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Thailand – Employment Quarterly Review 2014, Quarter 3.

20 November, 2014

 

Legal News & Analysis – Asia Pacific – Thailand – Labour & Employment

 

Looking Back:

 

April, 2014:

 

Labour Protection Act 2008

 
In 2008, the Labour Protection Act was amended to provide that where a business operator authorizes a person to provide personnel to work (i.e., not a job placement business), and such work is part of the production process or business under the responsibility of the business operator, and whether or not such person will supervise the performance of such work or be responsible for payment of wages to those who do such work, the business operator shall be deemed the employer of those engaged to do such work (§11/1). The law goes on to provide that such business operator must arrange for an employee hired for wages who works in the same manner as an employee under a direct employment contract to, without discrimination, receive fair benefits and welfare. Since the amendment became effective, business operators have felt some uncertainty in how to comply with the requirement to provide fair benefits and welfare, particularly those business operators who make extensive use of outsourcing companies to provide workers. The uncertainty primarily arose from interpretation of the word fair—what would constitute fair benefits and welfare? Must they be equal in every way? What about merely similar? Could higher wages offset lower benefits?

 
In April 2014, the Supreme Court of Thailand, in ruling on a case appealed from the Labour Court, held that a business operator (who is regarded as the employer under section 11/1) must arrange for outsourced workers to receive benefits and welfare that are the same as those received by the employer’s regular employees. This ruling is significant, as it will likely serve to eliminate the cost savings previously realizable through worker outsourcing arrangements, thus reducing the prevalence of such arrangements in the Thai employment landscape.

 

Tilleke & Gibbins T&G - Stylized

 

For further information, please contact:

 

David Duncan, Tilleke & Gibbins

[email protected]

 

Homegrown Labour & Employment Firms in Thailand

 

International Labour & Employment Firms  in Thailand

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