BUSINESS

Employers beware: The Labour Protection Act

gets serious
PUBLISHED : 4 FEB 2019 AT 12:16 WRITER: PIMVIMOL (JUNE) VIPAMANEERUT, PARTNER IN TILLEKE & GIBBINS'
BANGKOK

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Thailand's labour laws have long been known for the strength of
protections afforded to employees. Continuing this trend, a slew of new
amendments to the Labour Protection Act (LPA), passed on December 13,
2018, will further enhance worker protection, improve working
conditions, and impose sanctions on employers who fail to uphold them.

The updates to Thailand's labour law will come into effect 30 days after its
publication in the Government Gazette, which is expected to be in early
2019. The key changes are summarised below:

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 New category of statutory severance pay

A new category of entitlement for statutory severance pay has been added
for employees who have worked for an uninterrupted period of 20 years or
more. Statutory severance pay is currently capped at the equivalent of 300
days' wages for employees who have worked for an uninterrupted period
of 10 years or more. However, those who have been employed for 20 years
or more at the time of termination will now be entitled to the equivalent of
400 days at their most recent rate of pay--a massive increase of 33%.

Increased maternity Leave

Employers must grant pregnant employees 98 days of maternity leave--an

increase of eight (8) days from the previous law. This is inclusive of days
the employee's scheduled weekly holidays, public holidays, and annual
holidays. In addition, maternity leave is now defined to also include leave
which is taken for pre-natal examinations before the delivery. The
employer must pay up to 45 days' wages during the maternity leave
period.

Paid necessary business leave

Necessary business leave (that is, leave to carry out necessary business) is
recognised under the current Labour Protection Act, and is at the
discretion of employers to stipulate the criteria for such leave in its work
rules. Nonetheless, the Act is silent on many key details including the
number of necessary business leave days an employee is entitled to, and
whether the leave will be with or without pay. The new law rectifies this,
stating that employers must now grant employees a minimum of three (3)
days of paid necessary business leave per year. However, "necessary
business" itself remains undefined, leaving scope for further ambiguity.
While some circumstances may qualify--notably when an employee's
physical attendance somewhere is required by the government--there are
others that may be unclear and the interpretation in such cases will
remain at the discretion of employers and its policies.

RELATED

Workplace relocation notification

If an employer relocates an employee's current workplace to a new

establishment, or to another of its existing work locations, the employer
has a duty to post a conspicuous announcement at the current workplace,
for a continuous period of at least 30 days, in advance of the relocation.
The announcement must clearly state which employees will be relocated,
and the scheduled date of the relocation. If an employee thinks that the
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 of his or her family, and therefore does not wish to relocate to the new
place of business, such employee must inform the employer in writing
within 30 days of the date of the announcement, or the date of relocation.
In this case, the employee is entitled to severance pay calculated at the
normal rate.

Consent required for change of employer

Where there is a change of employer, including where an employer

changes as a result of a transfer of functions or staff from one juristic
person to another, and where a registered merger between the employer
and another juristic person results in a new entity, the employer must
obtain consent from the employees who will be transferred. The new
employer will assume all the rights and responsibilities owed to the
transferred employees by the previous employer.

75% wages payable during suspension of business

Where it is necessary for an employer to temporarily suspend business, in

part or in whole, for any reason other than force majeure, the employer
must pay the employee at least 75 percent of his or her usually daily wages
throughout the suspension period. Such payment shall be made at the
place of work of the employee. If the payment is to be made elsewhere, or
by other means, consent of the employee must be obtained.

Interest on statutory payments

If an employer defaults on payments owed to employees for wages in lieu

of advance notice, wages during temporary cessation of the employer's
operations, or other payments due to an employee under the Labour
Protection Act, they must pay interest on the default amount at 15% per
annum.

Payment in lieu of notice required on date of termination

Under Thai labour law, an employer may terminate an indefinite term

employment contract immediately, without notifying the employee at least
one payment cycle in advance, by paying wages in lieu of advance notice.
The amendment clarifies a previous ambiguity in this requirement, by
stating the payment must be paid to the employee on the termination date.

Gender equality

Employers must pay wages, overtime payments, payments for working on

holidays, and payments for working overtime on holidays, at the same rate
for both male and female employees who undertake work of the same
nature, quality, and quantity, or work of the same value, at an equal rate.
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 Sanctions

Several penalties for employers that fail to comply with the provisions in
the Labour Protection Act have also been amended to extend them to
cover the new amendments.

These new amendments range from the procedural, such as notification

requirements for changing employment circumstances, to the financially
substantial, such as the dramatic increase to severance pay for long-
serving staff. However, both categories are designed with employee
protection firmly in mind, and the burden to comply is firmly on
employers. Failure to comply could result in severe penalties, and it is
therefore vital for employers to thoroughly review their employment
agreements and work rules to ensure that they comply with the new rules
when they come into effect.

Author: Pimvimol "June" Vipamaneerut, Partner, Tilleke &

Gibbins. Please send comments to Andrew Stoutley at
andrew.s@tilleke.com.

Series Editor: Christopher F. Bruton, Executive Director,

Dataconsult Ltd, chris@dataconsult.co.th. Dataconsult's
Thailand Regional Forum provides seminars and extensive
documentation to update business on future trends in Thailand
and in the Mekong Region.

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Keywords employer employee labour protection severance pay

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