The legal impact of work rules or policy on an employer’s obligations to pay a bonus

Although employers in Thailand are not required to give bonuses to employees, bonuses are a strategic tool for employers to manage their employees. A company’s work rules or policies on annual bonuses may include things such as conditions for being eligible to receive bonuses, the timing of bonuses, and the employer determining bonus amounts at its discretion. Even if the employer makes employees aware that they are eligible to receive a certain amount as a bonus, actually receiving the bonus remains contingent upon employees meeting the conditions set out by the employer.

Keywords: Mazars, Thailand, Legal, Supreme Court, Policy, Bonus, Employee  

Courts also take into account a company’s work rules or policies on bonuses which have been communicated to employees. For example, in Supreme Court Ruling No. 3755/2533, the employer stipulated that, “Employees will receive a bonus if they are still employees at the time bonuses are paid. If employment has been terminated before the deadline for paying bonuses, they will not be entitled to receive a bonus.” The Supreme Court ruled that employees whose employment had been terminated before the date on which bonuses were to be paid were not eligible to receive a bonus.  

In contrast, in Supreme Court ruling No. 3373/2547, the employer had a policy stating, “Year-end bonus: In the event that your employment is not terminated due to your own actions, the company will pay you one month’s salary or in accordance with your employment rate during the calendar year ending on December 31”. The Supreme Court pointed out that the policy stated that the bonus would not be paid only if employment was terminated due to the employee’s own actions. Therefore, the company was obligated to pay a bonus, even if it had incurred financial losses.  

The precedents set by these Supreme Court rulings underscore the importance of carefully reviewing and establishing clear work rules or policies related to paying bonuses. Failure to do so can impact an employer’s right to determine the conditions for paying them.