Last month saw very important changes in Thai employment law, namely amendments to the Labour Protection Act. The amendments concern the age of retirement and the use of child labour. The provisions regarding retirement now set a mandatory retirement age for the first time ever in Thailand. In addition, Thailand has also further strengthened its resolve to fight the use of child labour by increasing fines and prison sentences for offenders.
Please find below a summary of the amendments.
Labour Protection Act (No.6) B.E. 2560 (A.D. 2017) – RETIREMENT
- On 31 August 2017, the Labour Protection Act (No.6) B.E. 2560 (A.D. 2017) (“the Act”) was published in the Royal Gazette and came into force on 1 September 2017.
- The Act has been amended to combat the obstacles that retirees countered when they tried to access severance pay.
- For the first time in Thai employment law, the Act sets out a mandatory retirement age that is to be respected by employers. The Act also focuses on the granting of severance pay to retirees.
- In the past, If an employer failed to identify the age of retirement (whether in an employment agreement, work rules, or HR policy), then the employee was expected to carry on working until he/she was unfit to do so. This would lead to voluntarily resignation and this resulted in employees being unable to claim severance pay under Thai law.
- The amendments to the Labour Protection Act have been made to confirm the court’s rulings that retirement is considered as a termination of employment.
- If an employee reaches, a default retirement age of 60 years and there is no retirement age set out by the employer, or the retirement is set out over 60 years of age, then he/she will be able to retire by duly informing the employer of their intention to cease working.
- After a 30-day period, the retirement will become effective and the employee will be entitled to full severance pay in line with the provisions of the Act.
Failure to adhere to the Amendments
- If an employer fails to pay severance pay to an employee, the employer will be fined a maximum of THB 100,000 or imprisoned for a term of six months, or both.
- This amendment to the Labour Protection Act also confirms the cancellation of submission of company’s work rules to the authority as previously announced by the Order of the National Council for Peace and Order No. 21/2560 re: Law Revision for the Ease of Doing Business on 4 April 2017.
- Work rules are still required to be posted physically and easily visible for employees’ access in the workplace; however, publication electronically will suffice.
- The National Wage Committee will set out minimum wages depending on the type of businesses or occupations in each area.
Labour Protection Act (No.5) B.E. 2560 (A.D. 2017) – CHILD LABOUR PROTECTION
- On 24 January 2017, the Labour Protection Act (No.5) B.E. 2560 (A.D. 2017) was published in the Royal Gazette and came into force on 23 February 2017.
- The first Labour Protection Act was enacted in 1998 with the aim of combatting the use of child labour. The Act imposed a term of imprisonment not exceeding one year or a fine not exceeding THB 200,000, or both.
- The penalties enshrined in the 1998 Act seemed to be too lenient when considering the severe nature of the offence. With this in mind, the Ministry of Labour campaigned for a change in the law governing the use of child labour.
- The rationale behind the introduction of the new regulation is to effectively combat the use of child labour and put a stop to this abhorrent practice. The use of child labour is thankfully diminishing; however, the need for strict legislation is needed to combat any recurrence of this dreadful practice.
- The amendment introduces fines of between THB 400,000 and THB 800,000 for each child that is being used for work purposes or a term of imprisonment not exceeding one year, or both.
The information provided in this email is for information purposes only and is not intended to constitute legal advice. Legal advice should be obtained from qualified legal counsel for all specific situations.