Labour Regulations

All other employees, whether full or part time, seasonal, casual, occasional or contract employed, are covered.

Important protection regulations contained in the new law are:

• Work Hours and Holidays
  The maximum number of hours for non-hazardous work is 8 hours a day or 48 hours a week in total. For 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 7 hours a day or 42 hours per week. Employees are entitled to no fewer than 13 national holidays a year and a minimum of 6 days of annual vacation after working consecutively for 1 full year. Employees have the choice of whether they wish to work overtime or on holidays. female employees are entitled to maternity leave for a period of 90 days including holidays, but paid leave shall not exceed 45 days.
  
  All employees are entitled to a daily rest period of at least 1 hour after working 5 consecutive hours. The employer and the employee may arrange the daily rest period to be shorter than 1 hour at each time, but it must not be less than 1 hour a day in total. A weekly holiday of at least 1 day per 6 day working 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 to 3 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.

• Minimum Age for Employment
  The minimum age for employment is 15 years. 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 6 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 3 months of sick leave, the employer is required to pay only 1 month’s wages.

• Severance Pay
  Employees who have worked more than 120 days, but less than 1 year, are entitled to 30 days severance pay. For employee employed between 1 and 3 years, the severance pay is not less than 90 days' pay. Employees with 3 to 6 years of service will receive 6 months salary, those with more than 6 to 10 years service will receive 8 months salary, and employees with more than 10 years of service will receive 10 months salary as Severance Payment.

• Termination of Employment
  Conditions for termination of employment are also laid out in the Act and a code governs 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 specifically 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
  In companies with at least 10 employees which do not have a provident fund, an Employee Welfare Fund will compensate employees who resign, are laid off, or die in service. Employers and employees will be required to contribute to this fund.

In addition to these provisions, there are restrictions on the kind of work 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 compensation if employees suffer injury, sickness or death in the course of work.

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

Workers 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 be law.

The compensation benefits can be grouped into 4 categories:

• The compensation benefits;

• the medical expenses;

• the work rehabilitation expenses;

• the funeral expenses.

The payment of compensation benefits must be 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 injuries.

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 must be paid at a minimum amount equal to 100 times of the minimum daily wage rate prescribed by law.

Minimum Wages
These regulations apply to all businesses and rates depend on the location of the workplace. The minimum wage per day effective January 1, 1998 is:

• 162 Baht for Bangkok, Nakhon Pathom, Nontaburi, Pathum Thani, Phuket, Samut Prakan and Samut Sakhon;

• 140 Baht for Chonburi, Chiang Mai, Nakhon Ratchasima, Phang-nga and Ranong;

• 130 Baht for all other areas.

Social Security
The Social Security Act requires that all employers with 10 or more employees withhold Social Security contributions from the monthly wages of each employee.

The maximum monthly wage base which the rates are applied to 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 15^th 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.

Legal Implications of Labour Management
In general, Thai labour laws provide for considerable freedom in managing labour. In many countries, it is not legal to discriminate on the basis of age or sex. Perusal of personnel ads in Thai newspapers finds employers narrowly defining their needs, for example: “The successful candidate will be male, under 35 years of age, not a member of a labour union, and at least 150 cm in height, etc.”

Furthermore, the government doesn’t interfere with a company’s retrenchment policiy 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 the employee. Refusal to transfer is a legal cause for dismissal of the employee.

Employee Records
An employer with 10 or more regular employees is required to establish written rules and regulations governing work performance in Thai language. The regulations must be displayed on the work premises within 15 days of the date on which the number of employees has reached 10 or more.

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

Tips on Recruiting and Developing Staff
The ability if a company to attract and retain staff is considerably enhanced by tailoring compensation packages to meet individual employee needs. Increasingly, factors such as work environment, organisational policies, relationships with superiors and career paths influence decisions whether to join a company or to remain with a company. In challenging living environments such as Bangkok, these “quality of life” issues take on even more importance.

Organizing training programs to upgrade skills helps to motivate staff and demonstrates a company’s commitment to its employees. Admission to such programs can be seen both as a reward for good performance and as a part of the total compensation package.

Recruiting technically skilled Manpower
There are two main English language daily newspapers which contain significant numbers of advertisements, both in English and in Thai. Both the Bangkok Post and The Nation boast circulation figures of close to 60,000 copies per day. In addition to these mass market dailies, there is an English-language daily, Business Day, which claims a daily circulation of approximately 10,000 copies. In addition to be able to reach prospective employees through the print editions of these newspapers, it should be noted that the newspapers have Classified Advertisements on-line at their web sites.

Several domestic and international personnel recruitment services operate in Bangkok. In addition to securing personnel, these companies offer services such as advice on issues of organizational structure, labour relations and the cultural implications of managing labour in Thailand.

Developing contracts with educational institutes to identify and court potential candidates as early as possible is also recommended. For firms with ongoing manpower needs, establishing a network of contracts can be especially valuable.

In addition to tailoring compensation packages to individual needs and emphasizing long-term and organizational benefits, high-end technical employees, such as scientists and engineers, need to be given work commensurate with their skills. By allowing them greater challenges and less narrowly defining their role, so that it may include responsibilities in systems design and possibly management, technical personnel will become more productive and is more likely to view themselves as integral to the company as a whole.

Concrete long-term benefits are an effective retention tool. Long-term benefits motivate personnel identify self-interest with company interest. Committing resources to long-term benefits also ensures that companies realize increased production levels from staff as their employees gain experience.

© 2001-2007 SCM International Law Office Ltd.