New Labour Protection Law to be Effective in 2019

04
March
2019

The Thai Labour Protection Act, B.E. 2541 (1998) (“LPA”) has previously been revised from time to time. Under the current regime, the government strives to promote stronger protection for employees at large. In September 2018, the Draft Amendments to the LPA (the “Draft Amendments”) was proposed to the National Legislative Assembly (the “NLA”) for consideration. Later on 13 December 2018, the NLA deliberated the Draft Amendments on the third reading and decided to approve the Draft Amendments as a law. As of now, the approved Draft Amendments is awaiting publication in the Royal Gazette upon which it will become effective as a law.

The Draft Amendments set out regulations related to labour protection in favour of employees and some of which will affect the business operators financially to some extent. We set out the comparison of the current provisions of the LPA against the approved amendments for the more significant issues in the table below:

Current Labour Protection Act, (The Labour Protection Act, 2541 (1998), as amended in 2560 (2017)) The Draft Amendments
Business Leave
An employee is entitled to business leave only when it is specified in the work rules and regulations of the workplace. In addition, under the current LPA, an employer is not required to pay an employee on business leave. An employer is required to grant business leave to an employee at least 3 working days per year. In addition, an employer is required to pay an employee for a maximum of 3 working days on business leave.
Maternity Leave
A pregnant employee is entitled to maternity leave for a maximum of 90 days for each pregnancy. An employer must fully pay wage to a pregnant employee for a maximum of 45 days on maternity leave. Maternity leave for each pregnancy has increased to 98 days. In addition, maternity leave definition includes leave for prenatal care. Same as the current LPA, an employer must fully pay wage to a pregnant employee for a maximum of 45 days on maternity leave.
Temporary suspension of business
In the case that an employer suspends his/her business operation, whether wholly or partly, the employer is required to pay wage to an employee for a minimum of 75% of wage of normal working days that an employee receives before the suspension for the entire period of suspension. However, the place and time for paying wage during temporary suspension of business is not set out. An employer is required to pay wage during temporary suspension of business at an employee’s workplace or other places consented by an employee. Additionally, the wage during temporary suspension of business must be paid at least once a month.
Relocation of business

In the case that an employer relocates his/her place of business, the employer is required to notify an employee at least 30 days before the relocation date.

The Draft Amendments set out the method for notifying an employee of the relocation of business as follows:

  • Advance notification of not less than 30 days to an employee;
  • The notification must be posted, openly, at the place of business; and
  • The notification must contain enough information about the relocation.

An employee is entitled to refuse to work at the new location:

  • A notification of refusal to work at the new location, in writing, shall be sent to the employer within 30 days after the date of the notification of relocation of business.
  • In the case that an employee refuses to work, his/her employment is considered terminated and he/she is entitled to special severance pay.

The employer shall pay special severance pay to the employee refusing to work at the new location within 7 days after the employment is terminated.

Default interest an employer is obliged to pay to an employee when he/she fails to make payments

An employer is subject to pay interest at the rate of 15% per annum to an employee in the case that the employer fails to:

  • Pay back a security in money;
  • Pay wage, overtime pay, holiday pay, and overtime in holiday pay;
  • Pay severance pay; or
  • Pay special severance pay in lieu of notice or severance pay.

More default events are stipulated in the Draft Amendments:

  • Employer is obliged to pay money in case of termination without giving an advance notice to an employee.
  • Employer is obliged to pay money in the case of temporary suspension of business.
Payment in lieu of advance notice

Under the current LPA, for termination of an indefinite employment agreement, an employer is required to give an advance notice to an employee.

If an employer immediately terminates an employee under an indefinite employment agreement, the employer must make payment in lieu of advance notice.

If the employer terminates an employee under an indefinite employment agreement, the employer shall make payment in lieu of advance notice to an employee in amount equal to the wage from the termination date until the effective date. The payment shall be paid to an employee at the date of termination.

Severance pay

An employer shall pay severance pay to an employee who works for an uninterrupted period of 10 years or more than at least 300 days.

The Draft Amendments increased the cap of severance pay to 400 days for an employee who works for an uninterrupted period of 20 years or more.

The Draft Amendments will affect employers in terms of imposing more burden on employers. Once the Draft Amendments become effective, employers must prepare themselves to revise their workplace rules and regulations to be in accordance with the rights of the employees specified in the Draft Amendments.

If you have any questions or require any additional information, please contact Threenuch Bunruangthaworn, Archaree Suppakrucha, Panwadi Maniwat or the ZICO Law partner you usually deal with.


This alert is for general information only and is not a substitute for legal advice.