Guarantee required by employer?

[revelstone]

My girlfriend has a new job selling health and life insurance for a large company. She tells me that a "guarantee" (ประกัน) is required by her employer because she is working in a job that involves finance. Apparently this comes in the form of some type of written guarantee from a family member.

 

Precisely what this guarantee is for I don't know and she hasn't explained it in enough detail for me to understand what it entails. She is having difficulty getting anyone in her family to agree to do this, despite it being a well paid job with excellent fringe benefits. She tells me categorically that I cannot act as a guarantor, although again, I don't understand why. She claims that it must be a family member who acts as the guarantor, although I suspect she's just telling me that because she doesn't want to involve me in something she sees as her problem.

 

She doesn't speak much English and my command of Thai doesn't extend to reading, so I cannot search the net to find any information. Has anyone here heard of something similar and can explain to me exactly what this guarantee is and why the employer requires it?

 

 

[blackcab]

The company I work for does exactly the same thing. A written and witnessed guarantee from a family member is required for staff who handle cash.

 

The rationale is that it is not unknown for companies to experience theft and dishonesty, which will often end up going unpunished if the employee resigns. The police just aren't interested.

 

By involving and obligating a family member to cover any loss then the company is trying to reduce the odds of theft by making the employee aware that their family will suffer if they are dishonest.

 

The reason you will not be accepted as a guarantor is that as far as the company is concerned you are a temporary guest in Thailand and you can leave any time you want.

 

Even if you own property and a car here, everyone knows they can be sold in one day and you can be out of the country the same night with the cash in your carry on bag - and you never have to return as you have other options.

 

The company also knows that in Thailand family comes first, so there is less chance of financial dishonesty if it would impact a family member.

 

That is your answer. Now you have to ask yourself why your girlfriend's family don't want to put themselves in the firing line. They have known your girlfriend all her life, so they are in a good position to judge her character.

[tonray]

It's similar in the USA. Those involved in the financial industry in certain roles, financial sales for example must be bonded, meaning they must essentially take out an insurance policy against fraud or theft. Sometimes the company uses their bond or if the employee is an independent rep, then they must find an insurer to take them on before employment.

[revelstone]

Great, that explains exactly why it's needed. Many thanks for taking the time to fill me in.

 

She has lived most of her life with her grandfather. At the age of 77, the company will not accept him as a guarantor because they say he is too old and is retired. He even agreed to put up his house as as guarantee.

 

Her mother is unemployed and is therefore unwilling (or perhaps unable) to act as a guarantor. Her father she hasn't spoken to in well over a decade. The only other potential guarantors are a couple of cousins and an aunt who she is not close to. She doesn't come from a well-off family, so I don't necessarily think that it's indicative of a lack of trust in her character, more likely just a question of means and perhaps a misunderstanding on their part of what the guarantee entails.

[revelstone]

9 minutes ago, tonray said:

It's similar in the USA. Those involved in the financial industry in certain roles, financial sales for example must be bonded, meaning they must essentially take out an insurance policy against fraud or theft. Sometimes the company uses their bond or if the employee is an independent rep, then they must find an insurer to take them on before employment.

Could this be an alternative solution in Thailand to getting a family member to act as guarantor? Do such policies exist here?

[blackcab]

6 minutes ago, revelstone said:

Her mother is unemployed and is therefore unwilling (or perhaps unable) to act as a guarantor.

 

It depends on her mother's assets. If her mother doesn't have any then as far as her own personal liability is concerned she is actually the perfect person.

[blackcab]

3 minutes ago, revelstone said:

Could this be an alternative solution in Thailand to getting a family member to act as guarantor? Do such policies exist here?

 

Yes, fiduciary liability insurance is available in Thailand. However I have only seen it for sale to companies and not to individuals (and it was part if a comprehensive policy that covered many different types of risk).

 

[revelstone]

3 minutes ago, blackcab said:

 

It depends on her mother's assets. If her mother doesn't have any then as far as her own personal liability is concerned she is actually the perfect person.

 

Agreed.....if she would be acceptable to the company as a guarantor given her employment status and lack of assets. They've already refused her grandfather due to him being retired and of advanced age, despite him having assets.

[tonray]

7 minutes ago, revelstone said:

Could this be an alternative solution in Thailand to getting a family member to act as guarantor? Do such policies exist here?

I don't know anything about whether Thailand has a commercial bonding industry as in America. But I think someone told me that the amount demanded as security can be up to 60 times a worker's daily wage in Thailand. So you can see why her family does not want to sign. If she makes for example, 1000 baht per day, they could ask for someone to be on the hook for 60K baht.

[revelstone]

1 minute ago, blackcab said:

 

Yes, fiduciary liability insurance is available in Thailand. However I have only seen it for sale to companies and not to individuals (and it was part if a comprehensive policy that covered many different types of risk).

 

 

Thanks, that's helpful. I'll follow up on this - the company she is working for is in the insurance business, so perhaps it's an option. I'll tell her to enquire.

[blackcab]

4 minutes ago, tonray said:

I don't know anything about whether Thailand has a commercial bonding industry as in America. But I think someone told me that the amount demanded as security can be up to 60 times a worker's daily wage in Thailand. So you can see why her family does not want to sign. If she makes for example, 1000 baht per day, they could ask for someone to be on the hook for 60K baht.

 

Fiduciary liability insurance in Thailand will often be for hundreds of thousands of baht, and it can be significantly higher.

[tonray]

6 minutes ago, blackcab said:

 

Fiduciary liability insurance in Thailand will often be for hundreds of thousands of baht, and it can be significantly higher.

Likely covers a lot more than employee theft or malfeasance. In America we have insurance that has 2 components, fraud or theft, and something called (E and O) Errors and Omissions. The former obviously covers criminal activities but the latter covers honest mistakes made during performance of one's duties. For example, as a financial advisor one might have power of attorney to trade stocks....an errant keystroke can be costly but not necessarily criminal.

[blackcab]

23 minutes ago, tonray said:

Likely covers a lot more than employee theft or malfeasance. In America we have insurance that has 2 components, fraud or theft, and something called (E and O) Errors and Omissions. The former obviously covers criminal activities but the latter covers honest mistakes made during performance of one's duties. For example, as a financial advisor one might have power of attorney to trade stocks....an errant keystroke can be costly but not necessarily criminal.

 

The policies I have seen (and been covered by) only covered criminal acts. They also required a criminal conviction before they paid out.

 

On one hand the policies were worthless due to the difficulty in securing a criminal conviction, but on the other hand I do think they made employees consider the fact that the employer really would try to secure a conviction in order to get their money back.

 

If E And Os were covered here I suspect you would have companies being set up just to profit from false claims...

[tonray]

I guess the question is for the OP is :

 

Is the company asking for just a written guarantee against criminal acts ? If so...should not be a problem for family to sign.

 

Or...Is the company actually asking for xxx amount of baht as security which would be a bigger problem for family ?

[CaptHaddock]

On 8/4/2017 at 9:40 AM, tonray said:

It's similar in the USA. Those involved in the financial industry in certain roles, financial sales for example must be bonded, meaning they must essentially take out an insurance policy against fraud or theft. Sometimes the company uses their bond or if the employee is an independent rep, then they must find an insurer to take them on before employment.

But in the US as far as I know, the employee is never responsible for the bond himself.  The employer obtains the bond at his own expense just like any other insurance against risk of loss in a business, e.g. fire insurance.

 

This is another example of routine abuse of Thai employees.

[tonray]

3 minutes ago, CaptHaddock said:

But in the US as far as I know, the employee is never responsible for the bond himself.  The employer obtains the bond at his own expense just like any other insurance against risk of loss in a business, e.g. fire insurance.

 

This is another example of routine abuse of Thai employees.

It depends on whether they hire her as an employee or independent contractor which many insurance agents work as 

[blackcab]

6 hours ago, CaptHaddock said:

This is another example of routine abuse of Thai employees.

 

What are you talking about? Please name one example of a Thai employee paying for their own fiduciary liability insurance.

[CaptHaddock]

8 hours ago, blackcab said:

 

What are you talking about? Please name one example of a Thai employee paying for their own fiduciary liability insurance.

Why,  the OP's post, of course.  His girlfriend is being required by her employer to get her family to provide a bond for her, not by buying insurance, but by actually serving as the insurer.

 

Must be tough getting through life without adequate reading skills.

[fletchsmile]

Yes this practice is not uncommon in roles which relate to handling money. I used to work for a company that did this and again was told it was not uncommon in Thailand. HR looked after it

 

I couldn't say what was in the actual contract/guarantee so would suggest thoroughly looking at that and understanding it.

 

As part of the discussions as to whether it was appropriate/ why, they had also said that some places require an actual deposit of money. In this company's case they had decided to go the guarantee route instead as not everyone they wanted to employ may have the funds available. But knowing your family has provided a guarantee is a good incentive to remain on the straight and narrow. That said we still had a few instances of employee dishonesty :)

 

So it might be worth your girlfriend asking if providing an amount of money as a  deposit guarantee would be an alternative, if she is struggling with a guarantor. That way you could help out too should you decide LOL . Just asking about giving a money deposit as guarantee instead would reflect favourably in my view. i.e she's struggling to do that, but being an honest person she would like to find an alternative.

 

Cheers

Fletch :)

[blackcab]

On 07/08/2017 at 6:20 AM, CaptHaddock said:

Why,  the OP's post, of course.  His girlfriend is being required by her employer to get her family to provide a bond for her, not by buying insurance, but by actually serving as the insurer.

 

Must be tough getting through life without adequate reading skills.

 

I have to disagree with you in this instance. If the guarantee is in the form of a bond then nobody has to pay anything... unless the employee is dishonest.

 

I don't see how this requirement equates to abuse. Personally I find it quite prudent in a country with a criminal justice system that is not quite the same as a fully developed country. People don't always get prosecuted here, so without a guarantee as discussed there is little stopping people being dishonest.

 

I've personally witnessed some stunning dishonesty while working in Thailand. Out of everyone caught, nobody was prosecuted. To add insult to injury one group that was caught red handed claimed unfair dismissal (for gross misconduct) at the Labour Board and won their case.

[CaptHaddock]

On 8/9/2017 at 1:50 PM, blackcab said:

 

I have to disagree with you in this instance. If the guarantee is in the form of a bond then nobody has to pay anything... unless the employee is dishonest.

 

I don't see how this requirement equates to abuse. Personally I find it quite prudent in a country with a criminal justice system that is not quite the same as a fully developed country. People don't always get prosecuted here, so without a guarantee as discussed there is little stopping people being dishonest.

 

I've personally witnessed some stunning dishonesty while working in Thailand. Out of everyone caught, nobody was prosecuted. To add insult to injury one group that was caught red handed claimed unfair dismissal (for gross misconduct) at the Labour Board and won their case.

You have a naive understanding of money and value.  Assuming the risk of employee theft is a good that has a definite monetary value which is exactly the premium that an insurance company would charge to assume that risk.  Forcing the family to assume the risk themselves is equivalent to forcing them to pay the premium.  In fact, of course, it's worse than that since the family might be able to afford to pay the premium, but could be ruined financially if they were forced to cover losses which are theoretically unlimited.  A service is not "free" merely because there is no out-of-pocket expense.  (If you believe that, then you should be willing to assume the risk yourself.)  The system discussed imposes the penalty for loss on the family, who we know are completely innocent.  Punishing the innocent, no matter how effective, is unconscionable.

 

In the US employee theft is rarely prosecuted, not because the criminal justice system is not up to the task, but because the negative publicity is viewed as detrimental to the company's brand image.  The solution, here and there, is insurance.  If Thai companies are unwilling to write off the loss, then they should buy insurance to protect themselves from a normal business risk.

[blackcab]

2 hours ago, CaptHaddock said:

You have a naive understanding of money and value.  Assuming the risk of employee theft is a good that has a definite monetary value which is exactly the premium that an insurance company would charge to assume that risk.  Forcing the family to assume the risk themselves is equivalent to forcing them to pay the premium.  In fact, of course, it's worse than that since the family might be able to afford to pay the premium, but could be ruined financially if they were forced to cover losses which are theoretically unlimited.  A service is not "free" merely because there is no out-of-pocket expense.  (If you believe that, then you should be willing to assume the risk yourself.)  The system discussed imposes the penalty for loss on the family, who we know are completely innocent.  Punishing the innocent, no matter how effective, is unconscionable.

 

In the US employee theft is rarely prosecuted, not because the criminal justice system is not up to the task, but because the negative publicity is viewed as detrimental to the company's brand image.  The solution, here and there, is insurance.  If Thai companies are unwilling to write off the loss, then they should buy insurance to protect themselves from a normal business risk.

 

I can see where you are coming from. The main point I would disagree with is your use of the word "forcing". Nobody is forcing anyone to do anything (indeed in this case the family in question declined to guarantee the fiduciary bond).

 

Being a willing guarantor is not the same as being forced to cover an amount payable. The key issue is choice and consent.

 

Guarantors are used in contracts/mortgages/loans in many countries. Are all of these guarantors innocent people who are being punished if the person they guarantee defaults on the debt? In my opinion they are not. I would say they are people who willingly entered into a contract with their eyes wide open.

 

In the original post nobody was forced to sign. In the same wsy foreigners in Thailand are not forced to guarantee the partner's mortgages. Family members in Thailand are not forced to guarantee the relative's car loans.

[Briggsy]

I would not quite call it "abuse" Capt. Haddock. It is, rather, indicative of

i) the lack of trust that employers have here in the honesty of their employees

ii) the lack of trust that employers have here in the police and the legal system to gain redress or recover any stolen monies or assets

iii) the power imbalance that exists between employers and employees here. Employment law here is weak on many points except unfair dismissal.

iv) the nature of the job and the nature of the particular industry, namely selling insurance, which is riddled by dishonesty and petty theft.

 

Going back to the OP, I am confident that if the "girlfriend" could get a guarantee from somebody in a 'respectable job', particularly in the public sector, that may suffice.

[CaptHaddock]

16 minutes ago, blackcab said:

 

I can see where you are coming from. The main point I would disagree with is your use of the word "forcing". Nobody is forcing anyone to do anything (indeed in this case the family in question declined to guarantee the fiduciary bond).

 

Being a willing guarantor is not the same as being forced to cover an amount payable. The key issue is choice and consent.

 

Guarantors are used in contracts/mortgages/loans in many countries. Are all of these guarantors innocent people who are being punished if the person they guarantee defaults on the debt? In my opinion they are not. I would say they are people who willingly entered into a contract with their eyes wide open.

 

In the original post nobody was forced to sign. In the same wsy foreigners in Thailand are not forced to guarantee the partner's mortgages. Family members in Thailand are not forced to guarantee the relative's car loans.

The employee is forced to accept such onerous and unfair obligations if he or she wants a job.  The relationship between an employee and a company is nearly always unequal.  The company has far greater economic and probably legal power than the individual who wants a job.  In this case Thai companies commonly demand such bonds because of their power advantage.  For instance, their power to prevent the government from outlawing their odious practice. 

 

The difference between requiring a guarantor for a mortgage and for a job is that civilized countries where there is some restraint on the state's indulgence of the elites, it is recognized that people have a right to work in a way that they do not have a right to borrow someone else's money. 

 

In fact, although this hasn't yet come up in this discussion, Thai companies abuse their employees to a far greater extent than requiring them to supply employment bonds.  For instance, if the teller in a Thai bank makes a counting error resulting in loss to the bank, she herself is fully liable for the loss.  In the US an employee is generally not liable for such losses, because the employee is an "agent" of the company empowered by the bank to act on its behalf.   Therefore, although the employee can be fired for such an error she cannot be held personally responsible by the bank.  If we think of examples in construction or IT or many other kinds of jobs, it's plain that employees could not afford to work if they had to assume full financial liability personally for performing their duties as employees.

 

Clearly Thai companies will push their normal business risks onto their employees to the maximum extent possible which they are fully enabled to do by the pro-business stance of Thai governments.

[CaptHaddock]

33 minutes ago, Briggsy said:

I would not quite call it "abuse" Capt. Haddock. It is, rather, indicative of

i) the lack of trust that employers have here in the honesty of their employees

ii) the lack of trust that employers have here in the police and the legal system to gain redress or recover any stolen monies or assets

iii) the power imbalance that exists between employers and employees here. Employment law here is weak on many points except unfair dismissal.

iv) the nature of the job and the nature of the particular industry, namely selling insurance, which is riddled by dishonesty and petty theft.

 

Going back to the OP, I am confident that if the "girlfriend" could get a guarantee from somebody in a 'respectable job', particularly in the public sector, that may suffice.

Do you often feel that you live in the best of all possible worlds?  

 

Do you have any evidence to support your view that Thai employees are less honest that employees in the US or Europe?  As I have already pointed out, employers do not have to rely on the legal system to recover losses from employee theft, since they can buy insurance for that purpose in the insurance market. 

 

Are you as oblivious as your post suggests to the dishonesty of Thai companies compared to individuals?  Have you ever read the newspaper?

[Briggsy]

1 minute ago, CaptHaddock said:

Do you often feel that you live in the best of all possible worlds?  

 

Do you have any evidence to support your view that Thai employees are less honest that employees in the US or Europe?  As I have already pointed out, employers do not have to rely on the legal system to recover losses from employee theft, since they can buy insurance for that purpose in the insurance market. 

 

Are you as oblivious as your post suggests to the dishonesty of Thai companies compared to individuals?  Have you ever read the newspaper?

1. I don't understand your first question.

2. You have failed to read my post and hot-headedly placed your own construction upon it.

3. Nowhere in my post have I stated that Thai employees are less honest. I pointed out the lack of trust. Employers here trust their employees less (in fact everyone trusts everyone else less) so they place safeguards into the system. Prevention is better than cure.

4. Paragraph 3 of your post is close to an ad hominem attack that is beneath your normally erudite posts.

 

Of course this system is onerous and favours the employer. However, if the "girlfriend" mentioned in the OP is determined enough to succeed, she will be able to find a way around this minor obstacle. Selling insurance is all about persuading people. If she can't persuade anybody to guarantee her, then perhaps she would not make any money selling insurance. It may not be her cup of tea.

[CaptHaddock]

11 minutes ago, Briggsy said:

1. I don't understand your first question.

2. You have failed to read my post and hot-headedly placed your own construction upon it.

3. Nowhere in my post have I stated that Thai employees are less honest. I pointed out the lack of trust. Employers here trust their employees less (in fact everyone trusts everyone else less) so they place safeguards into the system. Prevention is better than cure.

4. Paragraph 3 of your post is close to an ad hominem attack that is beneath your normally erudite posts.

 

Of course this system is onerous and favours the employer. However, if the "girlfriend" mentioned in the OP is determined enough to succeed, she will be able to find a way around this minor obstacle. Selling insurance is all about persuading people. If she can't persuade anybody to guarantee her, then perhaps she would not make any money selling insurance. It may not be her cup of tea.

1.  Read Voltaire.

2.  I did read your post closely enough to notice that at every point you consider only the interests of the business and never the legitimate interests of employees to the point of your fatuous suggestion that it's her own fault if her family is unwilling to cover the company's insurance cost.

3.  By persistently ignoring my suggestion that Thai businesses themselves just go out and buy the insurance they need, you imply that imposing the cost of that insurance on the employee is the only solution available to the business.  What does trust have to do with it?  Do you imagine for a moment that US businesses, for instance, trust their employees? 

 

I find your calm composure in the face of inequities affecting others, not yourself, to be exemplary.