The Labour Protection Act B.E. 2541 (1998) sets minimum standards every employer in Thailand must meet, Thai or foreign-owned — working hours, holidays, wage payment, and severance on termination. Section 118 sets severance from 30 to 400 days of final wages depending on length of service. Employers with 10 or more employees must issue Thai-language work rules and publish them to staff.
Last reviewed: 2026-10-10 · General information only, not legal advice for your specific case
Who Thai labour law covers
The Labour Protection Act applies to all employers and employees in Thailand, Thai or foreign, whatever law the contract names. Any term giving employees less than the statutory minimum is void to that extent, so a parent company's English contract that conflicts with Thai law cannot simply be used as-is.
Employers must also comply with the Social Security Act, the Workmen's Compensation Act, the Labour Relations Act, occupational safety law, and the provincial minimum wage set by the Wage Committee.
Employment contracts and probation
Thai law does not require written employment contracts, but a written contract greatly reduces disputes. A good contract sets out position, duties, pay, benefits, working hours, workplace, and termination terms clearly.
Probation is widely misunderstood. The law fixes no probation period, but an employee who has worked 120 days is entitled to severance on termination — probation or not. A 119-day probation is therefore common practice, though statutory notice still applies to termination during probation.
- Define the position and duties clearly so performance can be assessed
- Pay at least the minimum wage for the province of work
- State working hours within statutory limits and how overtime is calculated
- Post-employment non-competes must be reasonable; courts may narrow them
Severance under Section 118
When an employer terminates an employee who has not committed serious misconduct under Section 119, statutory severance is due based on length of service. These are minimums — employers may pay more, never less.
| Length of service | Minimum severance (final wage rate) |
|---|---|
| 120 days to under 1 year | 30 days |
| 1 year to under 3 years | 90 days |
| 3 years to under 6 years | 180 days |
| 6 years to under 10 years | 240 days |
| 10 years to under 20 years | 300 days |
| 20 years or more | 400 days |
Notice and unfair dismissal
Besides severance, an employer terminating an indefinite-term contract must give at least one pay period's notice, or pay wages in lieu. No notice is needed for termination due to serious misconduct under Section 119.
Even with full severance paid, an employee can sue in the Labour Court for unfair dismissal. Without reasonable grounds, the court may order reinstatement or additional damages. Documented performance reviews, written warnings, and clear business reasons are therefore key evidence.
Work rules
Employers with 10 or more employees must issue Thai-language work rules within 15 days of reaching 10 employees and display them at the workplace. The rules must cover statutory minimums — working days and hours, holidays, leave, discipline and penalties, grievances, and termination.
Well-drafted work rules help greatly in disciplinary or termination matters, because they show employees were informed of the rules. Foreign companies using an English handbook should maintain a consistent Thai version.
When a labour dispute arises
1. Gather facts and documents
Collect the contract, work rules, warnings, and relevant work records.
2. Negotiate and mediate
Many disputes settle through negotiation or mediation by a labour inspector.
3. Labour inspector complaint
An employee may file a wage or severance complaint with the Labour Protection and Welfare office.
4. Labour Court case
The Labour Court mediates before trial, and employees pay no court fees.
Termination and statutory severance pay
Terminating an employee without fault requires advance notice of at least one pay period and severance pay scaled to length of service under the Labour Protection Act, with the highest rate for employees of 20 years or more. Unused annual leave must also be paid out, along with any other compensation under the contract or work rules.
Unfair termination — for example, dismissing employees for filing a joint claim — can lead the Labour Court to order additional damages for unfair termination. Employers should keep systematic records of warnings and performance reviews before deciding to dismiss, to reduce litigation risk.
Work rules and employer obligations
Employers with ten or more employees must issue written work rules and communicate them to staff. The rules must cover working days and hours, holidays, leave, discipline and penalties, and grievance procedures. Failing to issue work rules is an offence under the law.
Beyond work rules, employers must comply with several related laws: social security, workers' compensation, occupational safety, and personal data protection for employee data. Periodic compliance reviews reduce the risk of complaints or labour inspector findings.
Resolving Labour Disputes
Most labour disputes begin with a complaint to a labour inspector at the Ministry of Labour, who has the power to order an employer to pay outstanding entitlements. If conciliation fails, the case goes to the Labour Court, which follows a faster procedure than ordinary courts and waives certain fees.
Employers should keep systematic records of wage payments, working hours and disciplinary warnings. These records often decide cases; without written evidence, an employer is at a disadvantage even when the facts are on its side.
Severance pay by length of service
When an employer terminates an employee who has committed no fault, the law sets severance pay on a sliding scale by length of service — from 30 days' wages for service of 120 days to under one year, up to 400 days' wages for service of 20 years or more, under the current Labour Protection Act amendments. Employers should calculate from each employee's final wage rate and actual service period.
Beyond severance, the employer must also pay outstanding wages, compensation for unused annual leave, and — where termination takes effect without advance notice — payment in lieu of notice. Unfair termination can lead the Labour Court to award additional damages. Taking advice before deciding to terminate helps assess the true cost of the decision.
What foreign employers and multinational companies must know
Foreign companies employing staff in Thailand must comply with Thai labour law in full, even if the employment contract chooses foreign law. Minimum rights under the Labour Protection Act — severance pay, termination notice and holidays — cannot be contracted out of; any clause granting less than the statutory minimum is void to that extent.
A common misstep is assuming probationary employees can be dismissed without notice. Once employment passes 120 days it counts as indefinite employment, so the employer must give advance notice and pay severance according to length of service. Overtime pay is another trap: employees entitled to it must be paid even where the parties agreed on an all-inclusive salary.
Frequently asked questions
Is severance due if probation fails?
Yes, if the employee has worked 120 days — even during probation — and statutory notice also applies.
What is the maximum statutory severance?
At least 400 days of final wages for employees with 20 or more years of service, under Section 118.
Can a foreign company use a contract governed by foreign law?
Terms below Thai Labour Protection Act minimums have no effect. Employees working in Thailand are always protected by Thai law.
When are work rules required?
Once there are 10 or more employees; Thai-language rules must be issued within 15 days.
Can an employee still sue after receiving full severance?
Yes. An employee may claim unfair dismissal in the Labour Court if the employer lacked reasonable grounds.
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