Employment (or labour) matters are generally governed by the Labour Protection Act B.E. 2541 (1998) as currently amended and those sections of the Civil and Commercial Code that deal with the hire of services. Other laws include Acts dealing with matters including foreign employment, social security, workers’ compensation and health and safety in the workplace.

Employers must meet statutory minimum standards of employment and cannot implement or enforce employment conditions that do not comply with the Labour Protection Act.

Employers with 10 or more employees are required to publish written work rules and regulations in Thai and display them in the work place at all times. The rules and regulations may be displayed physically or electronically, e.g., on a company’s local network.

At minimum, the rules and regulations must make reference to the following:

• Details of working days, regular hours and rest periods
  
• Details of holidays and procedures for taking holidays
  
• Rules relating to leave and procedures for taking leave
  
• Rules on overtime and working during holidays
  
• Details concerning the payment of wages, overtime pay, holiday pay and holiday overtime pay
  
• Guidelines relating to matters concerning discipline and disciplinary actions or procedures
  
• Guidelines relating to the procedure for the submission of grievances
  
• Guidelines relating to the procedure for the termination of employment and severance pay

Employers with 10 or more employees should additionally maintain the following at the place of work:

• A register of employees in Thai which includes dates of employment and wage rates
  
• Any documentation concerning the calculation of wages in Thai, e.g., working days, hours and wages

Normal working hours must not generally exceed 8 hours per day or 48 hours per week, but maximum working hours are fixed depending on the type of work being conducted. Certain categories of work deemed potentially detrimental to an employee’s health in ministerial regulations cannot exceed 7 hours per day or 42 hours per week. In the event work hours exceed 8 hours per day, an employer is required to pay an employee 1.5 times the hourly rate.

Employees are entitled to a break of one hour following 5 consecutive working hours. This may be varied by mutual consent, but in any event may not be less than one hour per day.

The minimum wage is set periodically by the Ministry of Labour and Social Welfare. For current rates, please refer to the latest Notification of the Ministry of Labour and Social Welfare Regarding Prescribing Minimum Wages.

It should be noted that there are separate minimum wages for foreign employees.

The Social Security Act B.E. 2533, as amended, provides that any employer (with some limited exceptions), irrespective of number of employees must register with and contribute to the Social Security Fund. The Act requires the government, employers and employees to contribute, on a monthly basis, to the fund. Under current rates, an employer and an employee both contribute at a rate of 5% of the employee’s wages (capped at 750 THB per month) and the government contributes at a rate of 2.75%.

Once registered, an employee becomes an ‘insured person’ and is entitled to limited compensation and benefits in relation to contingencies such as unemployment, injury and illness not related to work, maternity, disability not related to work etc.

The Labour Protection Act provides that an employee may be terminated without notice or compensation in any of the following circumstances:

• The employee has dishonestly performed his or her duty or intentionally committed a criminal offence against the employer
  
• The employee has intentionally caused damage to the employer
  
  
• The employee has negligently caused serious damage to the employer
  
  
• The employee has violated work regulations, rules or lawful orders of the employer following the issuance of a written warning. Serious misconduct may justify immediate termination without a written warning
  
  
• The employee has neglected work duties for 3 or more consecutive working days without a justifiable reason
  
  
• The employee has been imprisoned by a final judgment and order. In the event an offense is committed by negligence or is considered a minor offence, it must be in circumstances where damage has been caused to the employer

In the event of termination without cause, an employer is legally obliged to provide an employee with written notice and compensate the employee based upon the length of the period of the employee’s unbroken service. Immediate termination may be effected by a payment in lieu of notice.

Compensation is calculated as follows and is inclusive of holidays, leave days and any other days where the employer has ordered any work stoppage:

120 days but less than 1 year – 30 days
1 year but less than 3 years – 90 days
3 years but less than 6 years – 180 days
6 years but less than 10 years – 240 days
10 years but less than 20 years – 300 days
20 years or more – 400 days

In circumstances where the conduct of an employee very obviously falls within one or more of the definitions provided by the Labour Protection Act, there are generally no issues with terminating an employee with cause.

Employers do need to be far more careful however where the matter is less straightforward, or the manner in which the employee was ultimately terminated might be construed as lacking or improper. Access to the Labour Court, which has wide discretion when interpreting the rules, is relatively inexpensive and challenges on the basis of unfair dismissal are not uncommon.

If you are an employer considering action against an employee that is likely to result in termination with cause, please contact us before you take any action. We can advise you in relation to sufficiency of grounds, necessary evidence and the procedures that ought to be followed in order to ensure the termination is not successfully challenged.

Equally, if you are an employee who believes you were unfairly dismissed, please feel free to contact us for advice. We have a great deal of experience in this area.

Primarily, foreign workers are required to have a valid non-immigrant visa (or be a permanent resident of Thailand) and a work permit issued by the Department of Employment in order to conduct any work in Thailand. The definition of work is very broad in Thai law and includes physical and mental work which is both paid and unpaid.

Working without a valid work permit is a criminal offence and subject to a fine of up to 50,000 THB for employees. This is generally followed by deportation and blacklisting from re-entry to Thailand. Employers are also subject to fines of up to 100,000 THB for each foreign employee they hire without a work permit, with higher fines and even imprisonment for repeat offenders. The employer may also be banned from hiring foreign workers for up to 3 years.

As discussed, an applicant must have either a valid non-immigrant visa (type ‘B’ or ‘O’) which is generally obtained before entry to Thailand, or a permanent resident permit. The applicant must not be involved in any of the occupations reserved for Thais listed in the schedule annexed to the Royal Decree Stipulating Work in Occupations and Professions Prohibited to Foreigners B.E. 2522 (1979) and, on the basis they are working for a limited company in Thailand, the company must submit a significant amount of supporting documentation to the Department of Employment.

Key factors involved in the consideration of whether to grant a work permit by officials include the following:

• The type of employer or work
  
• The level of capitalisation of the company
  
• The qualifications of the applicant
  
• The number of Thai employees in a company
  
• The reasons for not employing a Thai national in the position

A work permit can be granted for a period of up to 2 years irrespective of the underlying period of stay granted to the applicant by the immigration authorities and is renewable. Work permits for small to medium enterprises are generally granted for a period of a year and are renewable.

Our lawyers have a great deal of specialist knowledge in relation to work permit applications and significant practical experience in dealing with the relevant officials. We can advise on the requirements and whether a work permit is likely to be granted before an application is made, as well as deal with the entire process from start to finish, whatever the size of your business.

Please contact the LAFS corporate practice at info@lafs-legal.com  if you need any further information or assistance with any of the issues raised in this Q&A.