Can a company in Thailand reduce a foreigners salary?

[dbrenn]

The Labour Protection Act 1998, posted earlier by Ubonjoe, takes precedence over any contract that an employee may have signed. Contracts are always overruled by the Law, if they are not in agreement with it. An employer is not allowed to reduce salary or benefits, and the employee can go to the Labour Court and get a court order for reinstatement if this happens.

I manage a company that employs 50 people, and there are some lazy individuals that we would dearly like to impose reductions on, or demote, but it's not allowed. The only way to reduce a salary is for the employee to voluntarily resign, and then sign a new contract, but even that could be viewed by the Labour Court as a constructive dismissal should the employee claim that the decision to resign was made under duress.

Edited March 23, 2016 by dbrenn

[Bobotie]

In this case there is no contract, just a letter of offer, with the salary on it.

It was my understanding that this was binding as a contract. Further reading I have found that a company that does not give a contract is bound by normal Thai laws.

I just want to know if it is legal to lower a salary, as BritTim states, it would seem it would be a way to get people to quit, or sack them for a lower severance pay.

Contract or not, they are still bound by labour laws and the employee is protected under the same labour laws.

You have a letter stating your offer ? Are you working for them ?...if you are... they "technically" cant pay you a lower salary without renegotating your current T&Cs, but with that being said, all they have to say is they cant pay you the original amount due to "ecomomic" conditions, but have made an alternative offer to keep you employed which is then your call take it or leave it

So to answer your question, is it legal ?...yes it is if they are doing it as part of a renegotation or your T&Cs

Yes I have a letter signed with my package on it, which has never been paid in full since day one. My basic yes but the promised comms, never

Hold on...your getting into something different now...you said reduce salary, they havent reduced your salary, this is a dispute over commission, so what is the reason they give ?...

[Bobotie]

The WP doesnt come into it

Its a contractual thing

If a company tried that on me, i would walk, not a reputable company to work for simple

Of course a company can reduce your salary. No matter your contract, you can be terminated. Offering to keep you on at a reduced recompense may be better than termination and allow them to legally reduce your salary.

This is the reason I started the thread. It was my understanding that a company cannot just lower your salary without both parties agreeing to it

Per your previous posts...they havent lowered your salary so the premise of your thread is incorrect anyway....yours is a dispute over commission payments

[jmccarty]

They do need you to agree in writing. If you don't they can retrench (or whatever the local variant is) you and pay you a severance. Or, continue to employ you on the same salary (then look for a way to fire you with no severance). They can do this to Thais as well.

In the oil and gas industry in Thailand and globally, this is occurring to those companies that have not gone out of business with few exceptions.

Edited March 23, 2016 by jmccarty

[Bobotie]

They do need you to agree in writing. If you don't they can retrench (or whatever the local variant is) you and pay you a severance. Or, continue to employ you on the same salary (then look for a way to fire you with no severance). They can do this to Thais as well.

In the oil and gas industry in Thailand and globally, this is occurring to those companies that have not gone out of business with few exceptions.

If you read back, OP appears to have mistated his problem, his question has nothing to do with reducing salaries at all its a dispute of commission payments...he is being paid his agreed to base salary

[jmccarty]

They do need you to agree in writing. If you don't they can retrench (or whatever the local variant is) you and pay you a severance. Or, continue to employ you on the same salary (then look for a way to fire you with no severance). They can do this to Thais as well.

In the oil and gas industry in Thailand and globally, this is occurring to those companies that have not gone out of business with few exceptions.

If you read back, OP appears to have mistated his problem, his question has nothing to do with reducing salaries at all its a dispute of commission payments...he is being paid his agreed to base salary

My mistake! I did not have enough time to read the full thread.

[dbrenn]

They do need you to agree in writing. If you don't they can retrench (or whatever the local variant is) you and pay you a severance. Or, continue to employ you on the same salary (then look for a way to fire you with no severance). They can do this to Thais as well.

In the oil and gas industry in Thailand and globally, this is occurring to those companies that have not gone out of business with few exceptions.

If you read back, OP appears to have mistated his problem, his question has nothing to do with reducing salaries at all its a dispute of commission payments...he is being paid his agreed to base salary

My mistake! I did not have enough time to read the full thread.

Mine too ..

[Bobotie]

They do need you to agree in writing. If you don't they can retrench (or whatever the local variant is) you and pay you a severance. Or, continue to employ you on the same salary (then look for a way to fire you with no severance). They can do this to Thais as well.

In the oil and gas industry in Thailand and globally, this is occurring to those companies that have not gone out of business with few exceptions.

If you read back, OP appears to have mistated his problem, his question has nothing to do with reducing salaries at all its a dispute of commission payments...he is being paid his agreed to base salary

My mistake! I did not have enough time to read the full thread.

Mine too ..

I think the key is the OP stated a thread with a statement about reduced salaries and the advice he was given was correct based on that premise, but now the true story comes out, its not about salary reduction in the least, its a contractual dispute about commissions...not the same thing as an employer "cutting" ones salary..fact is his salary hasnt been cut

This is why getting terminology correct is so important

[Bigleg]

The Labour Protection Act 1998, posted earlier by Ubonjoe, takes precedence over any contract that an employee may have signed. Contracts are always overruled by the Law, if they are not in agreement with it. An employer is not allowed to reduce salary or benefits, and the employee can go to the Labour Court and get a court order for reinstatement if this happens.

I manage a company that employs 50 people, and there are some lazy individuals that we would dearly like to impose reductions on, or demote, but it's not allowed. The only way to reduce a salary is for the employee to voluntarily resign, and then sign a new contract, but even that could be viewed by the Labour Court as a constructive dismissal should the employee claim that the decision to resign was made under duress.

Thanks, very clear

[Bigleg]

In this case there is no contract, just a letter of offer, with the salary on it.

It was my understanding that this was binding as a contract. Further reading I have found that a company that does not give a contract is bound by normal Thai laws.

I just want to know if it is legal to lower a salary, as BritTim states, it would seem it would be a way to get people to quit, or sack them for a lower severance pay.

Contract or not, they are still bound by labour laws and the employee is protected under the same labour laws.

You have a letter stating your offer ? Are you working for them ?...if you are... they "technically" cant pay you a lower salary without renegotating your current T&Cs, but with that being said, all they have to say is they cant pay you the original amount due to "ecomomic" conditions, but have made an alternative offer to keep you employed which is then your call take it or leave it

So to answer your question, is it legal ?...yes it is if they are doing it as part of a renegotation or your T&Cs

Yes I have a letter signed with my package on it, which has never been paid in full since day one. My basic yes but the promised comms, never

Hold on...your getting into something different now...you said reduce salary, they havent reduced your salary, this is a dispute over commission, so what is the reason they give ?...

No, comms is another story, something I can do very little about. This post is exactly as I posted. About reducing basic not comms. There has been talk that soon the company will be reducing management's basic salaries and making it up with commission. Which in my experience never gets paid. So my OP is valid. Can they reduce your basic? Which it appears, they cannot.

[Bobotie]

In this case there is no contract, just a letter of offer, with the salary on it.

It was my understanding that this was binding as a contract. Further reading I have found that a company that does not give a contract is bound by normal Thai laws.

I just want to know if it is legal to lower a salary, as BritTim states, it would seem it would be a way to get people to quit, or sack them for a lower severance pay.

Contract or not, they are still bound by labour laws and the employee is protected under the same labour laws.

You have a letter stating your offer ? Are you working for them ?...if you are... they "technically" cant pay you a lower salary without renegotating your current T&Cs, but with that being said, all they have to say is they cant pay you the original amount due to "ecomomic" conditions, but have made an alternative offer to keep you employed which is then your call take it or leave it

So to answer your question, is it legal ?...yes it is if they are doing it as part of a renegotation or your T&Cs

Yes I have a letter signed with my package on it, which has never been paid in full since day one. My basic yes but the promised comms, never

Hold on...your getting into something different now...you said reduce salary, they havent reduced your salary, this is a dispute over commission, so what is the reason they give ?...

No, comms is another story, something I can do very little about. This post is exactly as I posted. About reducing basic not comms. There has been talk that soon the company will be reducing management's basic salaries and making it up with commission. Which in my experience never gets paid. So my OP is valid. Can they reduce your basic? Which it appears, they cannot.

And all the company needs to do is present you with new terms and conditions per another letter and either you take or leave it, so as we sit the company has done nothing wrong to date, if you reject the offer, you have effectively resigned so no serverance either applicable

But to answer your question...yes they can lower your basic if they do it properly

[Bigleg]

But to answer your question...yes they can lower your basic if they do it properly

Well that's contrary to what others have said, so I'm a little confused.

I was under the impression they couldn't force you to take a lower salary and if you refused they would have to sack you and pay severance, which is what others have stated here also This seems more likely the case under Thai law IMO

[Bobotie]

But to answer your question...yes they can lower your basic if they do it properly

Well that's contrary to what others have said, so I'm a little confused.

I was under the impression they couldn't force you to take a lower salary and if you refused they would have to sack you and pay severance, which is what others have stated here also This seems more likely the case under Thai law IMO

They are not forcing you to do anything, for what ever reasons they have got, they appear to be restructuring and what happens during restructuring somestimes is that peoples T&Cs are changed, it happens all over the world, they are not sacking you...they have made you new offer and its yours to take or not, if you decline the new contract, you have effectively resigned

If they do this and you believe you have a case, take it to the DOL, if the DOL tell you have no case, you are then welcome to retain a lawyer who will lodge a civil case against the company

Edited March 23, 2016 by Bobotie

[innerspace]

they have made you new offer and its yours to take or not, if you decline the new contract, you have effectively resigned

No, totally wrong.

If you decline the new offer the old one is as valid as ever. That's like saying if you decline a promotion you have resigned, same logic, equally wrong, never the case.

Based on this tot could raise prices of Internet to 1 million baht per month despite signed agreements and we have to pay or cancel? Not even in Thailand!

When a contract ends, renegotiation is optional, but mid term it's binding. And unless employment was time based, contracts not over until fired, quit or made redundant.

If you decline the new offer they have to either fire you (with valid reason), pay you redundancy if they want you gone (rate set by length of service), force you to quit (illegal harassment) or keep you on your current agreement.

Failure to follow those options and (assuming you are working legally) the department of labour will defend you (even as foreigner) and take the company to court (for free) if needed.

[TacoHell]

If anyone here believes that a foreigner has any rights under Thai law they are probably correct.

The problem becomes when the employer has already determined your fate with a few phone calls.

Edited March 23, 2016 by TacoHell

[TacoHell]

they have made you new offer and its yours to take or not, if you decline the new contract, you have effectively resigned

No, totally wrong.

If you decline the new offer the old one is as valid as ever. That's like saying if you decline a promotion you have resigned, same logic, equally wrong, never the case.

Based on this tot could raise prices of Internet to 1 million baht per month despite signed agreements and we have to pay or cancel? Not even in Thailand!

When a contract ends, renegotiation is optional, but mid term it's binding. And unless employment was time based, contracts not over until fired, quit or made redundant.

If you decline the new offer they have to either fire you (with valid reason), pay you redundancy if they want you gone (rate set by length of service), force you to quit (illegal harassment) or keep you on your current agreement.

Failure to follow those options and (assuming you are working legally) the department of labour will defend you (even as foreigner) and take the company to court (for free) if needed.

Would LOVE to see real-world proof of your assertion

[BritTim]

Failure to follow those options and (assuming you are working legally) the department of labour will defend you (even as foreigner) and take the company to court (for free) if needed.

Would LOVE to see real-world proof of your assertion

Actually, the Department of Labour does have a good reputation in this respect. Indeed, it is not uncommon for employers to complain that the DoL is over zealous in defending the rights of workers. Strange I know since in Thailand the rich can usually get away with anything.

[TacoHell]

Failure to follow those options and (assuming you are working legally) the department of labour will defend you (even as foreigner) and take the company to court (for free) if needed.

Would LOVE to see real-world proof of your assertion

Actually, the Department of Labour does have a good reputation in this respect. Indeed, it is not uncommon for employers to complain that the DoL is over zealous in defending the rights of workers. Strange I know since in Thailand the rich can usually get away with anything.

Links please, especially in regards to a foreigner facing a reduced salary

Edited March 23, 2016 by TacoHell

[BritTim]

Actually, the Department of Labour does have a good reputation in this respect. Indeed, it is not uncommon for employers to complain that the DoL is over zealous in defending the rights of workers. Strange I know since in Thailand the rich can usually get away with anything.

Links please, especially in regards to a foreigner facing a reduced salary

I know of several individual cases from those involved. Most of the 20,000 or so cases handled by the labour courts each year are, for some reason, not considered as newsworthy as terrorist attacks in Brussels, for instance, so finding media reports is not easy. I am not willing to spend hours chasing down references.

I doubt these links will satisfy you, but

http://www.hg.org/article.asp?id=36722 (Decisions in favor of foreign employees working illegally)

http://www.stickmanbangkok.com/ReadersSubmissions2013/reader8366.htm

Possibly interesting for the OP's quesion, not relevant to the above

http://www.tilleke.com/sites/default/files/2013_Sep_Multilaw_Hire_Fire_Thailand.pdf

Changes To The Contract An employer may only change the terms of an employment agreement with the employee’s consent. Such consent may be express (by the employee agreeing to the change) or implied (by the employee continuing to work for the employer without protest for a reasonable period of time after being made aware of the change). Any change of terms to which the employee does not consent would constitute a breach of contract.

[dbrenn]

No, comms is another story, something I can do very little about. This post is exactly as I posted. About reducing basic not comms. There has been talk that soon the company will be reducing management's basic salaries and making it up with commission. Which in my experience never gets paid. So my OP is valid. Can they reduce your basic? Which it appears, they cannot.

Correct, and it's fair that employers should not be allowed to reduce basic pay. If an employer were allowed to reduce basic (or allowances like a car allowance that are attached to basic), they could do it as a way of forcing people out, or reducing exposure to severance pay if they intend to terminate employees after a pay reduction.

Section 77 of the Labour Protection Act 1998 states that any deduction or reduction from wages (other than those required by law, such as personal income tax or social security) requires the written consent of the employee. There was a guy in our sales team who was paid too much because of a clerical error, but we still needed his written consent to deduct the overpaid amount from his salary.

[dbrenn]

No, comms is another story, something I can do very little about. This post is exactly as I posted. About reducing basic not comms. There has been talk that soon the company will be reducing management's basic salaries and making it up with commission. Which in my experience never gets paid. So my OP is valid. Can they reduce your basic? Which it appears, they cannot.

Correct, and it's fair that employers should not be allowed to reduce basic pay. If an employer were allowed to reduce basic (or allowances like a car allowance that are attached to basic), they could do it as a way of forcing people out, or reducing exposure to severance pay if they intend to terminate employees after a pay reduction.

Section 77 of the Labour Protection Act 1998 states that any deduction or reduction from wages (other than those required by law, such as personal income tax or social security) requires the written consent of the employee. There was a guy in our sales team who was paid too much because of a clerical error, but we still needed his written consent to deduct the overpaid amount from his salary.

Worthy of note too is that the Labour Court do not differentiate between Thais and foreigners, and foreigners will get a fair hearing. We've been taken to the Labour Court before by a disgruntled employee that we'd had to fire under section 119 of the Labour Protection Act (no severance pay due to gross negligence, causing damage). The Labour Court handles cases in a professional way. The employee gets a hearing within a couple of months of lodging the complaint. The first hearing is handled by an arbiter, who tries to find common ground between the employer and the employee. If this fails, then another hearing is scheduled where a court judgement will be made.

The Labour Court leans in favour of the employee, unless there is clear evidence that the employee is at fault.

In the case of the OP, a judgement would almost certainly be made in his favour, as his employer is in violation of the law.

[Bigleg]

Thank you dbrenn, for your clear advise based on actual circumstances. Appreciated

[dbrenn]

Thank you dbrenn, for your clear advise based on actual circumstances. Appreciated

Good luck. And remember that if they instead decide to make you redundant then they must pay you for one month notice and also severance pay under section 118 of the Labour Protection Act. How much you get depends on how long you've worked there.

If they force a salary reduction on to you without your consent, then the labour court will order that your salary be reinstated and the illegally deducted amounts be paid back to you with 15 percent per annum interest.

These are your legal rights and are irrespective of any contract that you may have signed. Contracts of employment are subordinate to the Labour Protection Act.

Edited March 24, 2016 by dbrenn

[steven100]

of coarse it can.

what do you think ? if you buck up about it and make problem what do you think will happen to your job in a few weeks time ? certainly not a raise or a pat on the back ........

think about it ........

[dbrenn]

of coarse it can.

what do you think ? if you buck up about it and make problem what do you think will happen to your job in a few weeks time ? certainly not a raise or a pat on the back ........

think about it ........

If they make him redundant they'll still have to pay him notice and severance pay according to the law. The OP might be better off for that as his employer is trying to illegally reduce his salary, around which he has built his life. Edited March 24, 2016 by dbrenn

[Nemesis7]

Its Thailand and they can do what ever they want, and i wont be surprised if they prepare paper work accordingly. Its like take it or leave it. Court is a lengthy procedure

[smotherb]

The WP doesnt come into it

Its a contractual thing

If a company tried that on me, i would walk, not a reputable company to work for simple

Of course a company can reduce your salary. No matter your contract, you can be terminated. Offering to keep you on at a reduced recompense may be better than termination and allow them to legally reduce your salary.

This is the reason I started the thread. It was my understanding that a company cannot just lower your salary without both parties agreeing to it

That's true, if you don't agree, you quit.

[dbrenn]

Its Thailand and they can do what ever they want, and i wont be surprised if they prepare paper work accordingly. Its like take it or leave it. Court is a lengthy procedure

Conjecture.