Thailand:Labor protection

February 1 2010 Categories: Doing Business In Thailand, Thailand Business No comments yet

How well are Thai employees protected in Thailand?

Yes they are well protected by the Labor Protection Act (1998) that applies to all businesses with at least one employee and which provide sanctions for employers who disregard the law.

The Labor Protection Act has been recently amended and the new amended act has been enforced in 28 May 2008. The new Act contains provision to protect indirect or outsourced workers and to empower the Courts to order an amendment of employment contracts, work rules, regulations or orders that are not fair.

Note: that Labor Courts are efficient and quick and whenever the law or the case is unclear they tend to favor the protection of the Employees.

Is there a maximum number of working hours?

Yes, the maximum number of hours is eight hours a day or 48 hours a week for non-hazardous work or seven hours a day, or 42 hours per week for hazardous work.

The employee and employer may arrange the working hour’s period but it still must not exceed 48 hours a week.

Employees may choose whether they wish to work overtime or on holidays but they must be compensated if they do. Rates for overtime vary and range from 1-1/2 times to three times the normal wage rate depending whether overtimes is on a normal working day or on a holiday day. Overtime may not exceed 36 hours per week.

The Employer must arrange for daily rest periods of at least one hour after working five consecutive hours or if the Employee agrees it may be shorter than one hour each time, but it must not be less than one hour a day.

A weekly holiday of at least one day a week at intervals of a six-day period must be arranged by the employer.

How many holidays or vacations days do employees have right?

Your employees are entitled to a minimum of 13 national holidays a year and a minimum of six days of annual vacation after working for one full year.

Do you have to pay a maternity leave if your Employee is pregnant?

While the paid leave may not exceed 45 days maternity it may be extended by the employee up to 90 days including holidays (the additional period is non-paid leave).

Note that when an employee is pregnant you cannot have her working overtime, on holidays, or between the hours of 10 p.m. and 6 a.m.

How many days of sick leave may your employees take?

They may take as many sick leave as they whishes (do not worried they do not abuse). The employer is liable to paid for up to 30 days sick leave per year.

They do not need to provide medical certificate for sick leave of less than 3 days. If an employee is sick for a long period (3 months) the employer is obliged to pay only the first month of sick leave.

Do you have to pay Severance Pay if you terminate an employee agreement?

Any employee that has worked more than 120 days is entitled to a severance pay.

If the employee works less than a year, the employee is entitled to 30 days severance pay. Employee that have been working between one and three years, are entitled to 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.

Note that if you want to terminate an employee you have to give him at least 30 days advance notice, and you must give the advance notice before paying the salary if you want it to be effective for the next month. You may choose to pay the advance notice.

You may dismiss an employee without severance pay or advance notice if you have a qualified cause to do so but be careful not to unfairly dismiss an employee.

Be careful as well to respect the forms of dismissal. Because you may be right about the cause of termination but you may lose with the labor Court for not having followed formal termination requirement.

What are Thai social security’s requirements?

Since 2002, every employer must be registered with the Social Security Office of the Ministry of Labor and Social Welfare, and contribute to the Social Security Fund and the Workmen’s Compensation Fund. All types of business entity (including Thailand branches and representative offices of foreign companies) are covered by this law.

The normal contribution rates are as follows:

The employer and the employees were required to contribute 10% (5% each) of the employee’s monthly wage to the Social Security Office.

The contribution per employee is normally, capped at 1,500 THB per month as the Social Security is calculated on a maximum salary of 15,000 THB. The part of the salary from 15,001 and over is not yet subjected to social security.

As a result of the economical crisis social security’s and until end of December 2009 social contributions have been cut to 6% (3% for the employer and 3% for the employee).For the time being and until end of December the cap for social contributions is reduced to 900 THB.

The Social Security Contribution must be made within the 15th of the following month.

Note: This post is an excerpt of Rene Philippe Dubout next book: “How to Invest Safely Into Thailand” to be published in January 2010

About the Author:

The author Rene-Philippe DUBOUT is a lawyer since 1990 when he was admitted to Geneva bar (Switzerland). He practiced as a litigator there for 10 years until he moved to Thailand in 1999. In 2002 he founded with a group of Thai lawyers Rene Philippe & Partners Ltd a local law firm that specialized in Cross Borders Investments and Real Estate. He has been lecturing in several Thai Universities and a speaker to numerous conferences and seminars. He is the author of a must read book:”How to Purchase Real Estate Offshore Safely: The Case of Thailand”.

http//:www.renephilippe.com

Originally posted 2009-08-06 03:09:51.

Doing Business in Thailand