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Basic Law: Labor Protection

Thai Labor Law
The basic labor law of Thailand is found in 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.

I. 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.

II. 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.
III. 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.

IV. 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.
V. 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.
VI. Annual Leave
  An employee who has worked at least one year must be granted a minimum of six days paid annual leave each year.
VII. 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.
VIII. 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.
IX. 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. 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);
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 Amount of Severance Pay
More than 120 days but less than 1 year 30 days wages or salary
At least 1 year but less than 3 years 90 days wages or salary
At least 3 years but less than 6 years 180 days wages or salary
At least 6 years but less than 10 years 240 days wages or salary
At least 10 years 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.

X. 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.
XI. Work Rules
  An employer of ten employees must publish employee work rules covering, at a minimum, the following policies:
1. working days, working hours and rest periods;
2. weekly and public holidays;
3. overtime and holiday work;
4. date and place of payment of wages;
5. sick leave and maternity leave;
6. being sentenced to imprisonment.
7. disciplinary system;
8. grievance procedures;
9. termination and severance pay.

The work rules must be in the Thai language.

XII. 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.
XIII. 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.
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