When a dispute between an employer and an employee in Thailand can’t be settled informally, either party may consider taking the matter to court. Under the Labor Court Establishment and Procedure Act (1979) (the “Act”), Thailand has established a special Labor Court and procedure specifically for resolving employment-related disputes.
The Labor Court has jurisdiction over disputes involving:
A. Employment contracts.
B. Wrongful acts between employers and employees in connection with a labor dispute, or with the performance of work under an employment agreement.
C. Appeals against a decision of a member of the Labor Relations Committee or the Minister of the Interior (where A or B above was first submitted to the Committee or Minister, rather than directly to the Labor Court).
By far the most common case filed in the Labor Court is brought by an employee against a former employer. Under Thai law, assuming the employee hasn’t committed what the law considers a wrongful act against the employer, the potential remedies available include:
- Unpaid salary for work time completed. If an employer fails to pay an outstanding amount within seven days of the due date without reasonable cause, interest accrues at 15%, compounded every seven days thereafter.
- Unpaid holiday pay. If the employer terminates the contract, or the employee resigns, the employer must pay out any unpaid wages for accrued annual leave at the time of termination.
- Payment in lieu of notice. The employer must give the employee notice of intent to terminate before or at the time of a payment cycle, for that notice to take legal effect at the following payment date. If the employer wants the employee to stop working immediately instead, they may do so as long as the employee is paid wages through the end of that notice period.
- Severance pay. Compensation paid to an employee terminated without legal cause, scaled by length of employment:
| Duration of Employment | Severance Pay (equivalent to wages for this many days) |
|---|---|
| 120 days – under 1 year | 30 |
| 1 – under 3 years | 90 |
| 3 – under 6 years | 180 |
| 6 – under 10 years | 240 |
| 10 years or more | 300 |
- Unfair dismissal compensation. Beyond the rights above, an employee who believes their termination was unfair may also ask the Labor Court to award this additional remedy under the Act.
The Act doesn’t explicitly define what qualifies as an “unfair” termination, but the following Labor Court decisions — both granting and denying this remedy — are instructive.
Cases where the Labor Court DID grant the unfair termination remedy:
a. An employee’s husband worked for a competing company.
b. A technician’s professional license expired and the employer fired him — but he proved several colleagues’ licenses had also expired, and only he was terminated.
c. An employer’s annual profit declined compared to previous years (though the employer remained profitable), and the employer terminated employees to cut costs.
d. An employee gambled outside working hours; the employer’s own work regulations specified a wage reduction as the penalty, but the employer terminated the employee anyway.
e. An employer changed an employee’s employment terms without their consent.
f. An employer caused, or failed to remedy, a hostile work environment for the employee.
g. An employer terminated an employee for refusing to accept reduced compensation.
Cases where the Labor Court did NOT grant the unfair termination remedy:
a. The employee did not pass the employment probation period.
b. Termination followed mandatory retirement under the employer’s official work regulations.
c. The employer was unprofitable for several years, attempted various remedial measures (including voluntary resignation programs) without success, and ultimately terminated employees to save the business.