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Asia employment law bulletin 2020

Thailand

In the disruptive era where technology and society are evolving faster than business, the Thai government has been striving to keep up with the changes through its many legislative reforms. Various changes have been and continue to be made in many areas to support entrepreneurs as well as to reap the benefits of the fast-changing business landscape. For example, changes are underway to further facilitate e-commerce and to allow businesses to interact with and obtain official documents from government agencies via electronic means. At the same time, there are now discussions on how the government could better collect taxes from e-entrepreneurs.

Another major change is the introduction of Thailand’s Personal Data Protection Act (PDPA). This is an important new law which aims to afford better consumer protection in the age of disruptive technology. At the same time, it will inevitably affect employer-employee relationships in Thailand. Enacted in May 2019, the PDPA contains significant new requirements for employers which collect employees’ personal information. Although most sections of the PDPA will become effective in May 2020, employers should be aware of their duties and liabilities and prepare themselves for the change.

In the area of labour law, significant changes were also made under the labour protection law in 2019, which further improved the welfare and benefits of employees. However, it is clear that those changes are a product of several years of efforts by various groups and organisations to raise the bar of labour welfare in Thailand, rather than an attempt to modernise Thai labour law in keeping with disruptive technology.  Below are some of the noteworthy changes. 

Increased severance payment

Statutory severance pay was previously capped at 300 days’ wages for employees who have worked for an uninterrupted period of 10 years or more. Effective from 5 May 2019, those who have been employed for 20 years or more at the time of termination will now be entitled to 400 days’ wages at their most recent rate of pay - a substantial increase of 33% from the previous rate.

Increased maternity leave benefits

Employers must now grant pregnant employees 98 days’ maternity leave (which was previously capped at 90 days). This is inclusive of scheduled weekly holidays, public holidays and annual holidays. In addition, maternity leave is now defined to include leave which is taken for pre-natal examinations before delivery.

Employee’s consent is required for change of employer

Effective from 5 May 2019, where there is a change of employer, the employer must obtain consent from the employees who will be transferred to the new employer. This change also applies to situations where an employer changes as a result of a transfer of functions or staff from one company to another as well as where there is a registered merger between the employer and another company which results in a new entity. Following the transfer, the new employer will assume all the rights and responsibilities owed to the transferred employees by the previous employer.

Workplace relocation notification

Also effective from 5 May 2019, if an employer wishes to change an employee’s current workplace to a new establishment or to another of its existing work locations, the employer has a duty to post an announcement which clearly states which employees will be relocated and the scheduled date of the relocation, at the current workplace, for a continuous period of at least 30 days, in advance of the relocation.

If an employee does not wish to relocate to the new place of business, such employee must inform the employer in writing within 30 days of the date of the announcement or the date of relocation. In such a case, the employee is entitled to severance pay calculated at the normal rate.

It can be seen that, with the increased benefits granted to employees under the new labour protection law, employers now face greater challenges. One would expect that, in the current economic conditions and in the era of disruption, the Thai government would look to how it can provide greater support and assistance to employers in the jurisdiction. However, it seems that the current approach of the legislature is to provide businesses with that help through other measures rather than through amendments to Thai labour law.  Accordingly, we are not aware of, or foresee any significant changes to Thai labour law in the next 12 months. 

Stephen Bennett, Hunton Andrews Kurth

Wipanan Prasompluem, Hunton Andrews Kurth