The Phuket News Premier League predictions The Phuket News Kata Rocks The Phuket News Outrigger Koh Samui Beach Resort
The Phuket News Business News
The Phuket News Phuket | Thailand | World | Business | Q&A | Weird World XML, RSS, Feed
The Phuket News The Phuket News
The Phuket News

Phuket Law: Pitfalls of hiring and firing for the tourism high and low seasons

PHUKET: Thailand’s tourism and hospitality industry is among the most important contributors to the country’s economy. Anyone familiar with those industries knows that it’s dictated by high and low “seasons”. Business peaks during the European winter holidays and dips during the northern hemisphere’s spring and fall.

tourism, economics,


Jerrold Kippen

Sunday 6 August 2017, 02:00PM


Job-seekers scour the boards at a job fair held at Central Festival Phuket East earlier this year. Photo: Supplied
Job-seekers scour the boards at a job fair held at Central Festival Phuket East earlier this year. Photo: Supplied

Thus, if you are running a business in the Thai tourism or hospitality sector, you need more staff during the peaks and less during the dips. As a result, we are often asked about “seasonal employees”. Are there any legal issues with hiring people for just the peak season and then letting them go if – from a business perspective – the following dip does not justify keeping them on? Are there any legal issues with, for example:

A. hiring someone from November 1 to April 30 next year and then letting them go; or, if business warrants

B. hiring them again by entering under a new employment contract running from May 1 to October 31 the next year, and then letting them go; or

C. hiring them a third time for the next high season from November 1, 2017 to April 30, 2018?

The short answer is: “yes, there are” and perhaps the most significant is severance pay liability.

Employment matters are generally governed by the Labour Protection Act 1998 (“LPA”). The LPA was largely enacted to protect employees on the assumption that employees are in the weaker of the two positions in their relationship with their employer and, therefore, in need of such protection.

This also means that, in any dispute with an employer, Thai labour courts are supposed to interpret the LPA in the light most favourable to the employee.

One of the most significant rights that the LPA provides to employees is the severance pay that is due to the employee should he or she be terminated for any reason other than the rather limited “termination for cause” reasons defined by the LPA.

The amount of severance that is payable to an employee terminated without such cause increases the longer the employee is employed.

The only way for a worker’s employment to come to an end without terminating them for cause and without paying severance is to hire that employee under a “fixed-term” contract. But Section 118 of the LPA significantly curtails who can qualify as a “fixed-term” employee as follows:

a. employment in a specific project, which is not the normal business or trade of the employer and requires a definite date to commence and end the work; or

b. work which is occasional with a definite ending or completion; or

c. work which is seasonal and the employment is made during the season

British International School, Phuket

Important to note is that regardless whether the employment is under (a), (b) or (c) above, such work must be completed within a period not exceeding two years and the employer must make a written contract with the employee at the beginning of the employment.

Furthermore, although it is recommended, Thai employment contracts generally do not need to be written. However, in order to be qualified as a fixed-term employment exemptible from severance payment, the said contract must be a “written contract”.

So what about (c)? Are high and low tourism season employees, “seasonal” employees?

There is no definition of “seasonal employment” under the LPA. Thai courts’ interpretation of seasonal employment is still based on Thailand being an agriculture-based country. Therefore, as far as we are aware, the meaning of “seasonal employment” as interpreted by Thai courts has been limited to agricultural seasons, not high or low seasons in the sense of tourism, hotel, or any other businesses.

Accordingly, Thai courts do not interpret tourism and hospitality “seasonal” employment contracts as “seasonal employment” under the LPA. Thus, such employees would be entitled to severance pay upon termination pursuant to the LPA.

What about at least limiting the amount of severance payable by entering successive employment contracts so that severance liability would only apply to the period covered by the most recent contract?

The LPA does not allow for that either.

Section 20 of the LPA provides that if the employee has not worked continuously because the employer intended to deprive an employee of any right under the LPA, all such employment periods will be considered cumulative in determining what rights the employee is entitled to.

Thus, when there are successive fixed-term employment contracts they are most likely to be interpreted under the LPA as the employer’s attempt to deprive the employee’s right to severance pay for the cumulative term of employment.

In other words, our employee in our example above would have the rights of a standard 18-month employee (not a six-month employee). Therefore, that employee would be entitled to severance pay equivalent of three months’ salary (rather than one month) if terminated “without cause” as defined by the LPA.

This is true even if the employment agreement provides for reducing or extending the duration of the employment, or details the “motive” for the employment as “due to seasonal business fluctuations”.

The employer under Section 118 of the LPA and its “pro-employee” perspective would still owe severance payment for the cumulative employment period.


DUENSING KIPPEN is an international law firm specialising in business transaction and dispute resolution matters, with offices in Bangkok and Phuket, Thailand and affiliated offices in over 50 other countries. Visit them at: duensingkippen.com

 

 

The Phuket News
The Phuket News
Comment on this story
* Please login to comment. If you do not have an account please register below by simply entering a username, password and email address. You can still leave your comment below at the same time.
Comments Here:

Comments Left: Characters
Username:
Password:
E-mail: (No Hotmail, Live, MSN and Outlook accepted at this time)
Security:
   => Forget password?

Be the first to comment.

The Phuket News
The Phuket News The Phuket News The Phuket News
The Phuket News
Share this
The Phuket News
Have a news tip-off? Click here
The Phuket News
Related stories
The Phuket News
Phuket community

Recent Comments



Phuket Opinion: Tell us about it

They could leave a note on every postbox or house in those districts where interruptions etc.are expected.But thinking of to inform all foreigners the...(Read More)


Patong Police chief shunted amid suspected seafood restaurant shakedown

Time after time we read in press that high ranking 'oath standing' RTP officers are forgetting themselves in performing their duties. The most...(Read More)


Phuket Immigration officers transferred amid corruption probe

It's about frikkin' time! Kudos to the anti corrupt inspector general!!...(Read More)


Police fundraiser bullies warned, nothing to do with us, says Chalong Police chief

What is the difference between 'registering' and 'filing' a complain? First the chalong colonel said ( 2nd alinea) that the victims c...(Read More)


Patong Police chief shunted amid suspected seafood restaurant shakedown

The RTP Operations Centre in BKK must be bursting at the seams with "inactive" people sitting around all day. I wonder if they need a bigger...(Read More)


Patong Police chief shunted amid suspected seafood restaurant shakedown

This is so funny. " The transfers are severely affecting the moral of other officers" Really? The fact that they all know they are under th...(Read More)


Police fundraiser bullies warned, nothing to do with us, says Chalong Police chief

So not linked to police,but head of group is BKK cop.So no charges and not going to stop them, but don't buy the tickets. Guessing local cops g...(Read More)


Hit-and-run doctor ‘drank a lot’ prior to accident

Where do they find these Generals? Straight out of Alice in Wonderland? ...(Read More)


Van driver charged with Japanese deaths

We miss the reason why this 'public tourist Van driver' did fall asleep while driving tourists. Was he overworked, under influence of alcohol...(Read More)

The Phuket News
Bangkok Hospital Phuket
PHUKET NEWS
Phuket
Thailand
World
Business
Q A
Weird World
ARCHIVE
POLL
CURRENCY
WEATHER
PHUKET TIDE TABLE
The Phuket News PHUKET LIFE
Phuket Arts
Phuket Community
Phuket Culture
Phuket Dining
Phuket Education
Phuket Entertainment
Phuket Environment
Phuket Health
Phuket People
Phuket Technology
Phuket Travel
World Entertainment
Photo Galleries
COLOURING BOOK
The Phuket News PHUKET SPORT
Phuket
Thailand
World
SURF REPORT
PREDICTIONS
The Phuket News PHUKET CLASSIFIEDS
Phuket Buy and Sell
Phuket Jobs
Phuket Property
Phuket Cars and Boats
Phuket Community
Phuket Services
SEARCH CLASSIFIEDS
POST CLASSIFIED
The Phuket News The Phuket News PHUKET EVENTS
Phuket Event listings
Phuket Event calendar
Buy Tickets
POST EVENT
The Phuket News PHUKET DIRECTORY
Phuket Bars, pubs and clubs
Phuket Hotels and villas
Phuket Restaurants
Phuket Yellow Pages
POST LISTING
The Phuket News BARGAINS
The Phuket News ABOUT US
The Company
Distribution points
Subscribe
Advertise with us
Pay for advert
Contact us
CONTESTS
Content Google Map
Site map
Australian Visa Services
 
Currency - The Phuket News   Weather Report - The Phuket News   Surf Report - The Phuket News
LinkedIn - The Phuket News   Twitter - The Phuket News   YouTube - The Phuket News   Facebook - The Phuket News
Copyright © 2017 Class Act Media. All rights reserved. | Website usage terms and conditions | Privacy and Confidentiality Statement.