Labor Disputes in Thailand

Labor disputes often stem from an employee’s feeling that they have been unfairly treated. In such instances, employers should be mindful of labor laws in Thailand that preserve employee rights and help ensure a high standard of employment.

Human Rights Watch research finds that migrant workers in Thai fishing fleets face multiple indicators of forced labor, including deception regarding key terms of employment; refusal to allow change of employer; and abuse by boat owners and brokers.

Misclassification of Employees

If your business is expanding into Thailand, you must correctly classify employees as contractors or full-time workers. Failure to do so can result in hefty fines and penalties. It can also hurt your brand reputation and cause a loss of trust in your remote workforce.

Permanent employees are protected by the Labour Protection Act and enjoy a range of benefits including minimum wage, guaranteed paid time off, and worker’s compensation coverage. Meanwhile, temporary employees are governed by the same employment laws but receive nuanced protections and benefits considering their specific needs in different industries.

While misclassification is not an intentional act, it can happen when employers don’t fully understand how Thai employment laws work. Incorrect classification can also harm your company’s reputation in Asia. For this reason, it’s crucial to take advantage of Acclime’s Employer of Record (EoR) services, which will ensure your team is classified properly and that your business stays compliant with local laws.

Disputes Between Employers and Employees

Terms and conditions of employment, wages, severance pay and relocation issues can all contribute to disputes between employers and employees. For multinational companies with operations in Thailand, these complexities are further compounded by the fact that migrant workers have unique rights under Thai law.

In cases of dispute, both parties must negotiate within three days after a labor demand is filed and the results of negotiations must be submitted to the Labor Department. If settlement is unsuccessful, the matter may be referred to mediation and ultimately, litigation.

Employers must carefully consider the effects of changes to legally protected conditions of employment and take steps to minimize the likelihood of disputes with employees. A special consideration is that terminations and dismissals in Thailand are subject to specific rules, which must be followed in order to avoid legal challenges.

Disputes Between Employers and Contractors

Construction projects in Thailand are multi-tiered with various contractors, subcontractors and suppliers. Payment issues often arise and resulting legal proceedings could result in project delays and costly damages.

Regardless of employment status, all workers in Thailand are governed by the Labor Protection Act that sets various labor standards including working hours and welfare funding. Employers may run into colorable objections from employees should they unilaterally change these conditions of employment.

Although Thai law does not mandate written employment contracts, it is highly advisable for employers to do so in order to ensure clarity and compliance with strict labor regulations. Severance pay is another critical point that should be taken into consideration. It is dependent on length of service and in some instances, such as termination due to business transfer or unjust cause, special severance pay may apply. A professional consultant can assist in drafting such terms to avoid disputes with employees and potential legal liability.

Disputes Between Employers and Guests

The Thailand Civil and Commercial Code outlines several obligations that employers must follow when doing business in the country. Understanding these guidelines can help companies build a harmonious work environment in Thailand and avoid legal complications.

For instance, the minimum wage in Thailand is regulated by the Labor Protection Act. It varies by province and is updated annually. Moreover, the government prohibits employers from firing or laying off workers during the period when the declaration of state of emergency or martial law is in effect.

Moreover, the country abides by multiple international conventions on human rights and a variety of labor laws. These include the International Labour Organization’s core standards on freedom of association and elimination of forced labor. Consequently, any violation of these provisions may lead to severe penalties. Hence, it is important to understand the country’s employment laws before hiring remote workers. This is because it can save companies a lot of money and hassle in the long run.

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