On May 5, 2019, amendments to Thailand’s Labour Protection Act (LPA) introduced changes to a variety of employer obligations to enhance employee protection, including statutory severance pay, maternity leave, and paid necessary business leave, among others. It also set out key amendments to the law governing workplace relocation, and employers should be sure to familiarize themselves with these new provisions due to their potential impact on business operational decisions in future.
Under the old law, relocation to another existing work location of the employer, such as to another branch, would not fall within the scope of workplace relocation (Section 120 of the LPA), which requires employee consent, but would instead constitute a change in employment conditions. However, the recent LPA amendment has broadened the scope of the workplace relocation provision, and Section 120 now applies “where an employer relocates [an employee’s] current workplace to a new establishment, or to another of its existing work locations.”
While the old law was silent on the manner in which an employer must inform employees about a relocation, the newly amended version states that, in cases of relocation, the employer’s notification must fulfill the following requirements:
While the term “relocation” is not explicitly defined in law, the Supreme Court has held that a change in the workplace to a new establishment, as well as a gradual move of business operations to another location until the current workplace is closed, constitutes relocation. Additionally, where a workplace is partially relocated, in order to constitute relocation, the relevant work unit must be relocated entirely from the current workplace (that is, the department must no longer perform any business operations in the current workplace after the relocation). However, a shift of personnel, such as from one store to another store, was not considered relocation.
While the judgements making these points were issued prior to the amendment, the courts are expected to continue to apply the same legal reasoning under the new law, with the addition that a change in workplace to an already existing branch or office will now also be seen as falling within the scope of workplace relocation.
Moreover, the law provides that if an employee does not wish to relocate to the new workplace due to significant impact on the employee or their family, the employee has a duty to provide written notification to the employer within 30 days of the employer’s relocation announcement (or 30 days from the date of relocation itself, if the employer failed to make an announcement). If the employee has duly notified the employer, within the permitted time period, that he or she does not wish to relocate to the new place of business, the employer must pay the employee special severance payments equivalent to statutory severance pay. This ranges from 30 days to 400 days, depending on the length of the employee’s service with the employer.
In addition, if the employer failed to give the required advance notice of relocation, the employee will also be entitled to special severance pay in lieu of advance notice, at a rate not less than the employee’s last rate of wages, for 30 days (or, for an employee who works on a piece rate basis, not less than wages for the last 30 days). All these payments must be made within seven days of the relocation date. Employees who agree to relocate to the new workplace, regardless of whether an announcement was made, will not be entitled to special severance pay or special severance pay in lieu of advance notice.
The law does not provide a definitive list of circumstances that would constitute a significant impact on the daily life of an employee, as such assessment is based on the specific facts of each case. In general however, based on previous rulings, the Supreme Court will consider changes to costs and commuting time, as well as to the employee’s health and their family life.
A case that is illustrative of the court’s holistic approach involved a workplace relocation that increased the commute time for two employees by approximately one hour. In an attempt to alleviate the inconvenience, the employer arranged for paid accommodation for the two employees, as well as transportation to and from work. Despite these efforts, the court ruled in favor of the employees, ruling that they were entitled to special severance pay. Instrumental to the court’s decision was the fact that one of the employees had a duty to care for her husband, who suffered from a neurological disease, and the other employee was responsible for taking her child to school while also caring for her aging mother. The employer’s measures therefore did not alleviate the substantial impact of the relocation on the employees’ lives. The employees both had familial obligations, and the longer commute to the new workplace meant they had less time at home. Therefore, in light of their circumstances, the relocation was found to have a significant impact on their daily life.
Other reasons accepted by the court as having significant impact on an employee’s daily life include the need to find a new place to live, having to transfer a child to a different school, and being unable to make it on time to another job, resulting in the loss of extra income each month.
However, pursuant to the amendments, if the employer does not agree with the employee’s reason(s) for refusing to relocate, the employer is entitled to lodge a complaint with the Labour Welfare Committee within 30 days of receiving written notice from the employee. The committee has the discretion to decide whether the employee will be entitled to special severance pay, special severance pay in lieu of advance notice, or both, as the case may be.
Any employer who violates or fails to comply with the law governing workplace relocation, or who fails to make the requisite payments to an employee who does not wish to relocate, will be penalized with imprisonment for up to six months, a fine of up to THB 100,000, or both.
These new stringent legal requirements, coupled with the attendant penalties for failure to comply, render it essential for employers to adhere to the new laws if they intend to relocate a workplace. Prudent employers considering whether to relocate a workplace should take these factors, and their potentially substantial financial impact, into account as part of their decision making process.
This article was originally published in the Bangkok Post and is reproduced here with permission and thanks. The original story can be viewed on the Bangkok Post website.