Thailand ups ante on foreign labour laws

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A new Emergency Decree on Managing the Work of Aliens (2017), which came into force immediately on 23 June 2017, substantially increases certain penalties for various offences relating to foreign employees working in Thailand. For example, an employer hiring a foreigner without a work permit is now subject to a fine of from 400,000 baht (US$11,800) to 800,000 baht per foreigner – increased from a fine of from 10,000 baht to 100,000 baht per foreigner.

Since the decree came into force on 23 June 2017, many employers of migrant workers have criticized it for adversely affecting their day-to-day business by making them think twice whether to hire migrant workers due to a chance they may be held liable to the new harsher penalties. Similarly, migrant workers themselves were also worried that they could be liable to harsher penalties and many decided to leave Thailand altogether. This in turn caused unexpected panic and potential labour shortages in businesses that rely heavily on migrant workers.

In order to address the crisis and allow employers, foreign employees and also state officials sufficient time to prepare, and to proceed with necessary steps to comply with the requirements under the decree, while at the same time limiting adverse impacts to the economy and society, on 4 July 2017, the National Council for Peace and Order (NCPO) invoked section 44 of the Interim Constitution and issued the NCPO Order Number 33/2560 Re: Temporary Measures to Rectify the Problems in Managing the Work of Aliens.

This NCPO order will be effective retroactively from 23 June 2017, the date when the initial decree became effective. The following matters covered under the NCPO order will be effective from 23 June 2017:

  • Employers and foreign employees must quickly comply with the decree, before 1 January 2018 according to rules, conditions and procedures which the Ministry of Labour must subsequently specify.
  • State officials who are involved with the implementation of the decree or the NCPO order are prohibited from abusing their power or acting, or failing to act, for the purpose of obtaining benefits or properties for the officials themselves, or for others.
  • The Ministry of Labour must proceed to amend or revise existing laws regarding managing the work of aliens for proposing to the Cabinet within 120 days from 23 June 2017 (i.e. by 20 October 2017). During the process of amendment and revision, the Ministry of Labour will also conduct a hearing from relevant parties and consider their opinions.

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Business Law Digest is compiled with the assistance of Baker McKenzie. Readers should not act on this information without seeking professional legal advice. You can contact Baker McKenzie by emailing: Danian Zhang at danian.zhang@bakermckenzie.com, or for general enquiries contact Anand Ramaswamy at anand.ramaswamy@bakermckenzie.com