Thai Labour Unions

Thai law allows employees to form unions and sets out the requirements for forming a union.  At least ten employees at a “business location” can elect to form a union and obtain approval from the Ministry of Labour to form a union.  But only a properly formed labour union where the labour union membership consists of at least 20% of the total employees at the business location is entitled to make demands against the employer on behalf of the union’s members.  Thus, a properly formed union recognized under Thai law would not have the right to make a demand against an employer if the union does not represent at least one-fifth of all employees.  An overview of the labour union formation process and the process for settling labour union demands is as follows:

Formation of Labour Unions

The Labour Relations Act, B.E. 2518 (1975) (the Act)) specifically provides for the establishment of labour unions.  Labour unions must first register with the Registrar at the Ministry of Labour and obtain a license before they are recognized under Thai law and may commence activities.  A union must have at least ten members, and the members must be Thai nationals employed by the same employer or be engaged in the same type of work.  Each labour union must form a “Labour Union Committee” to carry out the activities of the labour union and act as its representative when dealing with third parties.  

Submitting Demands and the Dispute Resolution Process

A labour union is legally qualified to submit demands on behalf of its members provided the number of its members amounts to at least 20% of the total number of employees in the business.  The union and employer may each appoint a maximum of two advisors to participate in subsequent negotiations.  These advisors must be registered with the Department of Labour Protection and Welfare.

Upon receipt of a demand duly made by a union, an employer is obliged to immediately acknowledge receipt of the demand in writing and provide the names of its representatives and advisors (if appointed).  A meeting between employer and employees must be held within three days from the date of receipt to negotiate on the demand.  The Act does not set any time limit on the negotiation process, thus providing the parties as much time as necessary provided they are both willing to continue the negotiations.

  1. Reaching an Agreement    

If the parties successfully negotiate an agreement, then such agreement must be executed in writing in the Thai language and must be for a term of no longer than three years.   If the term is not specified in the agreement, it is deemed to have a term of one year, and if the agreement is stated to cover a term longer than three years, it shall only be effective for three years.  The employer is required to register the agreement with the Department of Labour Protection and Welfare and put a copy of the agreement on the notice board at the place of work for at least a month within fifteen days from the date the agreement is reached.

According to the existing practice of and interpretation of the relevant laws by the Department of Labour Protection and Welfare, an agreement concluded with a labour union will bind and benefit all the employees of the business if at least two-thirds of all employees are members of the labour union or took part in the demand.  The agreement will also bind the employer in regard to those employees hired after the date of the agreement. The employer cannot hire the new employees on terms less favorable than those under the agreement.
Upon expiry of the term and in the absence of a new agreement negotiated by the parties, the agreement will be renewed for a term of one year.

  1. Labour Disputes and Settlement of Labour Disputes

If the parties fail to reach an agreement following negotiations, a “labour dispute” is deemed to have arisen.  Within twenty-four hours from the time when the labour dispute is deemed to have arisen, the demanding party is obliged to advise the “Labour Dispute Mediation Officer” of the Department of Labour Protection and Welfare in writing of the labour dispute.
The Labour Dispute Mediation Officer will then attempt to reconcile the disputed issues through mediation between the parties.  If a settlement is reached within five days, then the procedures on the execution, registration and publication of an agreement mentioned above will apply.  If, however, no settlement is reached, the labour dispute will be deemed an “unsettled labour dispute”.

  1. Industrial Actions and Arbitration       

Once an unsettled labour dispute has arisen, and provided that the business does not involve certain essential services as defined under the Act, the employer may effect a “lock-out” and the employees may go on “strike”, provided the party taking the action advises the Labour Dispute Mediation Officer in writing and allows a lapse of twenty-four hours before commencing the intended action.  In the case of a strike by a labour union, a resolution passed by a majority vote of all its members at a general meeting is also required.

Instead of the employer or employees opting for a “lock-out” or “strike”, respectively, the parties may agree to submit the unsettled labour dispute to arbitration.  The Act provides the structure for arbitration proceedings and the establishment of “Labour Dispute Arbitrator(s)”. A determination by the Labour Dispute Arbitrator is binding on the parties, not subject to appeal and enforceable for one year from the date of the determination.

  1. Potential issues for Employers

Under the Act, an employer is prohibited from terminating or re-assigning any employee who has made a demand concerning conditions of employment that is in the process of negotiation, settlement, or arbitration, provided the employee has an interest in the dispute and has not engaged in any of specified activities under the Act deemed detrimental to employer.  The term “conditions of employment” is defined by the Act to include: hiring or working conditions, working days and hours, wages, welfare, termination or other benefits of the employer or the employee pertinent to hiring or working.

Employees who become aware that they will soon be subject to transfer or termination may submit a demand pursuant to Section 13 of the Act, asking, for example, for benefits in addition to those provided by law or that the employer is prepared to offer.  Once the demand is duly submitted, the employer will be forced to undergo the negotiation, mediation and arbitration process described above, and during such time employer cannot transfer or terminate the relevant employees.  It is quite possible that the employer would end up paying more than it has originally intended to do in connection with the transfer or termination of the employees, so it is usually in the employer’s best interest to address any such matters prior to the submission of any employee demand.  To safeguard against possible untoward actions, particularly frivolous demands from the employees, it may be advisable for the employer to advise the labour relations authorities in advance of any intended transfer or termination of its employees.

Section 121 of the Act prohibits the termination of employees (including employees who are members of a labour union) as a result of the employees “calling a rally, filing a complaint, lodging a demand, negotiating or instituting a lawsuit . . . or by reason of the employee or labour union being about to take the said actions . . .” Nonetheless, the courts have held that termination of labour union members may still proceed if there are other sufficient grounds, i.e., where  the termination is not primarily motivated by the employer’s desire to thwart the union activities of employees, and there is a genuine non-union related reason for the termination.  There are precedents where economic necessity has been considered an acceptable basis for termination of union members, but generally, termination of union employees needs to be treated with greater caution than non-unionized employees, particularly those employees who are union leaders.