While Thai labor law is generally fairly flexible for employers, it does contain several specific rules that must be understood. It is important to grasp these rules in order to avoid legal disputes with employees or contractors.
Oftentimes, labor disputes occur when an employee feels he or she is unfairly treated. These disputes can be over issues such as working conditions, salary levels, and other factors.
Misclassification of Employees
Whether you’re hiring local workers or expanding globally, it’s important to classify your employees correctly. Misclassification has serious financial and legal consequences for both you and your workers.
If you’re found to have misclassified an employee, you may be liable for back taxes and fines at the national, state, and local level. Additionally, workers could be owed back wages and benefits.
The law states that employees are entitled to a minimum of 30 days paid sick leave per year. Unused sick leave can be carried over to the next year. Additionally, expectant mothers can take 98 days of paid maternity leave.
Employers must also set out written work rules in the Thai language. These must be submitted to the local labor office and displayed at the company’s place of business. The work rules cover topics such as working days, wage payment, and vacation leave. They must be consulted in cases of dispute.
Termination of Employees
In Thailand, the laws that govern employees’ termination must be followed. This includes not only providing advance notice, but also paying severance pay in line with the employee’s length of service. Maintaining accurate classifications of employees and ensuring that all legal requirements are met protects a company’s operations and promotes fairness in the workplace.
Under the Labour Protection Act, an employer may terminate an employee by serving a written notice at least one pay period before the date of dismissal or paying wages in lieu of the advance notice. A terminated employee has the right to file for wrongful termination.
We can assist in settling a labor dispute by mediating between the parties through settlement, arbitration or litigation. We will provide expert guidance to the client through email, telephone or in person meetings depending on the situation and the goal. We will ensure the dispute is resolved quickly and fairly to both the client and the employee.
Severance Pay
As with all matters relating to the workplace, it is crucial for employers to adhere to strict procedures when terminating employees. Seeking guidance from legal professionals experienced in Thai labor laws can help ensure a swift and compliant termination process.
Severance pay is a form of compensation that companies must offer to employees who are dismissed from their jobs for reasons such as downsizing, restructuring, or business closure. While it may not be sufficient to replace an employee’s lost salary, it is intended to alleviate financial difficulties during the transition period between jobs.
Generally, severance pay must be paid immediately upon the end of employment or shortly thereafter. In addition to monetary compensation, companies may also offer outplacement services to help employees find new positions. Managing termination requirements for a global workforce can be difficult, especially when laws vary between countries. Using a professional employer organization (PEO) can streamline the process and help companies stay compliant with local regulations.
Arbitration
Arbitration is a method of alternative dispute resolution where disputes are settled outside of court. The process can be less expensive than litigation and is usually quicker to complete. It also allows for the privacy of sensitive information to be maintained. This is particularly important for renowned figures or businesses that want to protect their reputations.
In January 2017, a new set of rules came into effect which substantially changes how arbitration is conducted in Thailand. The new rules include a provision to consolidate correlated arbitrations, which can improve efficiency and reduce costs.
The new rules also provide a procedure for challenging an arbitrator. This change is significant as it enables challenges to be brought to the tribunal directly rather than through the courts.
In addition, visa and work permit laws have been relaxed to facilitate foreign arbitrators and those acting as party representatives in arbitration proceedings in Thailand. These new measures can make it easier for foreign lawyers to obtain a “smart” visa and work permit in order to participate in these arbitrations.