Probation is a common practice in employment contracts worldwide, serving as a trial period for both employers and employees to assess compatibility before committing to a long-term working relationship. In Thailand, while probationary periods are widely used, they are not explicitly mandated under labor law. However, understanding the nuances of probation in Thailand is crucial for both employers and employees to ensure compliance with the law and to avoid unnecessary legal complications.
What is a Probationary Period?
A probationary period is an agreed-upon timeframe at the beginning of an employment contract during which an employer evaluates an employee’s performance, skills, and cultural fit within the organization. At the same time, the employee has the opportunity to assess whether the company meets their expectations.
While Thai labor law does not require employers to impose a probationary period, it is a standard practice in most organizations. The terms and conditions of this period should be clearly outlined in the employment contract.
How Long is the Probation Period in Thailand?
Thai labor law does not specify a minimum duration for a probationary period, but in practice, it is usually set at a maximum of 119 days. This is a strategic decision by employers to avoid triggering severance pay obligations, which come into effect on the 120th day of employment.
If an employee continues working beyond the 119th day, they are entitled to severance pay if terminated, as stipulated in Section 118 of the Thai Labour Protection Act (LPA) B.E. 2541 (1998). Employers often set probationary periods close to this limit to maximize the evaluation period without incurring additional financial liabilities.
Employee Rights During Probation
Despite being on probation, employees in Thailand are entitled to the same rights and protections as regular employees. Under Section 5 of the LPA, any person who works in exchange for wages is classified as an employee, meaning probationary employees enjoy the same legal protections as their permanent counterparts.
Key entitlements during the probation period include:
- Sick Leave: Probationary employees are entitled to paid sick leave in the same way as permanent employees.
- Public Holidays: Employees are entitled to at least 13 public holidays per year, regardless of their probationary status.
- Annual Leave: Employees who have worked for less than one year may receive annual leave on a pro-rata basis. If leave is not granted during probation, it must be made available after completing the period.
- Overtime Pay: If a probationary employee works beyond standard working hours, they are entitled to overtime pay, just like permanent employees.
Ending the Probationary Period: What Happens Next?
At the end of the probation period, one of the following outcomes is expected:
- Confirmation of Employment: If the employee meets performance expectations, they transition into a permanent role.
- Termination: If performance is unsatisfactory, the employer may choose to terminate the contract.
Termination Rules During Probation
While probation allows employers to assess new hires, dismissing an employee is not always straightforward.
- No Notice Period Requirement: If an employee is terminated before the 120th day, the employer is not required to provide severance pay.
- Notice for Termination: While Thai law does not mandate a formal notice period during probation, it is common practice to inform employees in advance.
- Severance Pay Obligation: If an employee has worked 120 days or more, they are entitled to severance pay, calculated as at least 30 days’ wages.
Extending the Probationary Period – Is It Allowed?
Employers may wish to extend the probationary period if they need more time to assess an employee’s suitability. However, this comes with legal risks.
- Legally, probation cannot be extended beyond 119 days without triggering severance pay and termination notice obligations.
- Some employers attempt to psychologically extend probation by setting new performance benchmarks or unofficial trial extensions, but this does not change the legal obligation to pay severance if the employment extends past 119 days.
Resigning During Probation
Employees are free to resign at any time during their probationary period, and Thai labor law does not require them to serve a notice period. However, it is common for employment contracts to include mutually agreed-upon notice terms to allow for a smooth transition.
Key Takeaways for Employers
If you are an employer hiring in Thailand, understanding probation rules is essential to protect your business and ensure compliance with Thai labor laws:
- Limit the probationary period to 119 days to avoid severance pay obligations.
- Clearly define probation criteria in the employment contract, including performance expectations and assessment methods.
- Monitor employee performance closely to make informed decisions before the 119-day period ends.
- Ensure documentation of any performance issues to safeguard against claims of unfair dismissal.
- Provide fair employment terms to probationary employees, respecting their rights to leave, pay, and benefits.
Conclusion
While probation in Thailand is not legally required, it is widely practiced and serves as a crucial evaluation tool for both employers and employees. By understanding Thai labor laws, companies can avoid legal pitfalls, and employees can ensure they are receiving their rightful entitlements.
Employers should use the probationary period wisely to assess performance while ensuring compliance with labor protections. Meanwhile, employees should take this time to prove their capabilities while evaluating if the company is the right fit for them.
A well-managed probationary period lays the foundation for a successful and productive employment relationship in Thailand.