Throughout tough times, it is regular practice for companies to adjust by minimizing expenses to endure. Some companies might pick to decrease expenses by reorganising or downsising, which might be followed by moving to a smaller sized workplace with lower rental costs. To move effectively and lawfully, companies need to understand their responsibilities under the Thai Labour Defense Act (LPA).
Under area 120 of the LPA, if a company needs to move their business in a manner that will materially affect the common course of living of workers or their households, the company requires to alert workers not less than 1 month prior to the date of moving of the business.
If any staff member would not like to work for the company at the brand-new business, the staff member is entitled to end their employment agreement with the company within 1 month from the date of invoice of the company’s notification or the date of moving of the company’s business, as the case might be, and the staff member is entitled to get unique severance equivalent to statutory severance under area 118 of the LPA.
The quantity of the company’s statutory severance commitment under area 118 depends upon the length of a staff member’s years of service at the business, which can differ from 1 month to 300 days of last earnings.
Nevertheless, when a company closes a workplace and moves workers to a brand-new workplace, it does not suggest that all kinds of moving will be thought about as “moving” under area 120 of the LPA, which needs the company to pay unique severance to the workers and to adhere to other treatments set out in the LPA.
Integrating Numerous Areas
The Thai Supreme Court has actually ruled that if a company has 2 places and integrates the workplaces by moving its workers to a single area and closing another workplace, the company is not bound to pay unique severance to workers, as this does not make up a moving under area 120.
For instance, if a company has 2 existing workplaces– one in Bangkok and one in Pattaya– and closes one workplace and moves its workers to the staying workplace, this is not a concern of moving and the company is not needed by the LPA to pay unique severance to workers who would not like to relocate to the other workplace.
Neighboring and Remote Movings
In another circumstance, if any company moves their business by closing a present workplace and opening a brand-new workplace, however the area of the brand-new workplace does not materially affect the course of living of the workers or their households, the company is not needed to pay unique severance.
The Thai Supreme Court has actually ruled that if a company moves their business to a brand-new area that is roughly 50 kilometres from the previous workplace or from Bangkok to another province, this moving materially impacts the course of living of the workers and their households. For that reason, the range in between the company’s previous workplace and brand-new workplace is one significant factor to consider.
Moving Notice Treatments
For That Reason, for the moving of a business to be based on area 120 of the LPA, which states particular treatments for the company to follow, consisting of the payment of unique severance to workers, that moving needs to impact the common course of a staff member’s life or that of his/her household. A summary of procedures for a company to follow in such a scenario is as follows:
Initially, the company needs to alert the workers no less than 1 month prior to moving.
2nd, if a staff member picks not to move with the business, that staff member needs to end his/her employment agreement within 1 month of invoice of the company’s moving alert.
Third, the company needs to pay unique severance equivalent to the statutory severance under area 118 of the Labour Defense Act, no behind 7 days after the staff member’s termination of his/her employment agreement.
Severance Payment
If a company stops working to notify their workers 1 month in advance of moving, the company, in addition to paying unique severance under area 120, should likewise pay an extra quantity in lieu of advance notification. This quantity is generally equivalent to roughly one month’s earnings, however can be more sometimes.
If a company stops working to please their unique severance commitment, the staff member can submit a problem with the Labour Well-being Committee within 1 month of the due date of the payment. The staff member needs to initially end his/her agreement pursuant to area 120 prior to the company is needed to pay unique severance and prior to the staff member might submit a problem with the Labour Well-being Committee.
Labour Well-being Committee Orders
If the committee discovers that the staff member is entitled to unique severance, it will provide a composed order to the staff member within 60 days of getting the problem. After getting the order, the company needs to pay the unique severance within 1 month. If the company still stops working to pay the unique severance, the company might deal with criminal charges, with its officers or directors dealing with possible penalty of jail time not going beyond 6 months, or a fine not going beyond THB 100,000, or both. If the committee discovers that the staff member is not entitled to the unique statutory severance, it needs to notify all celebrations in composing.
Within 1 month of getting the committee’s order, either celebration might submit an appeal with the Labour Court. If an appeal is submitted, the company is needed to publish a bond equivalent to the quantity in disagreement. If neither celebration appeals the committee’s order within the 30-day prescription duration, the committee’s order is last.
As the LPA enforces criminal charges, such as jail time and a fine, for noncompliance, any company who picks moving to decrease expenses need to understand the procedures needed under Thai law.
Author: This short article was prepared by Chusert Supasitthumrong, a partner in the Disagreement Resolution Department at Tilleke & & Gibbins. Please send out remarks to Andrew Stoutley at andrew.s@tilleke.com
Series Editor: Christopher F. Bruton is Executive Director of Dataconsult Ltd, chris@dataconsult.co.th Dataconsult’s Thailand Regional Online forum supplies workshops and comprehensive documents to upgrade organization on future patterns in Thailand and in the Mekong Area.
