Update: The changes listed in this article are now in force as of 5 May 2019.
Thailand’s National Legislative Assembly (NLA) approved a draft amendment to the Labor Protection Act that increases maternity leave, personal leave and statutory severance pay. The draft is still being reviewed and will be resubmitted to the NLA for a second reading. The amendments are expected to come into effect sometime in 2019, at a date yet to be determined, subject to publication in the Royal Gazette.
Key Changes
The draft includes the following key amendments:
- Maternity leave: The draft amendment increases maternity leave from 90 days to 98 days, including prenatal care. The law currently mandates the employer pay full salary for 45 days after which social security pays the remaining 45 days. The draft is not clear whether the additional eight days will be unpaid, covered by the employer or covered by social security.
- Personal days: Personal days are currently not required but can be granted in work rules with or without pay. The draft requires employers to grant employees a minimum of three paid personal days a year moving forward.
- Severance pay: Severance pay for employees with more than 20 years of service is increased from 300 days to 400 days at the employee’s latest wage rate. The current 300 days’ pay will continue to apply for employees with at least 10, but less than 20, years of service.
- Change of employer: In the event of a business change following a transfer or a merger with another business entity, the employee’s consent will be required to transfer the employee’s employment contract. The new employer must assume all existing rights and obligations of the previous employer. If the employee does not consent, the employment contract is terminated, and the employee is entitled to severance pay based on his or her period of service.
- Relocation of the employer: Employers will be required to post an announcement at the current workplace a minimum of 30 days prior to relocation of the operations or employees. If the employer fails to comply with the 30 days’ notice requirement, employees who refuse to move would be terminated and entitled to an additional 30 days’ pay in lieu of notice. If the employee refuses the relocation, the employment will be considered terminated as of the date of relocation, and the employee will be entitled to severance pay based on his or her period of service.
Next steps
Due to the increase of severance pay entitlement, employers should reserve appropriate funds to cover employees who have more than 20 years of service. Employers should monitor the implementation of the bill and review their internal rules and policies to ensure compliance with all communication and leave policies.