The school I'm working at have now decided that part of the yearly pay increase is dependant on how many sick days you have taken. We are allowed ten paid sick days a year . They now say that for everyone of these you take that our pay increase will be reduced . Whilst I think this is totally unfair . penalizing people for being sick , I was just wondering about the legality of all this in Thai law . Someone said it was illegal . Anybody know about this ?

I doubt that it is illegal. I don't know that employers are under any obligation to give an annual pay raise.

It can work this way in government. My wife is entitled to 30 days a year, but the "performance pay" = which can be up to 6% a year, can be affected, if too many sick days are taken. A committee of the academics get together and determine increases among themselves. So I don't think this decision would be considered illegal.