Labour Disputes are controversies that may arise between employers and their employees regarding the terms and conditions of employment, such as standard working hours, wages and fringe benefits. In Thailand, the rights and obligations of both employers and employees are set forth in the Labour Protection Act of 1998, which defines the scope of mutual commitments and protects the law-abiding party against the wrongdoings of the other party.
In early 2017, the Thai Cabinet approved an amendment to the Labour Protection Act of 1998, which entitles retirees to a statutory severance pay and set the statutory retirement age at 60, or Proposed Default Retirement Age, unless otherwise expressly indicated in the employer’s internal policy.
Further amendments came into force under the Labour Protection Act in mid-2019, with the aim of expanding employee rights and providing greater clarity on previously ambiguous provisions. Key changes emerging from the amendments include:
✓ Clarifications on the entitlement of paid business leave days for employees;
✓ Clarifications on an employee’s obligation to pay wages during a temporary suspension of business;
✓ An extension of maternity leave and an expansion of its definition under the Labour Protection Act;
✓ Rights and obligations of employees and employers in the event that an employer relocates the business;
✓ An increase in the cap of severance pay for an employee who works for an uninterrupted period of 25 years;
✓ Clarifications on payment in lieu of advance notice; and
✓ An addition of 15% interest on the amount due where an employer defaults on payments owed to an employee under the Labour Protection Act.
We at Mahanakorn Partners Group provide legal defense in every instance of labour disputes, including but not limited to:
- Employment agreements
- Minimum wage rates
- Working hours and overtime pay
- Severance pay
- Wrongful dismissal
- Notice periods
- Statutory holidays
- Maternity leave
- Warnings
The parties in a labour dispute are generally advised to reach a compromise. Failure to do so would prompt the labour court to proceed with a trial. The labour court will reach a verdict by weighing many factors, among them: mutual contractual rights and obligations; work environment; cost of living and wage rate; benefits in kind; employee’s hardship; status of the employer’s business; and economic and social conditions, to name a few. During the course of the trial, the labour court will consider all of the evidence to ensure fairness to both parties.