The National Legislative Assembly of Thailand has just approved the latest amendment of the Thai Labor Protection Act on 13 December 2018.

Detail of the key changes are as follows:

OLD LAW

NEW LAW

REMARK

Maternity leave

90 days

98 days

Maternity leave entitlements are now split into two separate periods of leave, i.e. prenatal and postnatal.

Personal leave

A number of days will be agreed and specified in work rules whether with or without pay.

Not less than working 3 days with pay.

Personal leave is sometimes referred to as 'business leave', which employers may offer employers to renew driving licenses, house registration and the like.

Transfer of employment

Change of employer (business entity) due toa change, transfer or merger with another business entity - without the employee's consent.

Change of employer (business entity) due toa change, transfer or merger with another business entity - with the employee's consent.

Consent of the employee is now required upon a transfer of employment (to new employer), for instance in the event of a merger between two companies, which creates a new company.

Maximum severance pay

Maximum wage rate of 300 days for more than 10 years length of service.

Maximum wage rate of 400 days for more than 20 years length of service.

Relocation of the employer's place of business

If the employer is to relocate to the NEW place of business, which materially affects the ordinary course of living of the employee, and the employee is not willing to be relocated, the employment contract shall be deemed to be terminated on the date of relocation.

Additionally, the employee will be entitled to the amount equivalent to severance pay to be paid upon termination of employment.

If the employer is to relocate to the NEW place of business, which materially affects the ordinary course of living of the employee, and the employee is not willing to be relocated, the employment contract shall be deemed to be terminated on the date of relocation.

This entitlement will also apply to employees in circumstances where the employer wishes to relocate the employee to another existing branch office.

The scope of this law has been expanded, such that relocating employees from one office in Thailand to another existing office in country will benefit from choosing to accept the relocation, or to terminate its employment contract and be entitled to severance pay according to the law.

The changes regarding the transfer of employment as a result of a merger and acquisition (M&A) is likely to have a significant impact, since the employee's consent previously was not required, if the newly established company (as a result of the M&A) accepts both the rights and duties of the employee. However, according to the new amendment, the employee's consent will be required and if the employee refuses to consent, the employment contract shall be terminated and the employee will be entitled to severance pay based on his period of service in accordance to the law.

The increase to the maximum severance pay entitlements could cause SME's and even large international business to reserve substantial funds to cover those employees whose length of service is more than 20 years and will retire shortly.

With regard to the relocation of the employer's place of business, as a result of the new amendment, if the employer is to relocate to another existing place of business but it materially affects the ordinary course of living of the employee, the employee will be able to inform the employer of his desire not to relocate to the new or another existing place of business and the employment contract shall be deemed to be terminated on the date of relocation. As a result, the employee will be entitled to the amount equivalent to severance pay to be paid upon termination of employment.

The National Legislative Assembly has announced the new entitlements shall be effective from 24 February 2019, subject to the publication of the law in the Royal Gazette. This means that the effective date may be delayed.