Employment contract in Thailand

Table of Contents

Sources of Labor Law in Thailand

The main sources of labor law in Thailand are the Labor Protection Act B.E. 2541 (1998), which regulates the basic aspects of employment relations, and Sections 575-586 of the Civil and Commercial Code, dedicated to the provision of services.

Other key laws include:

The Labor Relations Act (B.E. 2518, 1975): Fundamental principles of relationships between employees and employers.
The Establishment of Labor Courts Act (B.E. 2522, 1979): Resolution of labor disputes through labor courts.
The Provident Fund Act (B.E. 2530, 1987): Management of provident funds for employees.
The Social Security Act (B.E. 2533, 1990): Social insurance system.
The Workmen’s Compensation Act (B.E. 2537, 1994): Compensation for work injuries and illnesses.
The Royal Decree on Managing the Work of Aliens (B.E. 2560, 2017): Regulation of foreign labor.
The Home Workers’ Protection Act (B.E. 2554, 2011): Protection for individuals working from home.
The Occupational Safety and Health Act (B.E. 2554, 2011): Safe working conditions.
The main regulatory body for labor standards, protection, and social security in Thailand is the Ministry of Labor.

Concept of Employment Contract in Thai Law

The Thai Labor Protection Act provides the following definition of an employment contract: ‘An employment contract means a contract, whether written or oral, expressly stated or implied, according to which a person, referred to as the Employee, agrees to work for another person, referred to as the Employer, and the Employer agrees to pay wages for the duration of the work.’

Section 575 of the Thai Civil and Commercial Code defines an employment contract as ‘a contract according to which a person, referred to as the Employee, agrees to provide services to another person, referred to as the Employer, who agrees to pay compensation for the duration of the services.’

Form of the Employment Contract

While Thai legislation does not require an employment contract to be in written form, it is strongly recommended to conclude such contracts in writing. This ensures a clear definition of the rights and obligations of each party, thereby helping to prevent potential disputes and disagreements.

Language of the Employment Contract in Thailand

An employment contract in Thailand does not necessarily have to be in the Thai language. The validity of the contract depends on the understanding by both parties of its content and compliance with Thai law.

Parties must be fluent in the language of the contract. If the parties later claim that they did not understand the contract, this can create problems.

In the Thai business environment, English serves as a lingua franca, especially in international business. Many contracts are drafted only in English. However, in some cases, it is recommended to have a Thai language version. This is particularly important for employment contracts with Thai employees.

Content of the Employment Contract

Here are the key aspects that should be considered or are recommended for inclusion in an employment contract:

Personal details of the employer and employee.
Start date of employment and duration of the contract.
Probation period.
Working conditions.
Functions and duties of the employee.
Job position and its description.
Working days and hours, including break schedules.
Compensation and terms of payment, including information about bonuses and additional payments.
Rules and conditions for granting leave.
Provisions on confidentiality and non-disclosure obligations.
Rights to intellectual property created during employment.
Prohibition on poaching employees or clients and non-competition clause.
Terms and procedure for termination of the employment contract.
Methods for resolving labor disputes and procedures for seeking help in case of conflicts or problems at the workplace.

Local Rules

In Thailand, employers with ten or more employees permanently are required to develop and maintain written work rules and norms (the Thai equivalent of internal labor regulations). These documents should be easily accessible to all employees and displayed in their workplaces. The employer also has the right to inform employees of the rules through electronic means, such as the company’s intranet. Mandatory elements of these rules include:

Working days, standard working hours, and breaks.
Official holidays and the use of leave.
Conditions and payment for overtime work, including on holidays.
Dates and place of wage payments, as well as payments for overtime and holiday work.
Rules for granting leave.
Procedure for imposing disciplinary sanctions.
Methods for filing and processing complaints.
Conditions of dismissal, including the size and specifics of severance pay.

Additionally, an employer hiring ten or more people regularly is required to maintain:

An employee registers with their personal data, start dates, salaries, and other information.
Documentation related to the payment of wages, including data on working days, hours, and amounts of payment.

Duration of the Employment Contract in Thailand

In Thailand, employment contracts can be either fixed-term or indefinite (open-ended).

Fixed-Term Employment Contract

This type of contract involves performing work for a specific period and is executed in writing with a clear indication of the start and end dates. Thai legislation sets certain restrictions for such contracts aimed at protecting the labor rights of employees, including in matters of termination.

The duration of work under a fixed-term employment contract should not exceed two years.

Fixed-term employment contracts can be concluded for the following types of work:

Execution of a special project that goes beyond the normal activities of the employer.
Work that has strictly defined start and end dates.
Seasonal work is required from the employee.

At the end of the term specified in the contract, the employee must complete their duties, and the contract cannot be extended. Otherwise, it will not be considered a fixed-term employment contract.

Indefinite Employment Contract

A contract concluded without a fixed end date, allowing the employee to remain in the position as long as their work meets the employer’s requirements.

Probation Period in Thailand

There is no specific regulation on trial periods or probation, except that the Labour Protection Act stipulates that “a probationary contract shall also be deemed as an indefinite period contract of employment.”

Thai legislation does not specify exact limitations for the probation period. However, most employers set it at 119 days or less, based on the provisions of the Labor Protection Act. According to this Act, starting from the 120th day of employment, an employee who is terminated becomes eligible for severance pay.

Within the established probation period, which does not exceed 119 days, the employer has the right to terminate the employment contract without the obligation to pay severance. It is important to note that even if the probation period is extended, its total duration should not exceed 119 days. Should it exceed this limit and the employee is subsequently terminated, the employer will be obligated to pay severance pay.

Working Hours and Holidays in Thailand

Under Thai laws, working hours typically do not exceed 8 hours per day and 48 hours per week. For harmful or dangerous jobs, this is reduced to 7 hours per day and 42 hours per week. The workweek should not exceed six days, and employers are required to inform employees of the schedule, including breaks.

Every employee is entitled to at least one paid day off per week, usually on Sunday. In some cases, depending on the nature of the work, such as in the hospitality business, it is possible to reschedule and accumulate days off for use in the following four weeks.

Public Holidays in Thailand

Employees in Thailand are entitled to expect at least 13 public holidays per year.

The commonly accepted official holidays are listed below

Commercial Holidays

New Year’s Day: January 1
Chinese New Year: January-February (changes annually)
Makha Bucha Day: February-March (changes annually)
Chakri Day: April 6
Songkran Day: April 13
National Labor Day: May 1
Coronation of King Vajiralongkorn: May 4
Visakha Bucha Day: May (changes annually)
H.M. Queen Suthida’s Birthday: June 3
Asarnha Bucha Day: July (changes annually)
H.M. King Maha Vajiralongkorn’s Birthday: July 28
Queen Sirikit’s Birthday / National Mother’s Day: August 12
Anniversary of the Passing of King Bhumibol: October 13
Chulalongkorn Day: October 23
King Bhumibol’s Birthday / National Father’s Day: December 5
Constitution Day: December 10
New Year’s Eve: December 31

Government Holidays

New Year’s Day: January 1
Makha Bucha Day: February–March (changes annually)
Chakri Day: April 6
Songkran Day: April 13–15
Coronation of King Vajiralongkorn: May 4
Royal Ploughing Day: May (changes annually)
Visakha Bucha Day: May (changes annually)
H.M. Queen Suthida’s Birthday: June 3
Asarnha Bucha Day: July (changes annually)
Buddhist Lent Day: July (changes annually)
H.M. King Maha Vajiralongkorn’s Birthday: July 28
Queen Sirikit’s Birthday / National Mother’s Day: August 12
Anniversary of the Passing of King Bhumibol: October 13
Chulalongkorn Day: October 23
King Bhumibol’s Birthday / National Father’s Day: December 5
Constitution Day: December 10
New Year’s Eve: December 31

Bank Holidays

New Year’s Day: January 1
Makha Bucha Day: February–March (changes annually)
Chakri Day: April 6
Songkran Day: April 13
National Labor Day: May 1
Coronation of King Vajiralongkorn: May 4
Visakha Bucha Day: May (changes annually)
H.M. Queen Suthida’s Birthday: June 3
Half-Year Holiday: July 1
Asarnha Bucha Day: July (changes annually)
H.M. King Maha Vajiralongkorn’s Birthday: July 28
Queen Sirikit’s Birthday / National Mother’s Day: August 12
Anniversary of the Passing of King Bhumibol: October 13
Chulalongkorn Day: October 23
King Bhumibol’s Birthday / National Father’s Day: December 5
Constitution Day: December 10
New Year’s Eve: December 31

Additional Holidays The Thai government may announce additional public, government, and bank holidays on special occasions. Employers are advised to stay informed about such temporary holidays.

Annual Leave

According to the law, after a year of employment, an employee is entitled to an annual paid leave of not less than six working days.

Sick Leave

Employees are granted sick leave in case of illness. If an employee takes sick leave for more than three days, the employer may require a medical certificate from a licensed doctor or an official medical institution. An employee is allowed to use up to 30 days of sick leave per year.

Other Leaves

Maternity and Paternity Leave

The maximum amount of maternity leave is 98 days (including holidays), which includes time spent on prenatal care. A pregnant woman is entitled to receive pay for 45 days of leave.

Paternity Leave

Within 30 days of the birth of a child, government employees or public sector workers are entitled to 15 days of paid leave. Officials who take additional leave for child care do not receive payment. Paternity leave is not legislatively provided in the private sector, although employers may offer paid or unpaid leave.

Military Service Leave

Male employees are granted leave for military service, including assemblies, military exercises, or other events in accordance with military service laws. They receive their usual salary during the leave, but not more than 60 days.

Personal Leave

Employees are granted leave for personal matters for up to three working days per year. The employer is not allowed to deduct this leave from annual leave.

Educational Leave

An employee has the right to take leave for education or training in the following cases:

Acquiring skills to improve labor and well-being or increase the efficiency of the employee’s work.
Testing the level of education, as required by the government; however, this does not apply if the training is initiated by the employee.

All applications for leave must be submitted to the supervisor at least seven days before the start, and the employee can go on leave only after receiving approval from the supervisor. For this leave, the employee does not receive their basic salary.

Termination of Employment

The Labor Protection Act and, in part, the Civil and Commercial Code, govern the termination of employment contracts, as well as dismissal at the initiative of both the employee and the employer.

Expiration of the Employment Contract

An employment contract terminates at the end of the period specified in the contract without the need for prior notice. In this case, the employee is not entitled to severance pay. If the employee continues to work after the expiration of the contract and the employer, being aware of this, does not object, it is assumed that the parties have entered into a new employment contract on the same terms. Either party may terminate the contract by notifying the other party in accordance with the general rules.

Resignation Initiated by the Employee

When an indefinite employment contract is concluded, an employee may resign by notifying the employer on the salary payment day or earlier, so that the resignation takes effect on the next salary payment day. The notice period cannot exceed three months. The employer must pay the salary for the actual period worked and compensation for unused leave days. Severance pay is not provided in this case.

Dismissal Initiated by the Employer

The employer has the right to dismiss an employee (for example, for gross violations) or terminate the employment contract. Each option requires consideration of obligations regarding the notice period and the payment of severance pay.

Immediate Dismissal

Immediate dismissal is possible for the following reasons:

Dishonest performance of duties or intentional commission of a crime against the employer;
Intentional damage to the employer;
Negligence leading to serious damage to the employer;
Violation of labor discipline, rules, or orders of the employer, provided that the employee was notified in writing, except in cases of serious violations where notification is not required. The written notification is valid for one year from the date of the violation;
Absence without a valid reason for three consecutive working days;
Conviction to imprisonment by a final court judgment.

In such cases, the employer has the right to dismiss the employee without observing the notice period and without paying severance pay. Additionally, dismissal without warning and compensation is possible in case of intentional disobedience to the lawful demands of the employer, absence, gross violation of labor discipline, or behavior incompatible with honest performance of duties.

Termination of the Employment Contract at the Employer’s Initiative

The employer may terminate an indefinite employment contract by notifying the employee in writing on the salary payment day or earlier, so that the termination takes effect on the next salary payment day. The notice period should not exceed three months. The employer may also pay the salary up to the moment of contract termination, as indicated in the notification, and dismiss the employee immediately.

Termination of the Employment Contract by Mutual Agreement

The employment contract can be terminated by mutual agreement of the parties.

Suspension from Work

If an employee is suspected of committing a crime and an investigation is underway, the employer cannot suspend the employee’s work unless authorized by the employment contract or collective agreement. The employer must issue a written suspension order, stating the reason and period of suspension, not exceeding seven days, and notify the employee in advance. During the suspension, the employer must pay a salary of at least 50% of the usual rate. If the investigation concludes that the employee is innocent, the employer must pay the full salary for the suspension period and interest at the rate of 15% per annum.

Severance Pay

Upon dismissal, the employer is required to pay severance pay as follows:

From 120 days to 1 year of work: 30 days of the last salary;
From 1 to 3 years of work: 90 days of the last salary;
From 3 to 6 years of work: 180 days of the last salary;
From 6 to 10 years of work: 240 days of the last salary;
From 10 to 20 years of work: 300 days of the last salary;
More than 20 years of work: 400 days of the last salary.

In calculating the length of service for severance pay, holidays and weekends provided by the employer for the benefit of the employee, as well as leave days, are taken into account. However, if the dismissal occurs for reasons specified in Article 119 of the Labor Protection Act, the employee is not entitled to severance pay.

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

Minimum Wage for Foreigners in Thailand

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.

If you have any questions about labor law in Thailand, please email me or use the form below.