LABOUR PROTECTION

In August 1998, the Labour Protection Act (1998) went into effect. It applies to all businesses wit at least one employee. Under the law, employers who disregard the law are subject to fines ranging from 5,000 baht to 200,000 baht and imprisonment of up to one year. Domestic workers (household staff) are not included in the definition of “employee” and are not  covered by the labour Act. All other employees, whether full or part time, seasonal causal, occasional or contract, are covered.
 

IMPORTANT PROTECTIONS CONTAINED IN THE NEW LAW

Work hours and holidays: The maximum number of work hours for non-hazardous work is eight hours a day or 48 hours a week in total. In some types of work as stipulated by law, the employer and the employee may agree to  arrange the period of working hours, but it still must not exceed 48 hours a week. Hazardous work may not exceed seven hours a day, or 42 hours per week.

Employees are  entitled to no fewer than 13 national holidays a year, and a minimum of six days of annual vacation after working consecutively for one full year. Employees have the choice of whether they wish to work overtime or on holidays. A female employee is entitled to maternity leave for a period of 90 days including holidays, but the number of paid leave shall not exceed 45 days.

All employees are entitled to a daily rest period of at least one hour after working five consecutive hours. The employer and the employee may arrange the daily rest period to be shorter than one hour at each time, but it must not be less than one hour a day in total. A weekly holiday of at least one day a week at intervals of a six-day period must be arranged by the employer.

For work performed in excess of the maximum number or working hours fixed either by law or by specific agreement (if the latter is lower), employees must be paid overtime compensation. The rates for overtime vary and range  from 1-1/2 times to three times the normal hourly wage rate for the actual overtime worked. The maximum  number of overtime working hours is limited to not  more than 36 hours a week.

The minimum at for employment is 15 years, and workers below the age of 18 are banned from dangerous and hazardous jobs. They are also prohibited  from working overtime, on holidays, or between the hours of 10 p.m. and six  a.m. Pregnant employees are also prohibited from working overtime, on holidays, or between the hours of 10 p.m. and 6 a.m.

Sick Leave: Employees can  take as many days of sick leave as necessary, but if an employee takes three months of sick leave, the employer is required to pay only one month’s wages.

Severance Pay: Employees who have worked more than 120 days, but less than one year, are entitled to 30 days severance pay. For personnel employed between one and three years, the severance pay is not less than 90 days pay. Employees with three to six years of service will receive six months salary, those with more than six to 10 years service will receive eight months salary, and employees with more than 10 years service will receive 10 months salary.

Termination of employment: Conditions for termination of employment are also laid out in the Act, and a code govern unfair practices and unfair dismissals, which often are the result of the failure to follow correct legal procedures. Employee Associations and Labour Unions must be registered at the Labour Department, and require a license for operation. Finally, a Labour Court specially settles employment disputes. If an employment contract does not specify  any duration, either party can terminate the contract by giving notice at or before any time of payment, to have effect in the next pay period.

Employee Welfare Fund: For companies with a least 10 employees that do not have a provident fund, an Employee Welfare Fund will be established to compensate employees who resign, are laid off, or die in service. Employers and employees will be required to contribute to this fund.

NOTE: Implementation of this fund will be delayed until the economy improves.

In addition to these provision, there are restrictions on the kind of work that women and children can perform. Guidelines are set for wages and overtime, as well as resolution of  labour-management disputes. Employers are required to pay workers compensation if an employee suffers injury, sickness or death in the course of work.

Thai law also requires employers to provide welfare facilities, including medical and sanitary facilities.
 

WORKSMEN'S COMPENSATION

The Compensation Act prescribes that an employer must provide the necessary compensation benefits for employees who suffer injury or illness or who die  as a result or in the performance of their work at the rates prescribed by law.

The compensation benefits can be grouped into four categories: The compensation amount, the medical expenses, work rehabilitation expenses, and funeral expenses.

The payment of compensation benefits is made in accordance with the criteria and rates  prescribed by law depending on the seriousness of the case. In general, the compensation amount must be paid monthly at the rate of 60 percent of the monthly wages of the employee but not lower than 2,000 baht and not exceeding 9,000 baht a month.

Actual and necessary medical expenses must be paid but not exceeding 35,000 baht for normal cases and 50,000 baht for serious injury.

The work rehabilitation expenses must be paid as necessary according to the criteria procedures and rates prescribed by law but not exceeding 20,000 baht.

In the  case of death, funeral expenses will be paid at a maximum amount equal to 100 times of the minimum daily wage rate prescribed by law.
 

MINIMUN WAGES

These regulations apply to all businesses and rates depend largely on the location of the workplace. The minimum wages per day effective January  1, 1998 are:

162 baht for Bangkok, Nakhon Pathom, Nonta Buri, Pathum Thani, Phket, Samut Prakan and Samut Sakhon.

140 baht for Chonburi, Chiang Mai, Nakhon Ratchsima, Phangnga and Ranong

130 baht for all other areas.
 

SOCIAL SECURITY

The Social Security Act requires that all employers with 10 or more employees to withhold social security contributions from the monthly wages of each employee. The prescribed rates to the monthly wages are:

• From Jan. 1, 1999 to Dec. 31, 1999: two percent
• From Jan. 1, 2000 to Dec. 31, 2000: three percent
• From Jan. 1, 2001 onward : 4.5 percent

The maximum monthly wage base on which the rates are applied must not exceed 15,000 baht. The employer is required to match the contribution from the employee. Both contributions must be remitted to the Social Security Office within the 15th day of the following month.

Employees with social security registration may file claims for compensation in case of injury or illness, disability or  death which is not due to the performance of their work, and for cases of child delivery, child welfare, old age pension and unemployment.
 

LABOUR MANAGMENT

In general, Thai labour laws provide for considerable freedom in managing labour, and unions are not very effective. Further, the government doesn’t interfere with a company’s retrenchment policies when economic conditions necessitate cutbacks. There is no “first in, last out “requirement in Thailand.

Similarly, Thai employers have the right to transfer employees to other work locations, provided the transfer is not ordered with the exclusive intent to create hardship on them. Refuse to transfer is legal cause for dismissal.
 

EMPLOYEE RECORDS

A employer with 10 or more regular employees is required to establish written rules and regulations in Thai language government work performance. The regulations must be display on the work premises within 15 days of the date from which the number of employees reached 10 or more.

An employer with 10 or more regular employees is also required to maintain an employees register in Thai language with documents pertaining to the payment of wages, overtime holiday work etc.