CHAPTER
9
LABOUR
Thailand has no consolidated code of
labour law. The most important single Act in this area is the Labour Protection
Act (1999). However, the Civil and Commercial Code contains certain provisions
that apply to labour law, and there are also several other Acts and regulations
that are relevant, including the Labour Courts Act, the Labour Relations Act,
regulations issued under the Factory Act, the Social Security Acts, the
Workmen’s Compensation Act, and the Provident Fund Acts.
The Labour Protection Act (1998) The Labour Protection Act came into force on August 19, 1998.
Who is an ‘employer’? The Act does not apply to central or local Government entities or state
enterprises, and thus civil servants are denied the protection of the Act.
Employees in certain other categories, including those in agriculture,
fisheries, the conveying or loading of goods for seagoing vessels, home workers
and those in other categories as prescribed by regulations, are subject to
other forms of employment protection outside the Act. The Act applies to all
other employees, as defined.
Note also that a business is also
deemed to be an ‘employer’ if it sub-contracts the provision of work and
payment of wages to another entity. Such an employer must also provide the
employees (of the contractual employer) with the same protection measures as
the employees’ contractual employer.
Hours of work Normal working hours must not exceed those imposed by regulations. In
any event, they must not exceed 8 hours a day, or 48 hours per week. For work
that may endanger the life or health of employees, the normal hours must not
exceed seven hours per day and the weekly hours must not exceed 42. An employee
is entitled to a break of one hour but not more than two hours, after five
hours of work, unless otherwise agreed.
Minimum
wages Under
the LPA, the Minister of Labor has power to issue regulations imposing minimum
daily wage rates for employees. These are fixed on a province by province basis
(Thailand has 76 provinces or changwat) and
are reviewed annually. The rates apply to all categories of employees, except
for those in certain excluded industries namely: agriculture including
cultivation, fisheries, forestry, livestock farming, and other industries as
prescribed in regulations. The rates are based on a day's work, assessed as
follows:
1. a seven hour day, for work
that is likely to be dangerous to health or physically dangerous, as defined in
regulations.
2. an eight hour day for
industrial work or work in transport.
3. a nine hour day for work in
commerce, or other work not included in (1) or (2) above.
Where the normal working hours of an employee exceed
those referred to above, then the minimum wage applicable must be increased
proportionately, unless the employee receives overtime pay in accordance with
regulations. An employer is obligated to pay the minimum wage applicable, and
violation is an offence punishable by imprisonment or a fine. The minimum wages
applicable as at 1 January 2006, range from 140 to 184
Baht per day, depending on the province in which the employer's business is
located.
Draft Wages Bill In 2006 a draft Wages Bill
was issued for public consultation. Its main provisions are as follows:
1.
The criteria for
annual wage adjustments taking into account: existing wage rates, earnings
indices, inflation, living standards, production costs, prices, business
capability, labour productivity, gross national
product, and the economic and social state of each locality.
2.
Basic minimum
wage rates;
3.
Minimum wage
rates which will apply to businesses, occupations or localities as specified.
If no minimum wage rate has been prescribed in any locality, the basic minimum
wage rate is deemed to be the minimum wage rate of the locality; and
4.
Assessed wage
rates based on skill, knowledge, ability, potential, experience or success at
each career level.
5.
Minimum hourly
wage rates for part time employees, which will apply to businesses, occupations
or localities as specified.
Duties
imposed under the Act are enforceable by fines or imprisonment.
Overtime An employer may not compel an employee to work overtime, and an
employee’s consent to work overtime is required. Overtime hours must not exceed
the number stipulated by the Ministry of Labour. Certain categories of employee
are not entitled to overtime pay. Employees who work in administration,
management, trade, services, manufacturing and related fields are not entitled
to overtime wages if they work more than 8 hours per day, provided that the
total hours worked do not exceed 48 hours per week.
Work during holidays An employer cannot compel an employee to work on a holiday; except where:
the nature or description of the work requires that it is continuous and a
stoppage would damage the work, or the work is of an emergency nature. In such
cases, the employer may instruct the employees to work during a holiday to the
extent that it is necessary.
Rest periods Employees are entitled to one hour’s rest after five hours of work.
Weekly holiday Employees are entitled to one day’s holiday per week, and the interval
between holidays must not exceed six days.
Traditional holidays An employee is entitled to paid holiday on the
13 traditional holidays that occur every year, including National Labour Day.
Annual leave An employee who works continuously for one year is entitled to six
days’ paid annual leave. Annual leave can be postponed or accumulated.
Sick leave An employee may take sick leave for so long as
the illness lasts. A medical certificate can be required by the employer after
three days absence. The employer is obliged to pay wages during sick leave for
up to 30 days sick leave per year. Where absence is due to work related
sickness or injury, or maternity leave, this does not count as absence through
illness.
Home workers Under a regulation passed in 2004, where work is performed by an
employee at home, this is subject to more detailed regulation, including an
obligation for the contract of employment to be in writing and to be registered
at the Ministry of Labour.
Work stoppages Where a work stoppage occurs affecting the
whole or part of a business, an employer is bound to pay 50% of the wages that
the employee would have earned, had the stoppage not occurred.
Deductions from wages An employer is not entitled to make any deductions from wages, overtime
pay, holiday pay or overtime holiday pay, except on the following grounds:
(1)
For income tax and other deductions required by law.
(2)
Trade union dues.
(3)
Payments of debts due to a savings cooperative or debts in the nature of
welfare benefits beneficial to the employee, and with his consent.
(4)
As security for his work, or as security against loss whilst working, or monies
required to make good any losses to the employer caused by the employee’s
intentional acts or gross negligence, with the employee’s consent.
(5)
Agreed contributions to provident or pension funds.
The deductions made under each of
(2) (3) (4) and (5) must not exceed 10%, and in aggregate must not exceed 20%,
of the wages due for that period, without the employee’s consent.
Sex discrimination, harassment,
maternity rights, child labor The Act imposes various special duties in relation to sex
discrimination, harassment, maternity and child labour:
2. No employer, supervisor or
inspector may sexually harass female or juvenile employees.
3. Women are disqualified from
working in mining, in construction work underground, or working on scaffolding
higher than 10
metres above the ground, or in the production or transportation of explosive or
inflammable
materials.
4. Women carrying out executive,
technical, administrative, financial or accounting work are exempted from the
restrictions on
overtime work.
5. Pregnant employees may not be
compelled to work between 10 pm and 6 am, work overtime, work
with machinery
or vibrating machinery, drive a vehicle or be on a vehicle,
carry objects weighing more than 15 kilos, work on
boats, or engage in other work, as prescribed by
regulations.
6. Pregnant employees are entitled to
90 days maternity leave, of which 45 days must be paid leave. They may also
request a change of their duties on medical grounds.
Pregnancy is not a legitimate reason for dismissal.
7. A child under 15 years may not be
employed under any circumstances. The employment of children aged 15 to
18 must be
reported to the Labour Inspection Officer, and records must be kept of their
conditions of employment.
They must not
work from 10 p.m. to 6 a.m. without ministerial authority. They may not work in
a list of specified
hazardous employments.
Reasons for dismissal Where an employer dismisses an employee for a permitted statutory reason,
that is a reason that exempts the employer from paying a severance payment,
then the reasons for such dismissal must be stated in the dismissal notice. If
the reasons are not so stated, then the employer will be estopped from raising
them as a defence in any proceedings subsequently brought by the employee.
Notice period No notice need be given where a fixed term contract terminates on its
expiry. For a periodical contract, notice must be given on or before the wages
payment date, to expire upon the next payment date. Payment may be given in
lieu of notice. No notice need be given where dismissal is for permitted cause.
Dismissal for cause The Act sets out the grounds on which an employer may dismiss an
employee without notice and without having to make a severance payment:
2. Intentionally causing the employer
to suffer loss.
3. Acting negligently causing the
employer to suffer loss.
4. Violating the work rules and
regulations or violating the fair and lawful rues of the employer, having been
warned by the employer in writing save for serious violations, where a warning
is not necessary. A written warning is valid for a period of no more than one
year from the date the misconduct is committed.
5. Being absent from duties for three
consecutive days without reasonable justification and with or without holidays
in between.
6. Being sentenced to imprisonment by
a final court judgment except for offences of negligence or petty offences.
Liability for severance pay Where an employee is dismissed without permitted statutory cause as
above, then the employee is entitled to severance pay at specified rates, as
follows:
|
Period of Employment |
Severance Pay Due |
|
Exceeding
120 days but less than 1 year |
30
days’ pay |
|
Exceeding
1 year but less than 3 years |
90
days’ pay |
|
Exceeding
3 years but less than 6 years |
180
days’ pay |
|
Exceeding
6 years but less than 10 years |
240
days’ pay |
|
10
years employment or more |
300
days’ pay |
No liability for severance pay No severance pay is due:
2. where the
work is periodic in nature and with a fixed term or ending on its completion or
seasonal work and the employment is performed during that season
and in each case, the employment was
for a fixed period of not more than two years, and agreed to in writing by both
parties when the contract was made.
Unfair dismissal Under the Labour Courts Act, if in the opinion of the Labour Court has
power to order the reinstatement of the employee at the same wage rate that
previously applied. If the court decides that the parties cannot work together,
then the court will assess the employee’s losses taking into account his age,
length of service, hardship at the time of dismissal, the reasons for the
dismissal and the compensation that the employee is entitled to receive
In trying a case of dismissal or
other labour case, the Labour Court must take into account the conditions of
work, the cost of living, the hardship of the employee, wages rates or the
rights or benefits of employees working in the same type of business, the
status of the business and general economic and social conditions, in order to
be fair to both parties.
Appeals from the judgments of the
Labour Court are made direct to the Supreme Court.
Dismissal due to restructuring or
modernization If dismissal occurs due to
restructuring of the business or change in the machinery or technology, then 60
days advance notice of dismissal must be given to the employees and to the
Labour Inspection Office. If not, then 60 days special compensation is payable
to an employee. In addition, dismissed employees with over six years service
are entitled to special compensation of 15 days pay for each year of service,
subject to a maximum payment of 360 days pay.
Date for payment Any wages, overtime pay, holiday pay and overtime holiday pay due, must
be paid to the employee within three days of dismissal.
Payment for unused annual leave Where the employer and employee have agreed to accumulate and postpone
annual leave that has accrued in one year to any subsequent years, then the
employer must pay money for the accumulated leave to laid off employees, and
also pay an amount in respect of pro-rated annual leave for the unused leave
not taken at the date of termination.
Welfare provisions The Act also contains a number of provisions relating to the welfare of
employees:
Welfare committee All employers with a workforce exceeding 50 employees must establish a
Welfare Committee. The Welfare Committee must be composed of at least five
elected members, and the employer must meet the Committee at least once every
three months, or whenever at least 50% of the Committee or a trade union
requests a meeting. The duties of the Committee will be to discuss the
provisions or management of the employees’ welfare with the employer, and to
make proposals on welfare to the Committee on Labour Welfare (a Government
organization).
Work rules All employers with ten or more employees must prepare, display at the
workplace, and file at the Ministry of Labour, its Work Rules. These Rules must
set out the terms and conditions of employment, including any complaints
procedure, and other matters.
Employees’ register All employers with more than ten employees must maintain an Employees’
Register, containing prescribed information including the employees’ names,
position held, wages paid, and other information, and such Register must be
retained for two years after the termination of employment of any employee.
Provident fund Any business which employs at least ten employees and which does not
yet have a registered provident fund or pension or retirement fund, must now join the compulsory provident fund which will
be set up by the Ministry of Labour. This fund will provide benefits to
employees on their retirement at the end of employment, upon death during
employment, or in other cases to be set out in regulations. Employers and
employees will be obliged to make equal contributions to the Fund, in
accordance with a scale of contributions to be fixed by the Ministry (not
exceeding 5% of wages). An employee (or his estate upon death) will be entitled
to receive the total of the employer’s contributions, the employee’s
contributions, and the benefits accrued from those contributions.
Priority of debts in insolvency or
otherwise Under the general law, a
preferential creditor has rights against the property of his debtor in priority
to ordinary or deferred creditors. Under the Act, an employee or the Department
of Labour is granted the status of a preferential creditor over all the
property of the employer, if the debt owed arises from failure to pay wages,
overtime pay, holiday pay, overtime on holiday pay,
severance pay, special compensation, employees’ contributions, employers’
contributions or surcharge. An employee’s status as a creditor will be the same
as that of the Revenue Department or relevant Government department for unpaid
taxes.
Transfer of employment Where employees are transferred, whether on the sale or transfer of a
business or otherwise, the new employer is obliged to accept all the rights and
obligations of the former employer, in relation to the transferred employees.
The employees’ existing rights against the former employer will survive.
Change of location of employer Where there is a change of location of the workplace, which affects the
normal life of an employee or his family, then the employer must give 30 days’
advance notice of such change of location to its employees, or pay special
compensation in lieu of such notice. An employee who does not wish to work at
the new location may terminate his contract of employment, and claim special
compensation at a rate which is not less than 50% of the statutory severance
payment due.
Enforcement To enforce obligations under the Act, an employee may bring a complaint
to the Labour Inspection Office, alleging that an employer has not complied
with any provision of the Act. A Labour Department Inspector will investigate
the complaint, and issue a ruling within 60 days of the complaint being made.
Either the employee or the employer may appeal to the Labour Court, if he is
dissatisfied with the decision of the Inspector.
Alternatively, an employee may issue
proceedings in the Labour Court, claiming a severance payment, damages for
unfair dismissal, unpaid wages, unpaid holiday pay, etc. There is also a scale
of fines or imprisonment for violations of certain sections of the Act.
Non-compliance with an order made by an Inspector is also an offence.
Workmen's compensation. Under the Workmen’s Compensation
Act, employees who are injured or become ill or die during the normal course of
their employment, are entitled to medical, disability and/or death benefits in
accordance with a compensation schedule. The amount of compensation is usually
small, when compared to that paid industrialized nations. Employers with twenty
or more employees in most parts of the country must pay a percentage of their
workers salaries into a compensation fund, which in turn pays benefits in
appropriate cases.
Health and safety The Labour Protection Act contains a provision whereby the Ministry of
Labour is granted delegated powers to formulate and issue regulations for the
health and safety of employees. Many such regulations have been issued, usually
applicable to only one particular industry or type of employment.
Social security All employers are liable to participate in the
social security scheme, regardless of the number of employees. Employers,
employees and the government itself contribute to a social welfare fund. This
fund will pay benefits to workers and their families in cases of death, injury,
disability or maternity leave.
Labour relations The Labour Relations Act (1975) sets out a comprehensive framework of
rules for employees and employers to negotiate labour disputes. The Act also
provides for the registration of trade unions, trade union federations,
employers’ associations and employers’ federations. Employees who engage in
trade union activities may not be disciplined or dismissed for such activities.
Generally speaking, trade unions are not very active in Thailand.
Revised 1 December 2006