14 B.E. It sets the rights and obligations of the employers towards its employees and vice versa. If an employment agreement is made in writing, an employer must provide a copy to the employee immediately after it has been signed. The Ministry of Labour (MOL) is the primary authority responsible for setting and enforcing minimum employment standards within the country. Your email address will not be published. Furthermore, there is also a provident fund into which both employers and employees are required to make equal monthly contributions, ranging at between two and 15% of the worker’s monthly remuneration. Whether you are an employer or an employee, Juslaws & Consultinforms you about your rights regarding termination of employment in Thailand. For employees involved in hazardous work, normal working hours are restricted to seven hours per day and 42 hours per week. Under Thai law, there are no requirements that employment contracts be made in writing. Notice (Please also see our comment in Q4-5) Under the LPA, unless a longer notice period is provided for in an employment agreement, an employee is generally entitled to receive one full pay period’s 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 … Our assistance includes both complex labor matters and routine queries related to human resources practices or general labor law aiming to assist the day-to-day operations of the client. A non-resident, on the other hand, is exempted from paying tax on income earned in Thailand. As a result, professional advice in preparing employment contracts can help employers both avoid legal disputes with staff and ensure compliance with the law. An employment contract creates a relationship between an employer and his employee. For the purposes of taxation, individual taxpayers are categorised into “resident” or “non-resident” individuals. 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. 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. Employment in Thailand may be terminated for a variety of reasons, including the following: Completion of agreed upon work. ... such employee has the right to terminate the employment contract and be entitle to special severance pay at the rate of not less than 50 per cent of the rate of severance pay which the employee would be entitled to under Clause 8.1. The MOHRE standard contract is issued now in dual English and Arabic and dual with other popular largely South-Asian languages. Labor law arises from the law of contract, which is based on the Civil and Commercial Code. In Thailand, the employee-employer relationship is governed by a series of laws and regulations, the chief one being the Thai Labor Protection Act B.E.2541 (LPA) and the Thai Civil and Commercial Code (TCCC). Thai law does not explicitly mention probationary periods in regard to employment relationships. Managing Contracts and Separation in ASEAN, Dezan Shira & Associates' Service Brochure. However, it does specify severance pay for employees who have worked for 120 days or more and are terminated without cause. Thai labor laws are in general more favorable to employees than employers. Both employers and employees must contribute to the SSF at a rate of 5% of the staff member’s income, up to a maximum of THB750 (US$23) per month. Please contact us at asia@dezshira.com or visit our website at www.dezshira.com. and grow their operations. Employers are generally required to register their employees with the workmen compensation fund and social security fund. All blog comments are checked prior to publishing, Workmen Compensation and Social Security Fund. Thai labor law is relatively flexible for employers. Employment contract does not only apply to full-time employees but to everybody. 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. 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. If they have worked for between one to three years, they are eligible for the equivalent of 90 days’ pay. But, and this is very important, a severance or ex gratia payment was not compulsory under Thai labor law before 1 September 2017. Probationary agreements are considered "indefinite-term." Rest Period. including the most recent legal, tax and accounting changes that affect your business. With... Dezan Shira & Associates helps Current personal income tax rates for resident individuals are laid out in the table below. Under Thai laws, the following financial compensations are required to be paid in order to terminate the employment contract. 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. Visa for Thai citizens. Special Your email address will not be published. Employers often believe that fixed-term employment contracts provide advantages over indefinite-term agreements because of the complexity of terminating workers under Thai law. Termination of employment is defined as follows. In Thailand, the employer-employee relationship is governed by a series of laws and regulations, the chief ones of which are the Thai Labour Protection Act B.E.2541 (LPA) and the Thai Civil and Commercial Code. Thai law draws a distinction between employees with an employment contract and independent contractors working with a service contract. These rules must be published in both Thai and English for the benefit of foreign workers. An employee whose employment is stipulated in a contract set for a definite periodand the employment is terminated at the end of that period, if this form of employment is in compliance with the Thai labour laws and regulations (Section 118 of the Act). Thai Labor Contracts: What You Need to Know. Employers are usually required to register their employees with the Workmen Compensation and Social Security Fund (SSF). Rest period during normal work. 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. In Thailand, the employee-employer relationship is governed by a series of laws and regulations, the chief one being the Thai Labor Protection Act B.E.2541 (LPA) and the Thai Civil and Commercial Code (TCCC). be provided by law to domestic workers under the Thai Labour Act B.E. Legal documents translation. The main Thai labour law consists of the Civil and Commercial Code on contracts relating to the Hire of Services (Book III, Title VI), the Labour Protection Act 1998, the Labour Protection Act (No.2) 2008, the Labour Protection Act (No.3) 2008, the Labour Relations Act 1975, the Act on Establishment of Labour Courts and Labour Court Procedures 1979, the Social Security Act 1990 and the Compensation Act 1994. Previous Article « Termination of Employees in ASEAN, Next Article Investing in ASEAN’s Coffee Industry ». businesses establish, maintain, Essay on Thai Labour Law on Employment Termination "If the parties have not fixed the duration of the contract either party can terminate it by giving … Other important legislation includes the: These laws, which are applicable to both Thai and foreign workers, cover all areas related to employment such as working hours, holidays and leave, notice, overtime, sick pay and severance. But it does specify that severance must be paid to employees who have worked for 120 days or more and are terminated without cause. While Thailand does not mandate a written agreement between employers and staff, it does impose strict labour regulations with regards to working terms and conditions. Termination of employment contract Thai Lawyers | August 6, 2015 Section 118 of Labor Protection Act B.E. When managing a business in Thailand with employees, senior management should pay attention to the Labour Protection Act (1998) (“ LPA ”) and its related Ministerial Regulations given the broad impact it has coupled with the legal penalties which can … Further, a provident fund is managed wherein both employer and employee make equal monthly contribution ranging between two to 15 percent of the monthly remuneration. The minimum notice period must be at least one week and not more than three months long. 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. The principal component of labor law is the Labor Protection Act, which was enacted in 1998. The firm assists foreign investors throughout Asia and maintains offices throughout ASEAN, including in Singapore, Hanoi, Ho Chi Minh City and Jakarta. 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. Without prior notice, employers are required to provide salary in lieu of such notice. Notary. Legal. We know that every situation is unique, therefore it is essential to seek a consultation with someone who is specialized in Thai Labor Law to fully underst… This article was first published on ASEAN Briefing. 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. Further information about our firm can be found at: www.dezshira.com. For the purpose of taxation, individual taxpayers are categorized into “resident” individuals or “non-resident” individuals. August 24, 2015. Under Thailand's employment laws, an employment agreement must not contain terms and conditions that are less than the minimum standards set by law. Post was not sent - check your email addresses! Power of attorney. Labour rules, laws and regulation in Thailand, 3. Thailand Severance Pay and Termination Issues. Professional advice in preparing an employment contract can significantly help employers avoid legal disputes with their employees and ensure complete compliance with Thai labor laws. The published rules must include information about the following: In addition, a workplace with 20 or more employees must also provide a written agreement about working conditions as part of an employee’s contractual employment terms. Thai law does not explicitly mention probationary periods in regard to employment relationships. Employment with a definite periodis allow… A copy immediately after it has been signed that under Thai law are checked prior to,... 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