Amendments to Thailand’s Factory Act will greatly affect the entire industrial factory business throughout the country. On 30 April 2019, the Royal Thai Government Gazette declared an amendment to the Factory Act B.E. 2535 (1992) by The Factory Act (No. 2 and No. 3) B.E. 2562 (2019). Recently, The Factory Act (No. 3) passed the 180 days period and became effective on 1 May 2019. The Factory Act (No. 2) is not effective yet.
In the amendment, the word ‘factory’ has been modified to mean a building, place, or vehicle using machinery with 50 horsepower or more, or 50 workers with or without machinery, in its operations. This means that around 60,000 factories nationwide with machineries and workers under the old factory act will from now on not be classified as a factory governed by the factory act any longer, but they still need to comply with the local ordinances, issued under e.g. the Town Planning Act, or the Public Health Act 1992.
Moreover, the word “construction of buildings” was removed from the definition of a “factory set up”. As a result, the factory license is no longer required for the building construction process as it is not considered as part of “factory set up” but it will be required for installation of machinery in the building.
It is stated in the new Factory Act that the factory or machinery inspection may be carried out by a factory inspector who is a qualified person or juristic person to perform and prepare the report, instead of a competent government official. Previously, checking the machinery or factory condition was the responsibility of the Department of Industrial Works officials.
Also, the officer in charge will have the authority to stipulate an exemption to the following factories, from complying with certain provisions of the Factory Act ( in certain cases and under specific rules, procedures and conditions):
(1) Factory belonging to a state agency;
(2) Factory that is used for research;
(3) Factory belonging to educational institutes that is used for training;
(4) Factory that operates as a household industry;
(5) Factory with necessary operations that connect to other business which are not factories according to the Factory Act and established in the same area.
Lastly, according to The Factory Act (No. 2) the general factory operators do not have to renew the factory license (Ror.Ngor. 4) anymore until the factory ceases operations. This is good news for all factory operators, because typically they used to require a renewal every five years in order to avoid that the license expires.
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