Labour disputes typically arise when one party—often the employee—feels unfairly treated, for reasons that may stretch far beyond the law, and consequently he or she will feel entitled to restitution. Thailand’s labour laws encompass several safeguards that help employers meet a standard of fairness when dealing with dissatisfied or aggrieved employees.
By upholding high moral standards and treating employees fairly, these practices will foster good morale, encourage productivity, and boost employee retention rates. Reviewing and understanding these rules is an important first step in providing a fair and enjoyable workplace for employees. Below is a summary of some of the issues that may give rise to resentment, misunderstanding, or other labour-related disputes.
Remuneration and benefits
Compensation is a fundamental issue that is responsible for inciting many labour disputes. At the very least, employers must always be aware of the latest minimum wage. In Thailand, the latest minimum wage levels took effect on January 1, 2020. The current minimum wage varies by province on a sliding scale ranging from THB 313 to THB 336 per day. Compared to the previous minimum wage, this represents an increase of THB 6 for nine provinces and THB 5 for the remaining provinces.
Employers should also be aware of various requirements and obligations when terminating employees without cause. One of these obligations is the disbursement of severance pay. Severance pay in Thailand is calculated based on the length of an outgoing employee’s service to the employer, and it is important to stay on top of the required rates, because these entitlements may change when the related laws are amended. For example, last year’s amendments to the Labour Protection Act (LPA) increased the amount of severance pay to 400 days’ wages for employees who have completed 20 years of service or more.
Leave and holidays
Employers should also be fully aware of all holiday and leave entitlements. As for public holidays, employers in Thailand must allow their employees to take at least 13 publicly recognised holidays, in addition to their weekly holiday entitlement of at least one day per week. Many employers choose to grant more than the minimum requirement of 13 public holidays, which can help boost workforce morale. Employers should also be aware that the government sometimes announces additional public holidays during the year, and when this occurs, each business owner must decide how to handle the additional holiday.
Employees are also entitled to other types of leave, such as sick leave for days on which they are actually sick, but are only entitled to paid sick leave for 30 working days per year. Other allowances are maternity leave of up to 98 days (45 paid), inclusive of holidays, for pre-natal examinations before the delivery and for giving birth; necessary business leave of at least three days per year with pay, and more.
IP ownership rules for employers and employees
Misunderstandings over the ownership of intellectual property (IP) generated by employees can also be a source of conflict, so this should be clearly delineated in employment agreements so that both parties understand their rights and obligations in compliance with relevant laws.
This ownership is addressed differently from one piece of Thai IP legislation to the next.
For copyrighted work, such as drawings, photographs, or computer software, the Copyright Act assigns ownership of the copyright to the employee who creates the work, unless the employer and employee have agreed otherwise in writing. However, when a company hires a third party to create a copyrightable work, the copyright belongs to the employer unless the parties have agreed otherwise.
For inventions and designs, this situation is reversed. The Patent Act gives the employer the right to patent an invention or design developed by an employee within the scope of his or her employment, unless the employment agreement itself (not a separate agreement) says otherwise. However, the employee is still entitled to be named as the inventor and to receive special remuneration if the employer benefits from the invention.
For trade secrets and trademarks, the Trade Secret Act and the Trademark Act do not address ownership of trade secrets and trademarks created by employees. Thus, employers should make it clear with employees in writing that any trade secrets and trademarks created by employees during their employment belong to employers.
Unfair labour practices
Thailand’s Labour Relations Act also defines specific “unfair labour practices” that violate employees’ right to participate in unions. The term on its own may sometimes alarm employers, but it is also misunderstood. Unfair labour practices are actually defined in fairly narrow terms, encompassing three general categories of conduct: (1) retaliation (e.g., termination for labour union involvement), (2) wrongful pressure (e.g., forcing an employee to resign for union activity), and (3) termination while employees are under collective bargaining agreements, except in certain cases of egregious misconduct or extenuating circumstances.
Unfair labour practices should be reported to the Labour Relations Committee within 60 days of the violation. If the committee finds that an unfair labour practice occurred, it may order reinstatement. This can be appealed to the labour court, which might revoke the committee’s order or require compensation instead of reinstatement.
Designing the right employment policies and procedures
Understanding the standards set out by Thai labour law will enable responsible employers to formulate suitable employment policies for their specific situation. Companies in Thailand will usually provide some combination of policies and procedures that serve to meet the requirements, with some going beyond the minimum standards set out by law. Finding the correct balance can help to keep a company’s workforce satisfied and avoid the penalties and tension that may be aggravated by feelings of unfair treatment in the workplace.
Authors: Pimvimol (June) Vipamaneerut, partner and head of Tilleke & Gibbins’ non-contentious employment practice; Piyawat Kayasit, attorney-at-law in Tilleke & Gibbins’ intellectual property practice; and Chusert Supasitthumrong, partner in Tilleke & Gibbins’ Dispute Resolution Department. Please send any comments or questions about the content of this article 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.