Proposed amendment to the Labor Protection Act
On 4 January 2017, the Thai Cabinet approved the proposal of the Ministry of Labor to amend the Labor Protection Act with regard to determination of the minimum wage, submission of employer’s Work Rules, and retirement.
After the Cabinet’s approval, the proposal will proceed with further necessary steps before becoming an enforceable law. According to the relevant officers, it is expected that the draft amendment to the Labor Protection Act (the “amended Act”) may be enforceable by May 2017.
Employers should prepare and announce the Work Rules including the amendment.
Under the current law, upon submission of a copy of the Work Rules to the labor officers, the labor officer may order the employer to revise any illegal Work Rules.
As the amended Act does not require the employer to submit Work Rules and the amendment to the labor officers, the employer should carefully review the Work Rules to ensure that the Work Rules do not contain any illegal provision before announcement. Among other employment documents, Work Rules could be one piece of important evidence to support the employer in the case of a labor dispute.
In addition, employers should observe the new retirement provisions and carefully consider the impact of such provisions to their existing Work Rules and/or any other agreement, particularly for the impact on senior employees or expatriates where there is no clear retirement policy. If employers would like to amend their existing Work Rules and/or any other agreement regarding retirement, they should consult with a professional lawyer in order to ensure compliance with Thai labor law and to mitigate the risk of being liable to imprisonment and/or a fine under the amended Act.
To mitigate the risk of non-compliance under Thai labor law, KPMG Legal Team can assist in reviewing and drafting any relevant documents upon your request. Should you require any assistance, please feel free to contact us.
© 2018 KPMG Phoomchai Tax Ltd., a Thailand limited liability company and a member firm of the KPMG network of independent member firms affiliated with KPMG International Cooperative (“KPMG International”), a Swiss entity. All rights reserved.
KPMG International Cooperative (“KPMG International”) is a Swiss entity. Member firms of the KPMG network of independent firms are affiliated with KPMG International. KPMG International provides no client services. No member firm has any authority to obligate or bind KPMG International or any other member firm vis-à-vis third parties, nor does KPMG International have any such authority to obligate or bind any member firm.