Monthly Archives: August 2014

LABOR LAW IN THAILAND: PART 10 – The Employees Compensation Act

The Employees Compensation Act (the “Act”) requires an employer with one employee or more to register employees (with the exception of certain categories of employees such as government officials and teachers at private schools) with the Employees Compensation Fund (the “Fund”) at the Social Security Office. The purpose of the Fund is to compensate employees — or their estate — for lost wages in the event of the employee’s employment-related injury, illness, or death, as well as for such an employee’s, medical treatment and rehabilitation, or funeral costs.

Employers must contribute to the Fund by the end of January of every year at rates, which depend on the type of employer’s business and nature of the employee’s work. The contribution rates range from 0.2% to 1% of the employee’s total annual pay. However, where an employee’s salary exceeds Thai Baht 240,000 yearly, the base salary of that employee — for purposes of the requisite Fund contribution calculation — will be capped at Thai Baht 240,000. If an employer fails to make any required contribution to the Fund, that employer will be required to pay the outstanding contribution amount — as well as an additional penalty amount equal 3% of the unpaid contribution per month of the deficiency.

An employee’s eligibility for payment of compensation benefits is determined by the criteria detailed under the Act and if eligible, paid to such an employee at rates prescribed by the Act, which depend largely on the seriousness of the case. Most commonly, the compensation will be paid monthly at the rate of 60% of the employee’s monthly wages for a specific duration to an employee who is: unable to work continuously for more than three days; has lost an organ; becomes disabled such that they cannot preform their work; or who dies.

Where medical treatment is required as a result of a covered employee’s work, then such an employee’s “actual and necessary” curative expenses will be paid for by Fund up to Thai Baht 45,000 for a “normal case” and up to Thai Baht 65,000 for a “serious injury”. Furthermore, and if applicable, an employee may also be eligible to receive compensation for curative rehabilitation expenses, but not exceeding Thai Baht 20,000.

It should be noted, however, that certain exceptions to an employer’s obligations and an employee’s eligibility to compensation under the Act apply where an employee is injured due to the employee’s fault.

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DUENSING KIPPEN is a multi-service law firm specializing in all Thailand inbound investment transactional matters, as well as, dispute resolution by litigation proceedings and international arbitration. DUENISING KIPPEN is the only firm in Thailand whose attorneys include three MCIArb internationally certified arbitrators. And, as a member of the International Alliance of Law Firms, with 63 member firms and 100 offices in 45 countries, DUENSING KIPPEN is able to provide its clients with high-quality cost effective legal services worldwide. DUENSING KIPPEN can be reached at: contact@duensingkippen.com or for more information visit them at: duensingkippen.com

 

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LABOR LAW IN THAILAND: PART 9 – The Social Security Act

The Social Security Act (the “Act”) requires employers, employees and the government to contribute the Social Security Fund (the “Fund”). The purpose of the Fund is to insure employees against costs incurred by: non-work related injury; illness; invalidity; death; maternity; child support; retirement pension; or unemployment.

Employees between the ages of fifteen and sixty are required to be insured under the Act. However, some employees — such as: government officials; employees of foreign governments or international organizations; employees working in foreign countries for Thai companies; teachers at private schools; and students or nurse students who work for schools, universities or hospitals, are specifically excluded from coverage under the Act.

The Act requires all relvant employers to submit a statement specifying the name of each insured employee, their wage, and any other details to the Social Security Office within thirty days from the date when the employee becomes insured. If the employment is terminated, the employer must notify the Social Security Office within the fifteenth day of the month following the month of which the termination occurrs. Any employer who does not submit the said statement or notification, or who submits false statements, is subject to imprisonment for a term not exceeding six months or a fine not exceeding Thai Baht 20,000 or both.

All relevant employers must also deduct Fund contributions from the wages of covered employees (currently, at the rate of 5% of such wages — but not less than Thai Baht 83 and not exceeding Thai Baht 750 per month). The employer must then also match this amount from the employer’s own funds for each such covered employee and then pay the total combined amount to the Social Security Office within the fifteenth day of the month following the month of each such deduction and submit a statement (in a required format) detailing the payments of all such contributions. If an employer fails to comply with the Act and pay the Fund within the specified time, that employer will be liable to pay the outstanding Fund contributions and a penalty equal to 2% of such outstanding contributions per month of such deficiency.

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DUENSING KIPPEN is a multi-service law firm specializing in all Thailand inbound investment transactional matters, as well as, dispute resolution by litigation proceedings and international arbitration. DUENISING KIPPEN is the only firm in Thailand whose attorneys include three MCIArb internationally certified arbitrators. And, as a member of the International Alliance of Law Firms, with 63 member firms and 100 offices in 45 countries, DUENSING KIPPEN is able to provide its clients with high quality cost effective legal services worldwide. DUENSING KIPPEN can be reached at: contact@duensingkippen.com or for more information visit them at: duensingkippen.com

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LABOR LAW IN THAILAND: PART 8 – The Labor Protection Act: employees committee

The major legislation governing labor protection law in Thailand is the Labor Protection Act (the “LPA”). The LPA prescribes labor protection standards applicable to both employers and employees working in Thailand. However, the LPA does not apply to Government and State Enterprise employees.

In our last article, we described the “Work Rules” which an employer is required to provide and pointed out that this requirement is triggered when the employer’s total number of employees reaches ten or more. But that is not the only legal obligation triggered by the size of an employer’s work force. Once an employer employs fifty or more employees, an “Employees Committee” must be established.

Employees Committee members are entitled to hold their position for a term of three years. The minimum required number of members of the Employees Committee depends on the total number of the employees as follows:

Number of the Employees Employee Committee Members
50 – 100 5
100 – 200 7
200 – 400 9
400 – 800 11
800 – 1,500 13
1,500 – 2,500 15
more than 2,500 17 – 21

Employers must arrange for a meeting with the Employees Committee at least once every three months, or when more than half of the total of all Employees Committee so request, or whenever otherwise “appropriately requested,” in order to:

(a) provide welfare for an employee(s);

(b) hold discussions regarding any Work Rule(s);

(c) consider a complaint(s) of an employee(s); or

(d) compromise a dispute(s).

Significantly, if any action of the employer is perceived to be to be unfair to an employee(s), the Employees Committee has the right to file a claim the Labor Court on behalf of the employee(s).

Note: any employer who violates or fails to comply with the LPA may be punished according to the level of his or her offence with a fine of Thai Baht 5,000 to Thai Baht 200,000, or imprisonment of up to one year, or both.

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DUENSING KIPPEN is a multi-service law firm specializing in all Thailand inbound investment transactional matters, as well as, dispute resolution by litigation proceedings and international arbitration. DUENISING KIPPEN is the only firm in Thailand whose attorneys include three MCIArb internationally certified arbitrators. And, as a member of the International Alliance of Law Firms, with 63 member firms and 100 offices in 45 countries, DUENSING KIPPEN is able to provide its clients with high quality cost effective legal services worldwide. DUENSING KIPPEN can be reached at: contact@duensingkippen.com or for more information visit them at: duensingkippen.com

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LABOR LAW IN THAILAND: PART 7 – The Labor Protection Act: work rules

The major legislation governing labor protection law in Thailand is the Labor Protection Act (the “LPA”). The LPA prescribes labor protection standards applicable to both employers and employees working in Thailand. However, the LPA does not apply to Government and State Enterprise employees.

Once an employer employs ten or more employees, that employer must provide “Work Rules”. These Work Rules must be provided in the Thai language and they and must be announced and in force within fifteen days of the employer’s labor force reaching ten or more employees. And the employer must submit the Work Rules — as well as any later amendment to the Works Rules — to the Department of Labor Protection and Welfare within seven days of the Work Rules coming into force.

The employer’s Work Rules may contain any legally permissible conditions of employment. However, at a minimum, the Work Rules must include details of the following particulars:

  • regular working hours and breaks;
  • work holidays and the rules for taking holidays;
  • rules concerning overtime work and work on holidays;
  • the date and place of payment of wages, overtime pay, holiday pay and holiday overtime pay;
  • leave and rules for taking leave;
  • terms and procedure for employee discipline and punishment for employment misconduct by the employee;
  • the procedure for the submission and consideration and settlement of complaints regarding employment conditions or issues by an employee to the employer;
  • protections afforded to any such complaining employee; and
  • the procedure and terms for termination of employment, severance pay, and special severance pay, if any.

The employer must distribute the Work Rules to all employees and post them in a conspicuous position at the work place. In the event that the employer less than ten employees at some later time, the Work Rules must remain in effect.

Note: any employer who violates or fails to comply with the LPA may be punished according to the level of his or her offence with a fine of Thai Baht 5,000 to Thai Baht 200,000, or imprisonment of up to one year, or both.

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DUENSING KIPPEN is a multi-service law firm specializing in all Thailand inbound investment transactional matters, as well as, dispute resolution by litigation proceedings and international arbitration. DUENISING KIPPEN is the only firm in Thailand whose attorneys include three MCIArb internationally certified arbitrators. And, as a member of the International Alliance of Law Firms, with 63 member firms and 100 offices in 45 countries, DUENSING KIPPEN is able to provide its clients with high quality cost effective legal services worldwide. DUENSING KIPPEN can be reached at: contact@duensingkippen.com or for more information visit them at: duensingkippen.com

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