Tax & Legal News Flash Issue 25 - KPMG Global
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Tax & Legal News Flash Issue 25

Tax & Legal News Flash Issue 25

New Law to amend the Labor Protection Act


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New Law to amend the Labor Protection Act

New Law to amend the Labor Protection Act

Effective from 1 September 2017, the Labor Protection Act (No. 6) has been issued to amend the Labor Protection Act (“LPA”). 


The key amendments are as follows:

Work Rules

According to the last amendment to the LPA, an employer is no longer required to file a copy of the work rules with local labor officer. 


However, upon having 10 or more employees, an employer is still required to have the work rules with minimum contents as required by the LPA such as work time, leave, overtime and normal wage payment, disciplinary actions, employment termination, severance pay, etc. The work rules must be posted at the employees’ work place.


Under the new law, an announcement of the work rules can also be done by electronic means apart from posting them at the work place.

Employment termination due to retirement

Before the new law, several Supreme Court’s judgments have interpreted that a retirement is normally considered as employment termination by an employer, especially where the retirement age is solely fixed by the employer, and therefore the employer must be subject to employment termination liabilities.


According to the new law, it clearly provides that the retirement which requires an employer to pay severance pay includes the following cases:

  • Retirement age is solely determined by an employer, or
  • Retirement age is mutually agreed by both employer and employee, or 
  • If retirement age is not determined or determined at the age of more than 60 years, an employee whose age is 60 years or more can choose to retire by declaring his intention to the employer.


Apart from the work rules and retirement issues, the new law also provides some criteria to fix minimum wage rate and provides revision of some punishment determination.

KPMG Comments

The law does not require an employer to file the work rules with the labor officer. So, without the labor official review, the employer has to ensure that the work rules comply with the labor law. 


Illegal work rules (if any) could affect the court’s consideration, and the employer’s reputation, in case of dispute. Therefore, in preparing and amending the work rules, apart from corporate policy, the employer should also seek a local lawyer’s advice and comments.


Besides, with regard to the retirement issue, the employers should revisit their retirement policy, work rules, employment contracts and any other document related to the retirement if they should be made and/or amended to comply with the new law.


In addition, for some specific cases such as the case that an employer wishes to re-employ the employee after retirement, legal consequence upon the end of additional employment term after the retirement should also be taken into consideration.


We welcome any opportunity to discuss the relevance of the above matters to your business.


KPMG in Thailand’s Legal Services Team offers a wide range of practical legal solutions. For more information, please visit Legal Services.

© 2019 KPMG Phoomchai Tax Ltd., a Thailand limited liability company and a member firm of the KPMG network of independent member firms affiliated with KPMG International Cooperative (“KPMG International”), a Swiss entity. All rights reserved.

KPMG International Cooperative (“KPMG International”) is a Swiss entity.  Member firms of the KPMG network of independent firms are affiliated with KPMG International. KPMG International provides no client services. No member firm has any authority to obligate or bind KPMG International or any other member firm vis-à-vis third parties, nor does KPMG International have any such authority to obligate or bind any member firm.

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