April 29, 2011

A Recent Amendment to Thai Labor Law Relating to Outsourcing

Employment & Industrial Relations Law, International Bar Association Legal Practice Division

Outsourcing has long been an alternative option for businesses in Thailand seeking to avoid the financial burden placed upon them by Thai labour law, particularly the Labour Protection Act B.E. 2541 (1998), which provides employees with minimum rights.  As this law is considered to be a law relating to public order and good morals, it is not possible for employers to provide any less than the minimum standard, even with the employees’ consent.  In addition, many Thai subsidiary companies are subject to controls on headcount of employees imposed by the parent company, and they use outsourced employees as a solution to the problem of workforce shortages.

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