Workers should study labour law
Baht-led bankruptcies could force lay-offs
CHAROEN KITTIKANYA PHUSADEE ARUNMAS
Lawyers are urging employees to thoroughly study the Labour Protection Act to claim compensation if they are abruptly laid off or unfairly dismissed by companies blaming the strong baht for their business problems.
The abrupt closure last week of a huge Samut Prakan textile factory sparked growing concerns that others will follow suit, as orders have dropped and the baht continues to strengthen.
Workers who are unfairly dismissed or made redundant without proper compensation should seek free consultation from volunteer lawyers at the Lawyers Council of Thailand, says member Charin Chaikulpipat.
Typically, the Lawyers Council provides free services only for the poor and those who receive unfair treatment, such as the 5,000 workers at Thai Silp South East Asia Import Export Co who lost their jobs without warning.
Following a brief reopening, the debt-plagued Thai Silp announced a few days ago that it would close down on Aug 7 after failing to secure new loans.
The company reportedly has debts worth 1.4 billion baht. In general, creditors have the right to go through legal channels to force the company's assets to be sold to repay its debts. In such cases, private creditors would be the first to receive money.
The remaining cash, if there exists any, goes to repay debts owed to the government, such as taxes. Workers' rights come last.
According to Mr Charin, more than 200 volunteer lawyers are ready to lend a helping hand to workers if they seek help and it can be proven that management treated them unfairly.
According to the Labour Protection Act 1998, employers can terminate employment even if workers have done nothing wrong, but they must pay severance pay as stipulated by the Act.
Employees who have worked for 120 days but less than one year are entitled to receive one month of wages.
Those who have worked for one year but less than three years should get three months' pay, while those who have worked for three years but less than six years are entitled to six months' of salary. Those who have worked six to 10 years are entitled to eight months' pay, and those with more than 10 years are entitled to 10 months of salary.
In case an employer relocates the business to another place and it significantly affects the living conditions of an employee or his or her family, the employer should notify the employee at least 30 days prior to the date of relocation.
If the employee refuses to go to work in the new location, he or she can terminate the contract of employment and receive special severance pay of at least 50% of the rate of severance pay based on how long he or she has worked at the company.
If the employer fails to notify the employees in advance regarding relocation, it is obliged to pay special severance pay in lieu of advance notice at a rate equivalent to the employee's last rate of wages for 30 days.
In case an employer contemplates lay-offs as a result of upgrades in technology, management must notify the Labour Inspector and the employees at least 60 days before the date of termination.
If an employer fails to notify an employee in advance, or fails to give proper notice, the employee is owed another two months' pay.
If an employer fails to pay compensation, the employees could file a complaint to the Labour Inspector of the locality where they work.
According to an official of the Labour Protection and Welfare Department, if an employer denies payment or cannot pay within the agreed deadline mandated by the labour inspector, employees can seek assistance from the Employee Welfare Fund and the unemployment insurance fund under the Social Security Fund.
According to the Labour Protection Act, employees who have worked from 120 days to six years will be entitled to 30 times the minimum wage. Those who have worked more than six years would receive 60 times the minimum wage, she said.
But the official said employees are also entitled to payments such as overtime and advance notices at similar rates.
According to the Business Development Department, 760 companies with registered capital of 1.6 billion baht informed the department they would be liquidated last year. Of those, 752 companies with registered capital of 1.74 billion baht were dissolved and 34 with registered capital of 71.7 million baht were declared bankrupt.
Bangkok Post July 23, 2007