Thailand’s Latest Efforts to Facilitate Business Operations – Work Rules, Public Company Management, Social Security

By Piyawannee Watanasakolpunt and Sudthapa Thanathanya

This is our second installment highlighting efforts of the National Council for Peace and Order (“NCPO”) to facilitate business operations in Thailand.  As mentioned in our first installment covering changes to the Civil and Commercial Code, the NCPO issued order no. 21/2560 on 4 April 2017 with immediate effect to amend provisions of the Civil and Commercial Code, Labour Protection Act, Public Limited Company Act, Social Security Act and Bankruptcy Act.  A summary of some of the more significant amendments to the Labour Protection Act, Public Limited Company Act, Social Security Act is set out below, and changes to the Bankruptcy Act will be covered in a subsequent article.

Work Rules are no longer required to be registered

Registration of work rules with local authorities has proven to be problematic and time consuming because officials have very broad authority when reviewing and requesting changes to work rules.  Under the NCPO’s order, an employer can simply publish work rules at the work place without submitting them for registration.  However, if any provisions of the work rules are inconsistent with Thai labor law, the labor law will apply.

Changes to Management Requirements for Public Companies

  • Fewer shares required to call an extraordinary meeting of shareholders

Previously, in order for shareholders of a public company to call an extraordinary meeting of shareholders, shareholders holding 20% of the total issued shares or 25 shareholders holding at least 10% of total issued shares could request the board of directors to convene an EGM.

Under the NCPO’s order, shareholders holding at least 10% of total issued shares can request the board of directors to convene an EGM.  If the board fails to convene a meeting within 45 days, shareholders can convene an EGM themselves, with the company responsible for facilitating such meeting and bearing all related costs and expenses.  If, however, the shareholders fail to form a quorum, then the shareholders calling such meeting will be responsible for the costs and expenses.

  • Board of directors must convene EGM within 45 days from shareholder request

As mentioend above, the board of directors is required to convene an EGM within 45 days from receiving a request from shareholders.  Previously the directors were required to convene the meeting within one month.

  • Fewer shares required to request an official investigation

Shareholders who hold only 5% of total issued shares may now require an official investigation of the company’s business and financial status, including the board’s activities.

More flexibility under Social Security Act

The Minister of Interior may, under approval by the Cabinet, extend the prescription periods for filing obligations of (i) any unemployed persons wishing to maintain social security rights and (ii) employee’s social security contribution.  This is aimed to provide employers with more flexibility and to protect employer’s and employee’s rights and benefits.

Copies of Government Documents No Longer Required when Contacting Authorities

The NCPO order puts burden of preparing supporting government documents (such as ID card, company affidavit, etc.) on each government authority responsible for applications of approvals, permits or licenses. If any government authority wishes to request copies of government documents from applicants, such government authority must prepare copies itself without additional cost to applicants.