legislation has a direct bearing on labour practices
of each type of business. Investors should seek appropriate
advice to determine which legislation applies to their
line of business.
Protection Act (1998)
In August 1998, the Labour Protection Act went into
effect. It applies to all businesses with at least one
employee. Under the law, employers, who disregard the
law, are subject to fines ranging from 5,000 Baht to
200,000 Baht and imprisonment of up to 1 year. It should
be noted that domestic workers (household staff) are
not included in the definition of "employee"
and are not covered by the Labour Act.
All other employees, whether full or part time, seasonal,
casual, occasional or contract employed, are covered.
protection regulations contained in the new law are:
Hours and Holidays
The maximum number of hours for non-hazardous work is
8 hours a day or 48 hours a week in total. For some
types of work as stipulated by law the employer and
the employee may agree to arrange the period of working
hours, but it still must not exceed 48 hours a week.
Hazardous work may not exceed 7 hours a day or 42 hours
per week. Employees are entitled to no fewer than 13
national holidays a year and a minimum of 6 days of
annual vacation after working consecutively for 1 full
year. Employees have the choice of whether they wish
to work overtime or on holidays. female employees are
entitled to maternity leave for a period of 90 days
including holidays, but paid leave shall not exceed
employees are entitled to a daily rest period of at
least 1 hour after working 5 consecutive hours. The
employer and the employee may arrange the daily rest
period to be shorter than 1 hour at each time, but it
must not be less than 1 hour a day in total. A weekly
holiday of at least 1 day per 6 day working period must
be arranged by the employer.
work performed in excess of the maximum number or working
hours fixed either by law or by specific agreement (if
the latter is lower), employees must be paid overtime
compensation. The rates for overtime vary and range
from 1 1/2 to 3 times the normal hourly wage rate for
the actual overtime worked. The maximum number of overtime
working hours is limited to not more than 36 hours a
Age for Employment
The minimum age for employment is 15 years. Workers
below the age of 18 are banned from dangerous and hazardous
jobs. They are also prohibited from working overtime,
on holidays, or between the hours of 10 p.m. and 6 a.m.
Pregnant employees are also prohibited from working
overtime, on holidays, or between the hours of 10 p.m.
and 6 a.m.
Employees can take as many days of sick leave as necessary,
but if an employee takes 3 months of sick leave, the
employer is required to pay only 1 month's wages.
Employees who have worked more than 120 days, but less
than 1 year, are entitled to 30 days severance pay.
For employee employed between 1 and 3 years, the severance
pay is not less than 90 days' pay. Employees with 3
to 6 years of service will receive 6 months salary,
those with more than 6 to 10 years service will receive
8 months salary, and employees with more than 10 years
of service will receive 10 months salary as Severance
Conditions for termination of employment are also laid
out in the Act and a code governs unfair practices and
unfair dismissals, which often are the result of the
failure to follow correct legal procedures. Employee
Associations and Labour Unions must be registered at
the Labour Department and require a license for operation.
Finally, a Labour Court specifically settles employment
disputes. If an employment contract does not specify
any duration, either party can terminate the contract
by giving notice at or before any time of payment, to
have effect in the next pay period.
In companies with at least 10 employees which do not
have a provident fund, an Employee Welfare Fund will
compensate employees who resign, are laid off, or die
in service. Employers and employees will be required
to contribute to this fund.
In addition to these provisions, there are restrictions
on the kind of work women and children can perform.
Guidelines are set for wages and overtime, as well as
resolution of labour management disputes. Employers
are required to pay compensation if employees suffer
injury, sickness or death in the course of work.
Law also requires employers to provide welfare facilities,
including medical and sanitary facilities.