The National Legislative Assembly passed amendments to the Labor Protection Act on 13th December 2018, which is expected to take effect in May 2019, 30 days following its promulgation. These aim to fortify protections afforded to employees, provide further improvements to working conditions, and enforce penalties on employers who fail to comply with the requirements stipulated in the Act. The primary changes to the Act are summarized below:
Statutory Severance Pay
Amendments to the Labor Protection Act stipulate that employees who have worked in the same company for an uninterrupted period of more than 20 years are entitled to statutory severance pay worth 400 days’ wages, an increase from the original 300 days.
Employers are required to grant pregnant employees 98 days of maternity leave, which should include scheduled personal holidays, public holidays, as well as time off for pre-natal examinations. Under the Act, employees on maternity leave are entitled to 45 days’ wages throughout the duration of their time off.
Prior to the amendments, the Act did not specify the criteria for a business leave and often left it to employers to decide under what circumstances they would grant business leaves, how many days employees are entitled to, and whether or not they receive pay during business leaves. Through the amendments, the Act now mandates at least three days of paid business leave per year; though, the criteria for business leaves still remains largely ambiguous and may be left to the discretion of the employer.
Notification of Workplace Relocation
According to the Act’s amendments, employers with the intention of relocating their workplace are required to make a conspicuous announcement at their present workplace at least 30 days prior to the date of relocation. If an employee deems that the relocation will adversely affect their way of life or that of their family members, and therefore declines to relocate to the new workplace, they must advise the employer within 30 days of the relocation announcement in order to be entitled to severance pay.
Consenting to Changing Employers
In the event that an employer changes, whether as a result of a merger, transfer of staff from one entity to another, or any other reason, the employer is required to attain consent from the employees who will be transferred. Following the transfer, the new employer will assume all rights and responsibilities that employees are entitled to.
Temporary Suspension of Business
If, for any reason except force majeure, an employer suspends business operations, whether wholly or temporarily, they must pay employees at least 75% of their daily wages throughout the duration of the suspension. The Act states that payment should be made at the at the employee’s workplace; however, if payment is to be made elsewhere, they must obtain consent from employees.
Employers are required to pay 15% interest on payments owed to employees in the event that they default on wages without advance notice or during times when business operations are temporarily ceased. This also applies to overtime payments, payments for working on holidays, and working overtime during holidays; as well as severance payments.
Paying Wages in Place of Advance Notice for Termination
Employers may immediately terminate an indefinite employment contract without notification if they opt to fully pay wages owed to the employee in question. The wages must be paid on the date of termination.
The Act also addresses issues regarding gender parity, mandating that wages, overtime payments, payments for work conducted on holidays, and overtime payments for work conducted on holidays must be calculated and paid at the same rate for male and female employees who hold the same type of work and responsibilities.
As previously mentioned, the amendments to the Labor Protection Act will take effect in May 2019; and employers who fail to comply with the provisions set forth by the Act will incur severe legal and financial penalties. In order to avoid these sanctions, it is paramount that an employer’s labor practices are congruent with current regulations.
To discuss how your company can prepare for the upcoming provisions, or if you have any other inquiries regarding Thailand’s labor law regulations, please contact Silk Legal, which has given counsel to a number of international corporations on this matter.
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