Thai Labor law - advice, please

[Berry]

I seek some advice on my employment contract.

I was hired by a New Zealand firm in late 2007 to run a Joint Venture , in a position of a Managing Director , between that New Zealand firm (60%) and a Thailand firm(40%). My employment commenced in Jan 2008. I'm a Malaysian and was asked to be based in Bangkok but my family ( wife and 3 children) was still in Malaysia. I was also given a reasonable apartment and a company car.

In May 2008, the employment contract from the NZ firm was replaced with a similar contract by the JV to be renewed on a yearly basis.

The JV produces equipment to exported to Australia and NZ (main markets) and also to Middle East and India. My scope was initially to manage the plant to meet the export demand and work on new product development but later also to expand sales and marketing into ASEAN and Sri Lanka.

But demand from Australia and NZ started to dwindle in August 2008 and after the global economic crises struck, the demand was even lower leaving the JV with abundant stock of raw material and finished goods.

The issue with this company is low level of sales but I was only responsible for 7% of the sales ( ASEAN and Sri Lanka ) but the NZ company was responsible for the remainder of the sales ( Australia/NZ/Middle East/India)

In May 6th this year, the Board of Directors gave me a new employment contract dated May 1, 2009 and it was stated that it would be for a period of 3 months and will be renewable based on a list of achievable items by July 09 which is still in progress as I write.

Last week the CEO of the NZ company called me and said that 'things were not working out well between us and suggested I start looking at other employment alternatives' and we discussed the possibility of my being based in Kuala Lumpur, Malaysia and focusing on developing sales for ASEAN and Sri Lanka market. . This was verbal but yesterday I found out that my apartment contract ( contractually to end in Feb 2010) was to be terminated as of end of August 09.

All these leads me to one conclusion : my employment will not be renewed after July 2009.

I believe this will be a case of unfair termination as the company owners are blaming me entirely for the poor financial performance of the company even though I was only responsible for 7% of the sales. ( I was specifically asked not to get involved in sales in the other regions but only support them if an order came to the Thailand plant (the JV) )

What is my recourse here ?

I have worked since mid Jan 2008 till now and that means I do fall between the 1-3 year category, and so, am I entitled to the compensation of the last 90 days wages ? If so, what is defined by wages here ? I currently get a basic salary plus and overseas posting allowance.

Can I deem this as unfair termination as I am made redundant because some other party did not fulfill their sales obligation and that was totally beyond my control ?

Do I need to get a Thai lawyer who is well versed in the Thai Labour Law ?

Please assist me as I have never been in this situation before.

[Scott]

The very best of luck to you in this situation. It sounds complicated and you might want to try and find a law firm with expat lawyers. You may be able to file a suit, should they not give you a satisfactory settlement, in either or both Thailand and New Zeland.

Without any direct solicitation of a particular lawsuit, maybe someone who knows of a good law firm could PM you with the information.

Also, please keep us posted as to how this is developing, since it may be helpful to a lot of readers.

[Berry]

Thanks. Do you have anyone in mind ?

[PeaceBlondie]

Moved from Teaching Forum to Thai Visas and Work Permits

[ubonjoe]

A lot will depend upon your employment contract.

Your case is one that may require legal assistance it comes down to you being terminated.

See page 59 of this guide:BOI_business_guide.pdf

[lopburi3]

I would expect the "Jobs" forum to probably be the best - there is no visa or work permit question.

[Lite Beer]

Yes. It probably will get more response here.

[Abrak]

Berry, I dont think you have an argument for unfair dismissal. And before you accuse them you should at least consider this. They will simply argue (and it may well actually be) that the point of the contract was that need to keep costs in line with sales. They are not making any judgement call on you and they fully realize that good sales were out of your control (they out of nearly everybody's at the moment) but lower sales does mean they have to lower costs.

(If you do have a case so do 15.3m Chinese manufacturing workers who each can argue that 'I am being blamed for the poor performance of the company even though I account for 0.001% of sales and claim unfair dismissal because it was due to bursting of the US asset bubble which was out of my control.)

The argument you do have in your favour I think is that by signing your new contract you dont terminate your employment at the company started under your old contract. So if they try that then go to a lawyer. I think its basic wages.

Edited June 12, 2009 by Abrak

[Berry]

Berry, I dont think you have an argument for unfair dismissal. And before you accuse them you should at least consider this. They will simply argue (and it may well actually be) that the point of the contract was that need to keep costs in line with sales. They are not making any judgement call on you and they fully realize that good sales were out of your control (they out of nearly everybody's at the moment) but lower sales does mean they have to lower costs.

(If you do have a case so do 15.3m Chinese manufacturing workers who each can argue that 'I am being blamed for the poor performance of the company even though I account for 0.001% of sales and claim unfair dismissal because it was due to bursting of the US asset bubble which was out of my control.)

The argument you do have in your favour I think is that by signing your new contract you dont terminate your employment at the company started under your old contract. So if they try that then go to a lawyer. I think its basic wages.

Dear Abrak,

So what you are saying is that I can only be compensated with 3 months wages as per Thai Labour Law ?

Berry

[Arkady]

I am not a labour lawyer but my sense is that you would not have a prima facie case of unfair dismissal. Thais have been reinstated in their jobs after they had been falsely accused of something and dismissed, e.g. the news editor of the Bangkok Post who was reinstated after being fired as a result of political pressure from Thaksin for reporting that there were cracks on the runway at Suwannaphumi - after the coup he was reinstated by the court on the grounds that what he reported was in fact true. A general manager being dismissed for poor financial performance of the operation, even he is not in charge of sales and economic conditions are tough, would probably be regarded as an acceptable business decision, however unfortunate that is for the individual. There might be a chance to contest a technical infringement, if the owners have not abided by the staff rules laid down by the joint venture company or, if there are no staff rules, or if the rules don't comply with Ministry of Labour regulations. There have to be staff rules and these have to provide for discipliniary procedures, including written warnings and time to improve performance after the written warnings. However, I think the award in these circumstances would be capped at a low monthly amount and, as MD, you might be held responsible if the staff rules are inadequate.

I am sure you are entitled under Thai labour law to count your employment under the original employment contract from January 2008 for the purposes of severance pay. I beleive the Labour Court would support you in arguing there was continuous employment under effectively the same employer. Fortunately your employer seems more reasonable than others that might just fly in and fire you at a hotel and send the contents of your desk over to you later. To me it seems that your best bet would be to negotiate the best severance package you can, if they will not offer you a position in Malaysia. They probably don't want morale to be damaged by an acrimonious departure and you also don't want them to go out of their way to slag you off in future. Three months payment of salary, rent and all expat perks should be the minimum but you can ask them for six due to the problems involved in two relocations and poor employment market etc. In the worst case, if they try to refuse the minimum of three months, you can calmly inform them that is not acceptable under Thai law and you will have no choice but to take the case to the Labour Ministry, if they insist on violating Thai law. If you have to do that, the Labour Ministry will make trouble for the joint venture, as they will send a team to interview staff and examine labour conditions in the company and the staff rules. They will also try to persuade the company to pay the severance pay according to the law and in the last resort forward the case to the Labour Court which will take months but the joint venture would in all probability lose, creating bad publicity amongst staff and business partners.

Edited June 12, 2009 by Arkady

[Digger]

Sounds to me at least that your operating under a fixed contract which you signed for one year - are you sure your even *due* any compensation? at best, sounds like you may have a claim of one month for lack of notice but it will depend upon the wording of your employment agreement.

I would imagine the "JV" to which you refer has already sought advice behind the scenes and is probably not far off the ball - you have a 1 year contract and they are electing NOT to renew it - same as you could elect NOT to renew it.

You might want to go and see a lawyer specialsing in employment issues and show them your contract and the original one - They may be able to determine that the original contract stands in term of severence - i.e thats the date you first started working for that organisation - however unless it states it implicitly (like commencement of service is deemed as XXX date), you may be out of luck.

[jrbkk64]

Your employment will be considered "continous" eventhough there are several contracts. You have been employed > 1year and < 3 years. This entitles you to one month notice or payment in lieu of notice and 3 months severance pay. You could choose to sue them for unfair dismissal but I would say it would not be worth it as the maxixmum you will get out of that would be one month for every year employment. Good luck.

[Berry]

Your employment will be considered "continous" eventhough there are several contracts. You have been employed > 1year and < 3 years. This entitles you to one month notice or payment in lieu of notice and 3 months severance pay. You could choose to sue them for unfair dismissal but I would say it would not be worth it as the maxixmum you will get out of that would be one month for every year employment. Good luck.

Thank you for the advice ! I think they know that too and they are trying to negotiate that down !

[HJK]

Berry,

Whatever you do take proper legal advice, do not trust anything that has not been told to you by a Thai lawyer. Thai law seems to be very peculiar. With an unfair dismissal case the more senior your position the higher your rate of compensation may be. Contrary to a previous post on this thread there is no upper cap on compensation for damages. It is totally up to the judge. I have a friend who is a senior project manager for a firm and he is suing for several years salary in damages on his claim for unfair dismissal. I also have a lawsuit pending claiming several years in damages as compensation for unlawful dismissal.It seems like you are in a senior position and you would be well advised to take proper legal advise .

I read of a claim by a staff member in a company caught stealing who was sacked on the spot without compensation. That person ended up with 18 monbths pay in compensation and severance all because the staff member was not sacked correctly

Just remember the company has disrupted your life if they fire you, uprooted you from Malaysia to come here and work, you would have expected lengthy employment with the company. This is not in the same category as a language teacher who comes to Thailand looking for work, you would be in a much stronger position to win a damages claim on top of severance due. Just remember don't sign anything if they lay you off and do take proper legal advice and good luck

[Berry]

Berry,

Whatever you do take proper legal advice, do not trust anything that has not been told to you by a Thai lawyer. Thai law seems to be very peculiar. With an unfair dismissal case the more senior your position the higher your rate of compensation may be. Contrary to a previous post on this thread there is no upper cap on compensation for damages. It is totally up to the judge. I have a friend who is a senior project manager for a firm and he is suing for several years salary in damages on his claim for unfair dismissal. I also have a lawsuit pending claiming several years in damages as compensation for unlawful dismissal.It seems like you are in a senior position and you would be well advised to take proper legal advise .

I read of a claim by a staff member in a company caught stealing who was sacked on the spot without compensation. That person ended up with 18 monbths pay in compensation and severance all because the staff member was not sacked correctly

Just remember the company has disrupted your life if they fire you, uprooted you from Malaysia to come here and work, you would have expected lengthy employment with the company. This is not in the same category as a language teacher who comes to Thailand looking for work, you would be in a much stronger position to win a damages claim on top of severance due. Just remember don't sign anything if they lay you off and do take proper legal advice and good luck

HJK, Thank you for the advice. By any chance, do you know of any lawyer that could represent me ? I may just need to use him/her.

[HJK]

Berry,

I do have a good lawyer who I think could tell you quickly if you have a case or not. I would prefer not to put his name in a public forum but if you could leave an email address I can pass on his contact details and other info.

[Berry]

Berry,

I do have a good lawyer who I think could tell you quickly if you have a case or not. I would prefer not to put his name in a public forum but if you could leave an email address I can pass on his contact details and other info.

Thanks HJK ! I can be contacted at [email protected]