Tag Archive: employment

  1. Work Permit Extension under the Emergency Decree on Foreign Employment Management B.E. 2560

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    On the 10th of May 2018, the Department of Employment (DoE) has published a letter to address the scope of the Work Permit under the Emergency Decree on Foreign Employee Management B.E. 2561 (the “Decree 2018”). It especially elucidated the question whether a foreigner who has been granted a Work Permit once is able to work in another type of work, for another employer, at another workplace or work condition in Thailand.

    Section 70 of the Emergency Decree on Foreign Employee Management B.E. 2560 (the “Decree 2017) has been repealed through the Decree 2018 and, therefore, the application form TM.6 has been revoked, neither the employer nor the employee has to register any changes related to the type of work, the employer, workplace or work condition any longer.

    Section 70 of the Decree 2017 had stipulated the interdiction to employ a foreigner who had registered a different type of work, a different employer, workplace or work condition in the Work Permit; the application form TM.6 had been used to amend the Work Permit if changes occurred.

    As a result, a foreign employee can work continually in a different type of work, at a different workplace or under different work conditions. However, this only applies as long as the employment is under the same employer as recorded in the existing Work Permit.

    This means a foreign employee is allowed to work anywhere and is not obliged to submit an application for changing or adding the workplace in the Work Permit as long as the employee works for the same employer.

    A foreigner is not allowed to employ himself and thereby apply for the Work Permit. However, a foreigner may be employed by a registered company in which he himself has director authority.

    It is notable that the DoE has issued a new form of Work Permit book which does not include the section “condition”. This seems to enable the foreigner to work under flexible conditions. A foreigner who holds an old version of the Work Permit is not obligated to notify the DoE from now on regarding the.

    A foreigner who wishes to change or add a type of work is not prohibited from doing so, as long as that work is not excluded by the Official List. The employee can start with a new or additional type of work immediately without notifying the DoE. Employer and Employee must notify the DoE only if the employee has a new or additional employer according to Section 13 of the Decree 2018.

    In summary, if the employee wishes to change or add the type of work, workplace or work condition then the employee is free to do so without notifying the DoE. The employee is allowed to work with the existing Work Permit without amendments.

    Once the employee wants to change the employer or add an employer, both the employee and employer, have to proceed the registration at the DoE. Both have to submit an employment form to the officials within 15 days from the date of commencement, according to Section 64/2 and 13 of the Decree 2018. Otherwise, the employer and employee are liable for a fine of THB 20,000.

  2. New Regulations on the Employment of Foreigners

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    In March 2018 the Thai cabinet approved the amendments to the Royal Ordinance on the Management of Foreign Workers Employment B.E. 2560 (2017). The amendments were published on March 27, 2018 in the Royal Gazette and are known as the Royal Decree on Managing the Work of Foreigners (No. 2) B.E. 2561 (the “Decree”).

    The new provisions set forth significant changes to the work permit procedures in Thailand. They aim at providing more clarity and removing red tape in the process of employing foreigners in Thailand, an effort that is certainly viewed favorably by foreign employees and their employers. The new provisions introduce, where possible, notification requirements rather than a permission system.

    Notable is that the definition of “work” has been adjusted, it now reads: “performing any profession, whether or not there is an employer, excluding business operations of a foreign business license’s holder under the Foreign Business Act” – as opposed to the previously wider definition of “exerting one’s physical energy or employing one’s knowledge to perform a profession or perform work, whether or not for wages or other benefits”. Notably, the new definition explicitly excludes the activity of foreigners holding or representing an entity holding a Foreign Business License (“FBL”). Therefore, foreigners working for an entity holding an FBL will not be required to obtain a work permit any longer.

    A work permit is also not required if a foreigner enters the Kingdom only temporarily. The modified Section 4 of the Decree provides the following additional work permit exemptions:

    • Entering Thailand to organize or attend a meeting; this includes the participation in a pro-active way and allows the participant to give opinions, lectures and presentations.
    • Entering Thailand to organize or attend training, workshops or seminars
    • Entering Thailand to organize or attend art and/or cultural exhibitions, sports competitions or any other activities, as prescribed by the Thai cabinet.

    The work permit exemptions under Section 4 also include foreigners who are investors or operators of businesses, experts or highly skilled professionals with knowledge that could be beneficial to Thailand’s development, as prescribed by the Thai cabinet.

    It is now possible to submit an application for a work permit online, within Thailand or from outside the country. Furthermore, the processing time for issuing a work permit will not exceed 15 working days once a completed application has been submitted to the Department of Employment.

    Finally, it should be noted that employer and foreign employee are obligated to notify the registrar within 15 days about the employment or any changes. Failure to do so will lead to a fine ranging from THB 20,000 to THB 50,000.

    Particularly with regard to foreigners who work without a work permit, imprisonment is no longer stipulated by the provisions. Now, with the effective Royal Decree (No. 2) B.E., a foreigner who works without a work permit is subject to a fine of THB 5,000 to THB 50,000.

    Employers who hire a foreigner without the relevant work permit will face a reduced fine of THB 10,000 to THB 100,000 per employee. An employer who repeats this offence shall be punished with imprisonment up to 1-year and/or a fine ranging from THB 50,000 to THB 200,000. Moreover, the employer will be prohibited from employing foreigners for three years.

    It will be interesting to see the implementation of the new rules in practice – we will keep you informed.

  3. Termination of Employment : Part III – Lay-Off Termination

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    What are the definitions of “termination” and “lay-off”?

    Termination of employment is an employee’s departure from a job. Termination may be voluntary on the employee’s part, or it may be at the hands of the employer, often in the form of dismissal (firing) or a layoff.

    Dismissal or firing is generally thought to be the fault of the employee, whereas a layoff is generally done for business reasons (for instance a business slowdown or an economic downturn) outside the employee’s performance.

     

    Checklist:

    If you decide to terminate an employee with an unlimited temporary employment, please pay attention our following advice for a correct termination:

     

    1. Notice period

    The employer must mind the notice period which ends on the date of the next wage payment. This is usually the last working day of the month following the termination notice.

    E.g.: A termination notice is submitted on 10. February. The notice period then ends on 31st March (presumed that the 31st march is not on a weekend or public holiday).

     

    Remark regarding probation period

    • The requirement for a notice period applies for the first 120 workdays as well.
    • Therefore, an employee in a probation period must be given the same notice period;
    • A paragraph in the employment contract which allows the employer to layoff without notice during the probation period is void;
    • If the employer does not observe the notice period, the employee is entitled to wage payment during the notice period (“wage in lieu of advance notice”)

     

    2. Severance pay

    An employer shall pay severance pay to an employee who is laid off. The amount of the severance pay varies, depending on the period of employment:

     

    1

    Remark:  the employer is not required to pay severance to an employee whose employment is terminated with cause ( -> Please see our client memo on dismissal of an employee with cause )

     

    Two special cases for severance pay:

    a) reorganization measures due usage of machines

    • In this case, the employer must to make an announcement of an intended termination 60 days in advance and inform the “Labour Inspector”
    • If the employer neglects the period, he must pay special severance in amount of the wage payment for 60 days beside the regular severance pay (“special severance pay in lieu in advance notice”)

    b) relocating of the workplace

    • If the employee is unwilling to work at the new workplace, he has the right to terminate the employment.
    • In this case, the employee has the claim to get the full regular severance pay

     

    3. Annual holiday pay, Overtime pay, Holiday pay, Holiday overtime pay

    The Employer shall pay wages of the employee for annual holidays in the year of termination equal to the proportion of annual holidays to which the employee is entitled. Also, Overtime Pay and Holiday Overtime Pay to which the Employee is entitled shall be paid within three days from the date of the Employee’s termination

    Find out more about our labor and employment services

  4. Termination of Employment : Part II – Dismissal of an employee

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    What are the definitions of “termination” and “dismissal”?

     

    Termination of employment is an employee’s departure from a job. Termination may be voluntary on the employee’s part, or it may be at the hands of the employer, often in the form of dismissal (firing) or a layoff. Dismissal or firing is generally thought to be the fault of the employee, whereas a layoff is generally done for business reasons (for instance a business slowdown or an economic downturn) outside the employee’s performance.

     

    Dismissal is when the employer chooses to require the employee to leave, generally for a reason which is the fault of the employee. In the case of the dismissal of an employee, the contract ends without notice and without severance pay.

     

    Checklist:

    If you decide to dismiss an employee (termination without notice), please pay attention our following advice for a correct termination.

     

    1. Existence of an important reason

    Under Thai law, a dismissal is considered under the following circumstances:

    • being dishonest in performing duties or intentionally committing a criminal against the employer
    • intentionally causing damages to the employer;
    • performing an act of negligence which causes severe damages to the employer;
    • violating work rules or regulations or disobeying the employer’s orders which are legal and fair and which the employer has already given a warning letter, except in serious cases for which the employer is not required to give a warning;
    • neglecting the work duties for a period of three consecutive work days without a reasonable cause, whether or not there is a holiday intervening in such period; and/or
    • having been imprisoned by a final judgement.

    If one of the aforementioned cases is committed with negligence or is a petty case, the employer must prove that he has suffered a damage.

     

    2. Ultima Ratio (“the last resort”)

    The extraordinary termination should always be the last resort. The employer must consider any other measure that may solve the problem like:

    • transfer to another workplace or department; and/or
    • ordinary termination.

     

    3. Declaration of the dismissal

    The employer should name the important reason in the termination letter.  If it is missing, the employer cannot invoke to this reason in a future proceeding.

    It is commendable to secure oneself with warning letters (please see our FLT memo related to “Warning Letter to Employee”)

     

    4. Provide the employee with the termination letter

    The termination letter should be provided via post or personally.

    The employee can have the termination reviewed by the Labor Court. If the Labor Court finds that the termination was unjust, the employer may be ordered to letting the employee work under the old conditions.

    If it comes to the result the termination was unjust, but the continuation of work is unacceptable, the employer has to compensate for damages.

     

    5. Practical measures

    If the employee leaves the organization, certain things need to be managed, for example:

    a) Return of property

    If the employee used employer property as a part of the job, make sure you collect them. For example:

    • company laptop
    • cellphone
    • office keys
    • ID badges

    b) Cancellation of any access

    You should cancel any access the employee might have to the office. Files, computer files should be protected and make sure that your IT staff cancels passwords to any company digital files. For example:

    • disconnect the computer login
    • remove the email address from the staff list
    • disable entry building code or entry swipe card

    For the e-mail-address, make an arrangement with your ID-administrator to determine exactly for how long this account will be active, to avoid unauthorized use by the departing employee.

    c) Cancellation of advantages

    Make sure that you cancel employee benefits. For example:

    • Health-, Dental-, Life-, Disability Insurance
    • Stop retirement contribution

    d) Final pay

    Make sure that your payroll department calculates the final hours of work as well as any unpaid vacation hours and let the employee know when he or she can get them.

    Find out more about our labor and employment services

  5. Termination of Employment : Part I – Warning Letter to Employee

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    A warning letter is useful to confirm and address a performance or conduct issue with an employee. Such performance issues may include, for example:

    • violating work rules or regulations or disobeying the employer’s orders;
    • continuously coming too late to workplace;
    • insults against employer or colleagues;
    • too frequent sick leave;
    • alcohol on workplace;
    • unexcused absence;
    • work refusal;
    • poor performance; or
    • unauthorized secondary employment.

    You usually issue a warning letter to the employee after meeting with them to discuss the problem. Following this process can help resolve issues before the situation becomes worse.
    There is no legal requirement to provide formal written warnings or a certain number of warnings. However, to determine whether an employee was unfairly dismissed, the Labor Court will consider if the employee was:

    • warned about performance or conduct issues, and
    • provided a reasonable opportunity to improve their performance and conduct.

    Theoretically a verbal warning in presence of a supporting person is allowed, but it is not recommendable. Because in court it has less evidential value for receiving and the observance of formal requirements (censure and warning function).
    Please note that warnings may not be appropriate in some cases of serious misconduct. The immediate termination of employment may be necessary in such circumstances.
    The warning shall be effective for a period of not exceeding one year from the date the employee commits the offense.
    Following is our suggested proceeding for the formal warning of an employee:

     

    Step 1: define and consider the problem

    Firstly, identify the performance or conduct issue. Think about the seriousness and duration of the problem and what kind of actions you want to take to address it.

    If applicable, review policy or contract article applicable to issue (e.g. Sick Leave; Leave of Absence; Corrective Action/Discipline/Dismissal.)

     

    Step 2: meet the employee

    The following meeting with the employee is important to:

    • identify and resolve issues before the situation gets worse;
    • explain your expectations of the employee; and
    • agree on solutions to improve the situation.

    It is best practice to let the employee know the purpose of the meeting in advance so they can adequately prepare for the meeting.

    Always document the details of any performance or conduct meeting held with an employee.

     

    Step 3: prepare the letter of warning

    The warning letter should include:

    • concrete and precise description of the performance or conduct issue (the employee must recognize it);
    • warning that the employer will determined the contract or other consequences if the employee does not change his behavior;
    • what has been discussed with the employee about the issue;
    • a plan for the steps the employee needs to take; and
    • a reasonable timeframe in which the changes or improvements need to take place.

     

    Step 4: provide the employee with the warning letter

    The warning letter should be provided via post or personally.

    Ensure that the employee gets the warning letter and if handed over personally, document the details of providing the letter (the time, the date, who was there etc.).

    Ask the employee to sign a copy of the letter and return it to you for your records (please note that employees are not required by law to sign a copy of the letter) and keep a copy of the letter for your records.

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  6. What Happens with my Non-B Visa if my Employment Ends?

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    A common question that we are frequently asked by clients who work in Thailand as foreigners and under a work permit, is whether their visa will expire if an employment in Thailand ends.

    In that respect it should be noted that although work permits are usually granted for a one-year term, their validity will be tied to the validity of the foreign national’s visa at that time. Therefore, a typical one year visa extension will expire within seven days after the work permit expires. However, a regular non-immigrant B visa (with 1 year duration but only 3 months permissions to stay) will not expire in this way but continue to be valid until its normal expiration date.

    After the visa is extended, the work permit will also be extended up to the expiration date of the current valid visa. Please note that work permits are usually extended every year.

    Please feel free to contact us if you have any inquiries regarding visa and work permit matters.