The reason I am asking is because my client is the managing director of a company and has a work permit yet the embassy website requires an employment contract. But how is it in practice? 

It can vary from embassy to embassy or official consulate.

It might be accepted and approved without a contract if his position is as a director.

 You can be a Director of a Thai Company without having a work permit.

But you cannot take an active role in the operations outside of the Boardroom basically.