Thai Employment Contracts
An employment contract creates a relationship between an employer and his employee. 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. The contract can be written or verbal. The employment contract can be for a fix period of time or a non-definite period of time.
The employment contract initiates certain rights and obligations for both parties. The employee has a duty to render service. The employer has a duty to pay remuneration for such service. Under Thai law, the remuneration can only be in the form of money or valuable items and has to be paid in a fixed period (daily, weekly, monthly, or at the time of service).
If the employee wilfully disobeys or habitually neglects lawful commands of the employer, is absent from work, is guilty of gross misconduct, or acts in a manner incompatible with the faithful discharge of his duty, the employee may be dismissed without notice or compensation. If the employee is dismissed through no fault of his own, the employee may be owed severance payment.
The right to and amount of severance payment is determined by the length of employment, cause of the termination of the employment, and the type of employment contract. There is no right to severance for a fixed period employment contract for less than 2 years if the employment naturally terminated at the end of the contract. There is no right to severance if the termination of the contract was based on misconduct of the employee as outlined above. There is also no right to severance if the employment was terminated by the employee.
If the employee is dismissed through no fault of their own and has worked for the employer for 120 days or more, they have a right to severance payment from the employer. Thai labor law does not make any distinction on the legal status of the employee. There are special rules for the calculation of severance payments depending on multiple factors including but not limited to notice requirements, types of employment, and possible disruption of the business.
See the rights of workers in Thailand that are covered by several Thai labor legislations.
Category: Civil and Commercial Law, Labor Protection
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