Workplace safety in Thailand is regulated mainly by the Occupational Safety, Health and Environment Act B.E. 2554 (2011) (the "Act"), which came into effect in 2011. The Act imposes a series of general requirements for all employers to follow, including obligations to arrange safety training for all employees and to ensure that personal safety equipment are worn by employees before starting work. Businesses in certain industries, such as construction mining, transportation and electricity, are further regulated by specific Ministerial Regulations with additional obligations on employers e.g. appointment of safety officers, establishment of a safety committee, submission of safety officers report and provision of specialized training for employees who will be conducting such works.
Employers who fail to comply with the various legal requirements under the Act could be subject to a maximum of one year imprisonment and/or a fine of THB 400,000.
Due to the various legal requirements stipulated above, employers are usually faced with financial obstacles when attempting to comply with all of the legal requirements for their businesses. In light of this, the Act also provides financial assistance to help rectify non-compliance as well as help for employers to comply with the various obligations within the Act through the Occupational Safety, Health, and Environment fund ("OSHE Fund"), which comprises:
- advance payment for the Department of Labour Protection and Welfare to use to rectify unsafe conditions found in the workplace of employers. Such advance payment is granted upon a request from the Department of Labour Protection and Welfare.Once the rectification is completed, the employer is required to pay back the money to the Department of Labour Protection and Welfare who will then return it to the OSHE Fund; and more importantly
- loans for employers to rectify unsafe conditions in the workplace or to use with the purpose to prevent accidents or diseases that could arise as a result of business operations ("OSHE Loan"). Conditions of the OSHE Loan are summarized below:
- To receive the OSHE Loan, the employer must detail the objective and amount of the OSHE Loan anticipated as well as its expenses and operation plans, the benefits to the workplace and its plan for repayment and collateral;
- Types of collateral allowed include bank guarantees, or any other collateral specified by the Fund committee;
- An OSHE Loan provided per employer must not exceed THB 2 million, or an amount as approved by the OSHE Fund committee;
- There is a grace period, not exceeding one year, whereby the principal needs not be paid. However, interest is still required to be paid monthly;
- The maximum term of the OSHE Loan, including the grace period, shall be for a period of five years, with an interest rate of two percent per annum, payable on a monthly basis;
- If the employer fails to proceed in accordance with the objective or the operation plans previously submitted to the official, or fails to operate according to the objective and plans provided within 30 days from the date of receiving the OSHE Loan, the employer would be considered as breaching the OSHE Loan agreement and could be fined 7.5 percent of the borrowed amount from the date of the breach; and
- If the employer fails to repay all the OSHE Loan amount within 60 of the cessation date of OSHE Loan agreement, the OSHE Fund committee shall notify the employer in writing. The employer must pay back the OSHE Loan with interest within 30 days after receiving a written notice, together with an additional fine.
In the year 2015, the OSHE Fund committee approved three OSHE Loans for three business operators for improvement of working conditions and working environment to increase the quality of the health of employees and people in the nearby community. It is expected that this OSHE Loan can prove to be one of the best available options for employers to be better equipped financially in complying with the requirements under the Act. Consequently, it is further expected that the OSHE Loan will help mitigate any risks of accidents, injuries or damages for the people working in these business, as well as minimize risks that a company and its directors may face from failure to comply with the requirements under the Act. However, its real success is yet remain to be seen. Some critics point out that the loan conditions, such as a requirement for an employer to provide a loan collateral, could in effect prevent an employer from securing this loan since they may not have sufficient money to secure such collateral in the first place.