They set out the rules concerning the trial period, mobility, non-competition, confidentiality and training. Some clauses concern only certain types of jobs. Similarly, these clauses must respect certain drafting guidelines, in terms of content and form, in order to be recognized as valid.

In an employment agreement, clauses must be mentioned at the time of hiring. The employee can thus freely accept or refuse them. The employee’s signature constitutes consent and acceptance of the clauses.

However, some clauses are prohibited when they provide for rules contrary to the articles of the Civil and Commercial Code and certain other Thai texts including the Labor Protection Act of 1998.

Employment agreement: What clauses must be included?

1. Working hours

Your employment contract must define your normal working hours or work patterns, including overtime. The hours of work described in your contract must not violate the Working Time Regulation, 1998. The work week must not exceed 48 hours, averaged over a 17-week period. This right can be withdrawn by signing a written agreement to that effect. The Working Time Regulations 1998 also entitle employees to a minimum daily rest period between each day or shift worked (i.e., 11 hours in a 24-hour period) and a minimum weekly rest period (i.e., 24 hours of uninterrupted time off work each week). Employees are also entitled to a 20-minute unpaid work break after working 6 hours or more.

2. Salary

➤ Details of your salary should be included in your employment agreement, along with the date you will be paid.
➤ Compensation must be determined according to objective and specific criteria that are not solely dependent on the employer.
➤ Thai law imposes a minimum amount of salary.
➤ The agreement of both parties is required in order to modify the amount of the remuneration but also the mode of the latter.
➤ Your contract may also contain information regarding payroll deductions. This clause should describe the circumstances that may arise in which deductions may be made.

3. Vacation entitlement

As an employee, you have a legal right to paid vacation. Your employment agreement must specify the start and end date of the vacation year. It should also describe any periods of the year that are not available for vacation, for example if you work in the hotel industry, the Christmas period may not be available. There is no legal right to take holidays as paid annual leave on certain days. Instead, your contract must confirm whether the holidays are included in your entitlement or whether they are additional.

4. Pension

All employers are subject to automatic enrolment and your contract must specify the details of your pension or pension scheme and the relevant contribution rates. Some employers may wish to refer you to other documents, if they do, the relevant documentation must be referred to in your contract and it must be made available to you.

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5. Confidentiality Clause

In law, there is very limited protection for an employer’s confidential information. As a result, most employment contracts will contain express clauses to protect information obtained about the company during employment. The employee confidentiality agreement obliges the employee to retain certain information that may come to his or her knowledge in the course of employment. It protects the fundamental interests of the company.
Confidential information may relate either to the conduct of a business, including its structure, the identity of its suppliers, its prices, marketing techniques and customer lists, or to the company’s products, including its trade secrets, formulas and manufacturing processes.

In Thailand, Section 420 of the Civil and Commercial Code will apply to employees who disclose or use confidential information without their employer’s permission, in addition to any liability under their employment contract or non-disclosure agreement. This may result in imprisonment and/or a fine of up to two hundred thousand baht for the employee depending on the importance of the information.

6. Exclusivity clause

The exclusivity clause allows the employer to prohibit the employee from engaging in any outside activity, even non-competitive, during the period of performance of the employment contract. It differs from the non-competition clause, which concerns the period after the end of the employment contract. On the other hand, it can only be validly inserted in a part-time employment contract if it is essential to the protection of the legitimate interests of the company, justified by the nature of the task to be performed and proportionate to the aim sought.

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What are restrictive clauses in employment agreement?

Your employer may include a restrictive covenant to protect his business when you leave your position. The types of restrictive covenants you may find are:

1. Non-Compete Clauses

The employee non-compete agreement requires that upon termination of the employment contract, the employee is prohibited from engaging in a competing business for a specified period of time. This clause applies in the event of termination of the employment contract, whether by dismissal, resignation, amicable termination, poaching or otherwise.

A typical clause will define a certain period of time after termination during which it will be in effect, and will generally state that the employee is prohibited from working for a company that competes with the employer or owning stock in a company that competes with the employer. In determining whether a non-competition clause is fair and reasonable, Thai courts consider a number of factors, including the period of restriction, the geographical area of restriction and the extent of the restriction imposed on the employee. As a result, there may be no clear answer to all non-competition clauses, as the circumstances of each case are different and the interpretation of the Thai courts may vary from judge to judge.

For a non-compete clause to be enforceable in Thailand, it must meet a few specific and cumulative conditions determining its validity.

➤ The non-competition clause or a non-competition agreement for employees must be signed between the employee and the employer
➤ The non-competition clause is only applicable if it protects the interests of the company
➤ The non-competition clause must not prevent the employee from finding a new job
➤ The non-competition clause is limited in time. In other words, the prohibition must not be excessive (generally 2 years)
➤ The non-competition clause is limited in space. A precise geographical area must be indicated
➤ The non-competition clause is limited to a certain position
➤ A compensatory indemnity must accompany the non-competition clause

2. Non-Solicitation Clauses

This clause refers to an agreement, usually between an employer and an employee, that prohibits an employee from using the company’s customers, clients or contact lists for personal purposes when leaving the company. The purpose is to prevent ex-employees from contacting customers or clients of their former employer in order to induce them to change their relationship with their former employer.

3. Non-trade clauses

This clause is intended to prevent you from doing business with any of your former employer’s clients or customers.

4. Non-Poaching Clauses

These are designed to prevent you from poaching or employing staff from your former place of employment. These types of clauses may be void because they restrict trade and are therefore against public policy.
However, a company may be able to enforce them if it is found by a court that the covenant is designed to protect the company’s legitimate business interests and is reasonably.

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