputes which may arise in the future. Current personal income tax rates for resident individuals are laid out in the table below. As a result, all foreign employees working in Thailand qualify as resident individuals and are liable to pay tax on their income earned in the country as well as on the income earned from abroad. It sets the rights and obligations of the employers towards its employees and vice versa. If the employment agreement does not specify the duration of the contract, both the employer and employee have a statutory right to terminate the contract after giving prior notice. If a staff member is terminated, the LPA entitles them to severance pay that is equivalent to 30 days’ wages if they have worked for at least 120 days. Thailand does not mandate a written agreement between the employer and an employee. Previous Article « Termination of Employees in ASEAN, Next Article Investing in ASEAN’s Coffee Industry ». Foreign employees working in Thailand may seek tax benefits available under relevant double taxation treaties between Thailand and their home country. As per amendments to the LPA, which were passed by the Thai National Assembly on December 13, 2018, employees with at least 20 years of service will be entitled to a severance pay equivalent of 400 days’ of the last drawn salary. The Ministry of Labour (MOL) is the primary authority responsible for setting and enforcing minimum employment standards within the country. Thai Labor Contracts: What You Need to Know. Further information about our firm can be found at: www.dezshira.com. These laws cover all areas related to employment such as working hours, holidays and leave, notice, overtime, sick pay, and severance, and are applicable to both Thai and foreign employees. Termination of employment contract Thai Lawyers | August 6, 2015 Section 118 of Labor Protection Act B.E. 2. Social Security Act, which established the labour court and its procedure; Rules concerning overtime work and working over holiday periods; When and where the payment of basic, overtime, holiday and holiday overtime pay will take place; Termination of employment, severance pay and special severance pay. Labor: Our labor and employment team represents multinational and domestic companies in several economic sectors on strategic labor matters. Malaysian Labor Contracts: What You Need to Know, Click to share on Facebook (Opens in new window), Click to share on LinkedIn (Opens in new window), Click to share on Twitter (Opens in new window), Click to share on Pinterest (Opens in new window), Click to email this to a friend (Opens in new window), Thai Labor Contracts: What You Need to Know. Labor law or Employment law cases may also involve issues of wrongful termination, breach of contract or injuries that occur during scope of work. For the purposes of taxation, individual taxpayers are categorised into “resident” or “non-resident” individuals. wrongful acts between employers and employees in connection with a labor dispute or in connection with the performance of work under an employment agreement. The scope of this law has been expanded, such that relocating employees from one office in Thailand to another existing office in country will benefit from choosing to accept the relocation, or to terminate its employment contract and be entitled to severance pay according to the law. Under the principle of Freedom of Contract, as long as both parties agree to the contract and it is not against the public order or good moral, Thailand will accept the validity of the contract. Notary. Post was not sent - check your email addresses! Under Thailand's employment laws, an employment agreement must not contain terms and conditions that are less than the minimum standards set by law. Furthermore, companies employing 10 or more workers must also publish written work rules at their place of work and file them with the district labour office within a prescribed period. 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