NEW LABOR PROTECTION LAW

The new Labor Protection Act 2008
(LPA 2008) which came into force on May 27, 2008 provides better protection to employees than the Labor Protection Act 1998 (LPA 1998). A comparison of some of the provisions of the old and new laws is given below.

The LPA 2008 prohibits an employer from demanding or receiving from an employee security for the performance of work or security deposit for damage for the performance of work, whether it be money, other property or personal guarantee, except where the nature or conditions of the work require that the employee be responsible for money or property belonging to the employer, which may expose employer to potential losses. The LPA 1998 only prohibited an employer from demanding or receiving money as security for the performance of work or security deposit for damage for the performance of work, except where the nature or conditions of the work require that the employee be responsible for money or property belonging to the employer, which may expose employer to potential losses.

The LPA 2008 has a new provision that where the working hours of any working day are less than 8 hours, employer and employee may agree to include the remaining working hours to any normal working day, but the total number of working hours must not exceed 9 hours per day or 48 hours per week. Employer shall pay remuneration at 1.5 times the hourly wage rate of a working day for the number of hours worked in excess of 8 hours to a daily or hourly employee, or at 1.5 times the rate for each work unit performed on a working day to an employee receiving wages based on work unit performed. The LPA 1998 did not have this provision. Under the LPA 2008, if employee terminates the employment contract or employer terminates employee for any reason, including the reasons below, employer shall pay wages for the accumulated annual leave days to which employee is entitled to employee. The LPA 1998 did not provide for this.
1. Employee performs assigned duties dishonestly.
2. Employee intentionally commits a criminal offense against employer.
3. Employee willfully causes damage to employer.
4. Employee violates the Work Rules and Regulations or any lawful order of employer, even after a written notice to this effect has been given by employer. However, such written warning shall be effective for a period not exceeding one year from the date the offense was committed, except in a serious case when no warning is necessary.
5. Employee abandons his/her work for three consecutive working days, whether or not there are holidays in between, without justifiable reason.
6. Employee commits negligent acts causing employer to sustain serious damage.
7. Employee has been sentenced to imprisonment by a final court judgment. If the imprisonment is for offenses committed by negligence or a petty offense, damage must have been caused to employer.

If employer relocates or moves its place of business operation and the relocation has an important effect on the normal way of life of employee and employee wishes to terminate his/her employment agreement, under the LPA 2008, employer is required to provide special severance pay of not less than statutory severance to employee. Under the LPA 1998, employer is required to provide special severance pay of not less than 50% of statutory severance to employee.

Statutory severance pay varies depending on the length of employees service with employer, as follows: Under the LPA 2008, when it is necessary for employer to temporarily halt operations, wholly or partially, for any cause other than force majeure, employer is obligated to pay employees at least 75% of a normal working days wages which employees received before the halt of operations, for the entire period employer does not allow employees to work. Under the LPA 1998, employer is obligated to pay only 50% of a normal working days wages to employees.

In order to avoid any possible violation of the LPA 2008, employers should study the LPA 2008 as well as review and revise, if necessary, its Work Rules and Regulations, Employee Handbook, or policies to comply with the LPA 2008 and submit the revised Work Rules and Regulations in the Thai language to the relevant Labor Protection and Welfare office without delay.