Tag: employment

on by

Thailand : Tax Exemption of Dividend

ConceptExplanation
Dividend and Capital gain ExemptionTax Exemption of Dividend
1. Half Tax Exemption
A limited company incorporated under Thai laws receiving dividends from another company incorporated under Thai laws must include the income in its tax calculation. However, only 50% of such income is subject to tax.

2. Full Tax Exemption
A public limited company incorporated under Thai laws whether it is listed or non-listed company holding at least 25% of the voting rights in the dividend-distributing company incorporated under Thai laws is fully exempted from tax on dividends, provided that the dividend-distributing company does not hold any shares in the dividend recipient company whether directly or indirectly. In both cases, the holding company must hold shares in the dividend-distributing company for at least 3 months before and after the dividend payment.

Tax Exemption of Capital Gain
Tax exemption of capital gain applies only in certain cases of share transfers where specific holding periods and criteria of the shares in the company incorporate and operated in Thailand are met.  
Participation in Non- Resident EntitiesA limited or public limited company incorporated under Thai laws shall be exempt from tax on dividends distributed by any company or partnership incorporated under foreign laws if the following conditions are met:
1. Such Thai company must hold at least 25% of the total voting shares in the dividend-distributing entity, and the shares must be held for at least six months from the date of acquisition to the date the dividend is distributed; and
2. The dividend must be paid from net profits after the tax deduction in the country where the dividend-distributing entity is incorporated, at a rate of not less than 15% of the net profits after tax deduction, regardless of whether that country provides any tax reduction or exemption for the dividend distributing entity.  
Group of Companies StructureA limited or public limited company incorporated under Thai laws shall be exempt from tax on dividends distributed by any company or partnership incorporated under foreign laws if the following conditions are met:
1. Such Thai company must hold at least 25% of the total voting shares in the dividend-distributing entity, and the shares must be held for at least six months from the date of acquisition to the date the dividend is distributed; and
2. The dividend must be paid from net profits after the tax deduction in the country where the dividend-distributing entity is incorporated, at a rate of not less than 15% of the net profits after tax deduction, regardless of whether that country provides any tax reduction or exemption for the dividend distributing entity.  
Group of Companies StructureAny group of companies managed through a holding structure enables centralized and unified control, as well as strategic decision-making. The profits generated by subsidiaries/affiliates of the group of companies will also be required to be retained and reinvested within the group.  
Participation requirementsTo qualify for full dividend tax exemption under Thai laws, the parent company must hold at least 25% of the total voting shares in the subsidiary, with no cross-shareholding structure.
In addition, the parent company must have held such shares for not less than three months before and after the dividend distribution date.  
Benefits of Holding sharesHolding shares in other companies with centralized control will reduce costs, manage risk, protect assets, and provide tax benefits.  
Subholding StructureThai law does not specifically define a subholding company. If it acts like a holding company regardless of level of shareholding structure, the conditions regarding the holding company will be applied.  
Protection of Minority ShareholdersUnder the Thai laws, protection of minority shareholders can be in several form, including participation in meetings, voting rights, and the ability to inspect company records as mutually specified in the articles of association of the company.  
Deduction to avoid Double TaxationDouble Tax Agreements (DTAs)
Bilateral tax treaties are signed by and between Thailand and many other contracting countries (e.g., the United States, Singapore, Japan, China, the United Kingdom, Germany, Australia, etc.) to prevent natural persons and juristic persons with cross-border income from facing double taxation in both Thailand and such particular foreign countries. The measures can be in a form of tax credit or tax exemption.  
Consideration of the Holding Company as a Taxable Person for VAT purposesBusiness engaging in certain activities are required to register for VAT. However, a holding business is not considered as a business activity subject to VAT. Thus, it is not required to register and is not subject to collect and conduct VAT filing.  
Taxation effects on Non-Resident HoldingsA company incorporated under foreign laws that does not conduct business in Thailand, but receives assessable income, such as dividends or other benefits from a company operated and based in Thailand, will be liable to pay tax under Thai laws.
Additionally, capital gains from the sale of shares in a company incorporated and operated in Thailand by a non-resident are subject to withholding tax in Thailand as Thai-sourced income.
Requirements for Capital Gains ExemptionCapital gains from the sale of shares of the company incorporate and operated in Thailand may be exempt from the income tax if the following conditions are met:
• The shares have been held for at least 24 months prior to the sale;
• The sale results in a capital gain (i.e., generating profits from the original investment);
• The company incorporated and operated in Thailand earns at least 80% of its revenue from government-promoted activities for two consecutive accounting years prior to the sale.
In addition, capital gains from the transfer of shares in a venture capital holding company may also be exempt from tax, provided that a venture capital holding company has invested in a company incorporated and operated in Thailand that earns at least 80% of its revenue from government-promoted activities for two consecutive accounting years prior to the sale.  
Group Structure and Tax ConsolidationThailand’s tax system treats each company as a separate taxable entity, requiring companies to file taxes individually. There is no provision under the Thai Revenue Code for group tax filing or consolidated tax returns. Profits and losses cannot be offset across the group.  
Liability of the Parent CompanyA parent company is generally not liable for the debts or obligations of its subsidiary/affiliates, as it is a separate entity from its subsidiaries/affiliates. However, as a shareholder, it is liable to pay for any unpaid amount of shares it holds in such subsidiaries/affiliates. The liability will be as in the amount of unpaid amount of shares.

Source: International Comparison July 2025: Antea

Read Full Article

on by

Thailand : Transfer Pricing

1. Overview of Transfer  Pricing Regulations in ThailandTransfer pricing in Thailand is governed by
1. Thai Revenue Code
2. Ministerial Regulation  No. 369 (B.E. 2563) (2020) Issued under the Thai Revenue Code Regarding the Adjustment of Income and Expenses of Related Companies or Partnership
3. Ministerial Regulation No. 370 (B.E. 2563) (2020) Issued under the Thai Revenue Code Regarding the Revenue Threshold of Companies or Juristic Partnerships According to Section 71 ter paragraph 3
2. Whether aligned with BEPS?Yes, Thailand participates the Inclusive Framework on BEPS.
3. Scope and Applicability of Transfer Pricing RegulationsCompany or Jursitic Partnership (for juristic partnership, it includes limited partnership and registered ordinary partnership)
1. who proceeds a transaction with its related companies or juristic partnerships under Transfer Pricing Regulations (please see below the definition as specified in Item 5.); and
2. Such company or juristic partnership has revenue of more than 200 million THB; and
3. Subjects to disclose information regarding its related companies or juristic partnerships and their transactions by submitting a Disclosure Form to the Thai Revenue Department
4. Transactions Covered:Commercial or financial terms, agreements, or contracts involving sales, services, marketing, advertising, loans, financial assistance, or other commercial or finance transactions, both verbally and in writing.
5. Legal Definition of Related companies or juristic partnerships Under Transfer Pricing RegulationsTwo entities or more are considered as related companies or juristic partnerships if any of the following conditions are met:
1. An entity, either directly or indirectly, holds shares or partnership (contribution) with not less than 50% of the total shares or partnership (contribution) of another entity; or
2. A shareholder or partner of an entity holds shares or partnership (contribution) at 50% or more of its total shares or partnership (contribution) and such shareholder or partner holds shares or partnership (contribution) at 50% or more of the total shares or partnership (contribution) in another entity; or
3. An entity that has a capital, management, or control relationship with another entity and either of them cannot operate independently.
6. Recognized Transfer Pricing MethodsThailand applies six methods:
1. Comparable Uncontrolled Price Method
2. Resale Price Method
3. Cost Plus Method
4. Transactional Net Margin Method
5. Transactional Profit Split Method
6. Other Methods subject to notification to the Director General of the Thai Revenue Department
7. Data Used for comparison
to improve the company or juristic partnership’s incomes and expenses.		The tax assessor will use these data to assess the company or juristic partnership’s incomes and expenses;
Internal Data
1. Prioritize using internal data from transactions that occurred between the related companies or juristic partnerships with other third-party companies or juristic partnerships
External Data
2. If internal data is unavailable, external data from transactions of other third-party companies or juristic partnerships shall be used, regardless of whether the transactions are conducted in Thailand or outside and by incorporated entities under Thai or foreign laws
8. Transfer Pricing Audit Process and PenaltiesTransfer Pricing Audit Process
Documentation Review – Disclosure Form (Master Files) and Local Files which were requested by the tax assessor to be used for analysis.
1. Contractual Term of the Transaction
2. Functional Analysis : FAR
3. Characteristic of Property & Service
4. Economic Circumstances
5. Business Strategy
Remarks:
– Local Files refer to the documents or evidence used to analyze the contractual terms of the transactions
– All documentations must be submitted in Thai language
The Tax Assessor Examination – The tax assessor verifies Arm’s Length Price (ALP).
Adjustments – If pricing is incorrect, taxable income is adjusted.
Penalties for Non-Compliance
ViolationPenalty
Failure to file a Disclosure Form, providing a false declaration, or providing insufficient informationA fine not more than 200,000 THB
9. Reporting Deadlines and Compliance Timelines1. Disclosure Form: Within 150 days from the last day of the fiscal year by electronic filling or by hand-in submission
2. Local Files: The Revenue Department can request local files within 5 years from the Disclosure Form filing date, and the Local Files must be submitted within 180 days of receiving the first notification or 60 days of receiving subsequent notifications by the Thai Revenue Department

Source: International Comparison March 2025 : Antea

Read Full Article

on by

Social Security: Registration for Migrant Workers

Introduction:

In a significant move to enhance the welfare of migrant workers, the Thai government has mandated the registration of foreign workers under the social security system. This initiative, stemming from a Cabinet resolution on 24 September 2024, aims to ensure that migrant workers from Cambodia, Laos, Myanmar, and Vietnam receive the same benefits as Thai workers. The Ministry of Labor has issued an announcement allowing foreign nationals from these countries to work in Thailand under special provisions. Employers are required to register migrant workers under the social security system to ensure they receive benefits such as medical care, compensation for sickness and childbirth, and old-age pensions, in compliance with the Social Security Act B.E. 2533 (1990) and the Workmen’s Compensation Act B.E. 2537 (1994).

Documents for Registration:

  1. New Migrant Workers: Those who have never been registered with the Social Security Office (SSO) must submit documents issued by the Foreign Workers Administration Office which are work permit or certificate of employment for migrant workers and government fee receipt.
  • Previously Registered Migrant Workers: These workers must provide one of the following identity documents which are passport, travel document, non-Thai citizen identity card (pink card), social security card, or work permit and fill out the required form.
construction-site-build-construction-work-159306.jpeg

Timeframe for Registration:

  1. Workers with Pre-Announcement Permits: For migrant workers who obtained their work permits before the announcement’s effective date (24 December 2024), employers must register them within 30 days, i.e., by 23 January 2025.
  2. Workers with Post-Announcement Permits: For those who receive their work permits on or after 24 December 2024, employers must register them within 30 days from the date their work permits are obtained.

Key Takeaways:

  1. Registration Deadlines: Employers have specific period of time to register their migrant workers under the social security system.
  2. Mandatory Registration: Employers must register migrant workers under the social security system to ensure they receive benefits such as medical care, sickness and childbirth compensation, and old-age pensions.
  3. Required Documents: New and previously registered migrant workers must submit specific documents to prove their eligibility and registration status.

Related Article: Proposed Reforms for Migrant Workers in Thailand: Temporary Stay and Work Permit Relaxations – The Legal Co., Ltd.

Author: Panisa Suwanmatajarn, Managing Partner.

Other Articles

on by

Thailand’s Social Security Reform

On 1 December 2024, the Social Security Office (SSO) under the Ministry of Labor opened a public hearing to gather feedback on a draft Ministerial Regulation aimed at replacing Ministerial Regulation No. 7, which has been in effect since 1995. The proposed regulation introduces changes to the minimum and maximum wage bases used for calculating contributions to the Social Security Fund (SSF). The goal is to ensure that the regulation reflects current economic conditions and enhances benefits for insured individuals. Ministerial Regulation No. 7 (1995) set the wage base for insured individuals under Section 33 at a minimum of 1,650 THB per month and a maximum of 15,000 THB per month.

Proposed Changes to the Wage Base

To adapt to current economic conditions and improve benefits, the SSO proposes gradual adjustments to the wage base as follows:

  • 1 January 2026 – 31 December 2028:
    • Minimum: 1,650 THB/month
    • Maximum: 17,500 THB/month
  • 1 January 2029 – 31 December 2031:
    • Minimum: 1,650 THB/month
    • Maximum: 20,000 THB/month
  • From 1 January 2032 onwards:
    • Minimum: 1,650 THB/month
    • Maximum: 23,000 THB/month

These adjustments will result in higher contributions from both employers and employees but will also lead to enhanced benefits for insured individuals. The increase in the wage base will gradually improve benefits across various categories.

Employer’s Obligations under the Social Security Act

Under Thailand’s Social Security Act, employers are required to deduct contributions from employees’ wages and contribute an equal amount to the SSF on behalf of their employees. Non-compliance, such as failing to register employees or remit contributions, may lead to fines or legal action. Compliance ensures employees’ financial security.

Key Takeaways

  • Purpose: To align with the current economic situation and improve benefits for insured persons.
  • Changes: Increased wage ceiling, higher contributions, and increased benefits.
  • Benefits: Increased compensation for sickness, maternity, disability, death, unemployment and higher pension.
  • Implementation: Gradual increase in wage ceiling over several years.

Author: Panisa Suwanmatajarn, Managing Partner.

Other Articles

on by

Labor: Legal Consideration for Employment Termination

Disclaimer:
This article provides a general legal framework for employment termination in Thailand. It is important to note that specific industries, professions, or situations may be subject to additional or different regulations. If a matter in question is governed by specific legislations, those particular laws and regulations must be considered in addition to the general principles outlined here.


Introduction:
Employment termination is a critical aspect of workforce management that requires careful consideration of legal and ethical factors. In Thailand, the Labor Protection Act B.E. 2541 (1998) provides the primary framework for lawful employment termination, balancing the rights of employers and employees. This article explores the key aspects of employment termination under Thai labor law, focusing on contract types, compensation requirements, and legal protections for both parties. Types of Employment Contracts and Termination Procedures:

The Labor Protection Act B.E. 2541 (1998) recognizes two primary types of employment agreements:

1. Fixed-Term Contracts

    • Termination occurs automatically upon contract expiration.
    • Early termination by the employer requires written notice.
    • Premature termination without cause may result in a breach of contract penalties.

    2. Non-Fixed Term Contracts

      • Termination requires written notice prior to or on the wage payment date and will be effective on the following payment date.
      • Notice period should not exceed three months unless specified otherwise in the contract.

      For both contract types, failure to provide proper notice obliges the employer to pay compensation in lieu of notice and salary until the effective termination date. Additional contractual obligations, such as repatriation expenses, must also be honored.


      Compensation for Termination Without Cause:
      When an employer terminates an employee without the employee committing any offense specified by law or contract, the Labor Protection Act B.E. 2541 (1998) mandates severance pay. The amount is calculated mainly on the employee’s length of service.


      In cases of contract breach before expiration without the employee’s fault, employers must pay damages. Failure to provide advance notice also requires compensation in lieu of notice.

      Source: International Business Newsletter December 2024 (antea-int.com)

      Read Full Article

      on by

      Carbon credit market regulations

      Carbon Credit Market Regulations
      Currently, Thailand applies voluntary program called Thailand Voluntary Emission Reduction Program (“T-VER“) for controlling and managing of carbon credit market. No compulsory laws or regulations to control or manage of carbon credit market.

      However, there are currently 3 draft laws related  to the carbon credit market under the process of public hearing which are:
      1. Draft Act on Promoting Greenhouse Gas Reduction and Carbon Credits B.E. ….
      2. Draft Act on Climate Change B.E. …. (proposed by Department of Climate Change and Environment, Ministry of Natural Resources and Environment
      3. Draft Act on Climate Change B.E. …. (proposed by Ms. Saniwan Buaban, the House Representative)
      (all herein after referred to as “Drafts“).
      DefinitonsActivity dataNot mentioned in the guideline of T-VER.
      Baseline yearNot mentioned in the guideline of  T-VER.
      Compliance MechanismGoverning Authorities
      Thailand Green House Gas Management Organization (Public Organization) (“TGO“).
      Obligated Entities
      As Thailand currently applies for voluntary program, thus, there is no spcified obligated entities. However, the definition of obligated entitiies are mentioned in the Drafts.
      Application for Registration in T-VER
      T-VER has designated the types and categories of the businesses registering to join the program (e.g. renewal energy business, transportation business, waste management business). Such businesses may submit application and required documents to TGO. The duration for consideration of the application is 60 days.
      Once the business is registered, the business shall have the duty to prepare for monitoring report regarding amount of Green House Gas (“GHG“) emission for further requesting for carbon credit certificate.
      GHG Emission Intensity Trajectory and TargetsThe Types of GHG
      Under the guideline of T-VER, the GHG covers
      ◾ carecarbon dioxide (CO2)
      ◾ methane (CH4)
      ◾ nitrous oxide (N2O)
      ◾ hydrofluorocarbons (HFCs)
      ◾ perfluorocarbons (PFCs)
      ◾ sulfur hexafluoride (SF6)
      ◾ nitrogen trifluoride (NF3)
      The Calculation of GHG Emissions Intensity
      The calculation of GHG emission intensity  will be calculated by the business opeartor. Given that the sum amount of GHG emission result known as “Ery”, it must contain no decimal.
      Monitoring and Reporting ProcessSubmission of Monitoring Report of GHG Emission
      The business is required to prepare the monitoring report of GHG emission for further requesting for  carbon credit certificate. The monitoring report of GHG emission must be submitted together with
      1) Verification report made by a third party known as Validation and Verification Body (“VVB“)
      2) Calculation of the amount of GHG emission in excel form
      3) Lists of tools used for recording of GHG emission of the business.
      Verification and Assessment of PerformanceFor T-VER, the verification process applies the standard of ISO 14064-3:2019 for assessing the reduction of the GHG emission from the business. The verification and assessing must be conducted by VVB.
      Issuance and Surrender of Carbon Credit CertificateIssuance of Carbon Credit Certificate
      Business may request for carbon credit certification by submitting application and related documents to TGO. This certification must be requested within 2 years from the date which status of being business under T-VER is terminated. If the business operator fails to do within this period, they will no longer be able to request for further carbon credit certification for their business.
      Once TGO approves the registration of carbon credit certificate, a carbon credit certificate will be issued within 20 working days from the date of completion of the review.
      Surrender of Carbon Credit Certificate
      The surrender of carbon credit certificate can be conducted through Thailand Carbon Credit Registry (“TCCR“) which is electronic platform for carbon credit market. 
      Trading of Carbon Credit CertificatesTrading of Carbon Credit
      The seller and buyer of carbon credit must have an account registered with TCCR, and every transaction (i.e. sellign and trading) has to be moitored and approved by the carbon credit registrar appointed by the TCCR.
      Tax Benefit
      Profits earned by business  from the sale of carbon credits in Thailand under T-VER  will be exempted from corporate income tax.
      Banking of Carbon Credit CertificatesProvisions regarding banking and carbon credit certificate are not mentioned in the guideline of T-VER, including the expiration date of  carbon credit certificate.
      Compliance with GHG Emission Intensity TargetsTGO will assessed the GHG emission amount of the business under T-VER for the improvement of GHG emission reduction.

      Source: International Business August 2024 (antea-int.com)

      Read Full Article

      on by

      Labor: The Battle for Fair Treatment

      In the intricate world of labor law, a case emerged that would challenge the principles of fair treatment and equality in the workplace. This is the story of a quality control inspector who fought for his rights and set a precedent for labor practices in Thailand.

      The Employment Journey:

      The plaintiff, once an employee of the first defendant and later a contract worker for the second defendant, was sent to work in the production department of the second defendant on 25 January 2017. His final position was as a quality control inspector. On 6 May 2020, the second defendant returned the plaintiff to the first defendant. During his tenure with the second defendant, the plaintiff received a housing allowance of 750 baht per month, while direct employees of the second defendant received 2,300 baht per month. The plaintiff never received annual bonuses or diligence allowances from either defendant.

      The Dispute:

      The plaintiff filed a lawsuit seeking for housing allowances, diligence allowances, and bonuses. The labor court found that the defendants were not liable for the housing and diligence allowances. However, the court ruled that the second defendant’s failure to pay bonuses to contract workers, who performed the same tasks as direct employees, constituted discriminatory treatment under Section 11/1 of the Labor Protection Act B.E. 2541 (1998).

      The Appeal:

      The second defendant appealed, arguing that under the Labor Relations Act B.E. 2518 (1975), they had the right to set different criteria for union members and non-members. Since the plaintiff was not a union member, he was not entitled to the bonus. The Specialized Court of Appeal dismissed this argument, stating it was a factual dispute rather than a legal one.

      crop asian judge working on laptop in office

      The Supreme Court’s Decision:

      The Supreme Court had to determine whether the second defendant’s appeal was a legal issue. The court found that the second defendant’s argument was indeed a legal one, as it involved the interpretation of the Labor Relations Act B.E. 2518 (1975) and the Labor Protection Act. B.E. 2541 (1998). The Supreme court ruled that the second defendant’s practice of not paying bonuses to contract workers was discriminatory and violated Section 11/1 of the Labor Protection Act B.E. 2541 (1998). The Supreme Court also addressed the second defendant’s claim that applying the employment conditions agreement to non-union members violated the Constitution. The Supreme Court found that this was not a constitutional issue but rather a matter of legal interpretation.

      The Outcome:

      The Supreme Court upheld the lower court’s decision, ordering the second defendant to pay the plaintiff a bonus of 124,796 baht, with interest. The Supreme Court also adjusted the interest rate to comply with the new Civil and Commercial Code amendments, which reduced the default interest rate from 7.5% to 5% per year.

      Key Takeaways:

      1. Equality in Benefits: Employers must provide equal benefits and welfare to contract workers and direct employees performing the same tasks.
      2. Legal Interpretation: Disputes involving the interpretation of labor laws can be considered legal issues and are subject to higher court review.
      3. Non-Discrimination: Discriminatory practices in the workplace, such as unequal bonus payments, are prohibited under labor protection laws.
      4. Constitutional Claims: Arguments based on constitutional grounds must clearly demonstrate a conflict with constitutional provisions to be considered valid.
      5. This case underscores the importance of fair treatment in the workplace and the legal avenues available to employees’ seeking justice. It serves as a reminder that equality and non-discrimination are fundamental principles in labor law.

      Author: Panisa Suwanmatajarn, Managing Partner.

      Other Articles

      on by

      Labor: Private Higher Education Institutions with Special Labor Protections

      Background:

      Dr. James (a pseudonym) had been a dedicated professor in the Faculty of Liberal Arts at a private university for over 28 years. His commitment to teaching and research was unwavering until the day he received a retirement notice from the university.

      “I felt betrayed,” Dr. James recalls. “When I started working here, there was a regulation about severance pay that was more beneficial to employees. But the university changed the rules without my knowledge.”

      Feeling that he had been treated unfairly, Dr. James decided to sue the university in the labor court, demanding severance pay according to the original regulations.

      “I thought this was a violation of labor rights,” he says. “But I was not sure if standard labor protection laws applied to private universities”.

      Dr. James’s case went through the Central Labor Court, the Specialized Appeal Court, and finally reached the Supreme Court.

      The Supreme Court’s decision in 2023, surprised Dr. James and many in the academic community. The Supreme Court ruled that private higher education institutions are not subject to regular labor protection and labor relations laws.

      “I had no idea there was specific legislation for private higher education institutions,” Dr. James says, disappointment evident in his voice. “But at least this law stipulates that employees must receive benefits no less than those prescribed by general labor protection laws”.

      Although, he lost the case, Dr. James’s fight was not in vain. His case helped raise awareness about the rights of personnel in private higher education institutions.

      “I hope my story will be a lesson for my colleagues,” Dr. James concludes. “We need to know our rights and closely monitor any changes in regulations.”

      Key Takeaways

      1. Private higher education institutions in Thailand are governed by specific labor protection laws, not subject to general labor protection and labor relations laws.
      2. Employees in private higher education institutions must receive benefits no less than those specified in general labor protection laws.
      3. Changes to internal regulations of private higher education institutions are not considered amendments to employment conditions under labor relations law.
      4. Personnel in private higher education institutions should regularly monitor changes in internal organizational regulations.
      5. Labor lawsuits, even if unsuccessful, can help raise awareness about the rights of employees in private higher education institutions.

      Author: Panisa Suwanmatajarn, Managing Partner.

      Other Articles

      on by

      Proposed Reforms for Migrant Workers in Thailand: Temporary Stay and Work Permit Relaxations

      Thailand hosts numerous migrant workers from neighboring countries, including Cambodia, Laos, Myanmar, and Vietnam. These workers often face legal challenges such as expired documents, lack of proper work permits, or illegal entry. To address these issues and create a more supportive environment, the Thai Cabinet approved the Ministry of Labor’s proposal on 24 September 2024, with an official announcement expected to be published in the Royal Gazette soon. Key reforms include:

      1. Management of Migrant Workers

      • Eligible Nationalities: Cambodian, Laotian, Myanmar, and Vietnamese workers with expired work permits, expired visas, or no work permits, including those who entered the country illegally.
      • Dependents: Children under 18 may stay with their parents. Those turning 18 have 60 days to apply for a work permit.
      • Temporary Stay: The Ministry of Labor will define the period for migrant workers to legalize their status and apply for work permits. Employers must apply for permits, granting workers a one-year permit upon approval.

      2. Work Permit Renewal

      • Eligibility: Migrant workers from Cambodia, Laos, Myanmar, and Vietnam with valid permits under prior Cabinet decisions (2022-2023) and Memorandum of Understanding (MOU) until February 13, 2025.
      • Extension: Eligible workers can apply for a two-year extension, renewable once for an additional two years.

      3. Employment Conditions Amendment

      • Employer Change: Migrants leaving their job before contract expiry or at its conclusion must begin working for a new employer within 60 days (previously 30 days).
      • Validity: These changes are valid until February 13, 2029.

      4. Exemption from Employment Notifications

      • Exemption: Migrants with work permits are exempt from notifying authorities of employer or job details unless changing or adding an employer.
      • Validity: This exemption is effective until February 13, 2029.

      Conclusion: The Thai government’s proposed reforms mark significant progress in improving conditions for migrant workers. By easing temporary stay regulations, extending work permits, and simplifying employer change processes, these measures aim to create a more stable and supportive environment. These reforms are expected to benefit both migrant workers and the Thai economy by promoting legal employment and reducing the risks associated with undocumented labor.

      Key Takeaways:

      • Both migrant workers and the Thai economy are expected to benefit from these reforms.
      • The Thai government has introduced reforms to improve conditions for migrant workers from Cambodia, Lao, Myanmar and Vietnam.
      • The reforms include relaxed temporary stay rules, extended work permits, and easier employer change procedures.
      • These changes aim to create a more stable and supportive environment for migrant workers.

      Author: Panisa Suwanmatajarn, Managing Partner.

      Other Articles

      on by

      Labor: An Overview of Whistleblower Protection in Thailand

      Introduction:

      The concept of whistleblowing, while well-established in many countries, is relatively new in Thailand. Whistleblowing serves as a crucial tool for enhancing accountability and transparency within organizations. The protection of whistleblowers is essential to encourage employees to expose unethical behavior, corruption, and labor law violations without fear of retaliation. This article examines the current state of whistleblower protection in Thailand’s labor law context.

      Legal Framework:

      mad formal executive man yelling at camera

      Absence of Specific Legislation

      Thailand currently lacks specific legislation dedicated to protecting whistleblowers. The term “whistleblower” itself is not formally defined in Thai law. However, existing laws provide some degree of protection for employees reporting unethical practices as follows:

      1. Protection from Thai Labor Legislations

      In Thailand, there is currently no legislation specifically protecting whistle-blowers, nor is the term formally defined in Thai law. However, the Labor Relations Act B.E. 2518 (1975) (“Labor Relations Act”) provides some level of protection for employees who report unethical practices. The objective is to protect employees so that they receive protection and can exercise their various labor rights without interference, pressure, or coercion from others, whether from their employers or other organizations. The Labor Relations Act prohibits employers from terminating employees or taking actions that would prevent them from continuing their work due to protesting, filing complaints, serving as witnesses in labor law matters, or being a member of the labor union. These provisions can be interpreted as protective measures for whistle-blowers, imposing penalties of imprisonment and fines on employers who retaliate against them.

      In addition to the Labor Relations Act, there are also provisions related to whistleblower protection in the Labor Court Establishment and Labor Litigation Procedure Act B.E. 2522 (1979) which allows the labor court to order an employer to reinstate an employee at the wage rate received at termination if it finds the termination unfair. If the employer cannot continue working, the court will assess the damages, considering the employee’s age, employment length, hardships, grounds for termination, and any compensation the employee is entitled to.

      2. Awareness Among Organizations

      Organizations in Thailand, such as the Stock Exchange, have recognized the importance of protecting employees. They utilize whistleblowing as a tool to gather complaints regarding violations of laws, regulations, or ethical standards, which can damage the organization’s reputation and assets.

      The amendment to the Securities and Exchange Act B.E. 2535 (1992) has introduced additional sections related to whistleblower protection. This amendment prohibits companies from engaging in any unfair practices against employees, workers, or other individuals hired by the company who assist the Securities and Exchange Commission, the Capital Market Supervisory Board, or the Office of the Securities and Exchange Commission in investigating wrongdoing. Violations of these provisions may result in criminal penalties, including fines for the listed companies and imprisonment for directors of such listed companies.

      3. Legal Framework for Disputes

      As mentioned above, when there is a labor-related offense or unfair acts between employers and employees, it will fall under the jurisdiction of the labor court. If there is a crime in other cases involved, for example, if employee A is sexually harassed by the manager and employee B reports the offense to management, employee B will act as a whistleblower and have the right to receive protection under the Labor Relations Act and the Labor Court Establishment and Labor Litigation Procedure Act B.E. 2522 (1979).

      silhouette of man holding flamethrower

      4. Judicial Precedents

      Currently, no precedent judgment is directly related to whistleblowing cases. However, there is a judicial precedent reflecting the protection of employees from unfair dismissal resulting from their action against the employer to request compliance with their rights as employees.

      Under the Precedent Supreme Court No. 3451-3452/2549, around 200 employees protested their management, requesting that their employment conditions regarding bonus payment be amended. The protest began at 7 a.m. and ended at 7.15 a.m., with the employer’s management team declaring to alter the employment conditions and refrain from pursuing any disciplinary action against those employees. Later, the employer filed a case to dismiss these employees.

      The Supreme Court ruled that when an employer expressed a desire not to pursue any disciplinary action against employees, the employer was not entitled to terminate the employees.

      According to the precedent case given, protesting to obtain a change in employment conditions is comparable with the whistleblower filing a labor rights complaint. The court will rule following the Labor Relations Act, which safeguards employees’ actions based on their rights.

      Conclusion:

      Although, Thailand lacks specific legislation for whistleblower protection, existing labor laws provide a framework that can be interpreted to safeguard employees who act as whistleblowers. The Labor Relations Act and the Labor Court Establishment and Labor Litigation Procedure Act offer mechanisms to protect employees from unjust termination and other retaliatory actions.

      As awareness of the importance of whistleblower protection grows among organizations and regulatory bodies, it is likely that more robust protections will evolve within Thailand’s labor system. However, there remains a need for comprehensive legislation specifically addressing whistleblower protection to ensure that employees can report misconduct without fear of reprisal.

      Author: Panisa Suwanmatajarn, Managing Partner.

      Other Articles