Author: parinyawatk

The statutory entitlement to severance pay is a fundamental protection afforded to employees under Thailand’s Labour Protection Act B.E. 2541 (1998) (the “Labour Protection Act”). In principle, an employer terminating an employee’s employment is required to pay severance in accordance with the employee’s period of service. This obligation, however, is subject to specific statutory exceptions. Section 118, paragraphs three and four, establish circumstances in which an employer is exempt from the obligation to pay severance pay, thereby creating an important qualification to the general principle of statutory protection. These paragraphs provide as follows: “The provisions of paragraph one shall not apply to an Employee whose employment is for a definite period and the employment is terminated at the end of that period. Employment for a definite period under paragraph three is allowed for employment in a specific project which is […]

Private school teachers in Thailand occupy a special legal position in the Kingdom due to the provisions of both the Labour Protection Act 2541 (1998) (LPA), and the Private School Act B.E. 2550 (2007) (PSA). Section 4 of the LPA provides for exceptions to certain employers who are not subject to the Act, including those covered under Ministerial Regulations; Section (1) of Ministerial Regulation No. 1 dated 19 August B.E. 2541 (1998) provides for an exception for private school teachers given that it states that “(1) the Labor Protection Act, B.E. 2541 shall not apply to an employer who carries out the private school undertaking under the law on private schools, particularly to headmasters and teachers”. However, section 86 of the PSA while it excludes private school teachers from the direct application of the LPA it requires that they receive […]

When the Unfair Contract Terms Act B.E. 2540 (1997) (the “Act”) came into effect it signified an important development in Thai contract law by limiting the traditional principle of freedom of contract with considerations of fairness. The Act empowers the Thai courts to review contractual provisions that confer an unreasonable advantage upon one party. Key to this Act is section 4, which creates a statutory test for identifying unfair contract terms and empowers courts to enforce such terms only to the extent that they are fair and reasonable in the circumstances. Since its enactment, section 4 has become the focal point of judicial interpretation concerning the balance between contractual autonomy and the protection of weaker contracting parties. This article examines several important judicial decisions interpreting section 4 of the Act, by detailing relevant facts, the decision of the relevant court […]

Before buying shares in a private company limited in Thailand, a prospective shareholder should consider a broad range of legal issues in order to make sure that their proposed investment is not subject to unnecessary risks and potential problems. This article will point out and discuss several of the more important legal matters which a prospective shareholder should consider before proceeding, including share transfer procedures, share purchase agreements, implications of the Foreign Business Act BE 2542 (1999) (FBA as well as various other issues such as shareholder agreements.   Review of Articles of Association (AoA) and Shareholder Agreements Two of the most important things which a prospective buyer should investigate are the target company’s AoA and any existing shareholder agreements as they can contain important conditions which can impact the running of the company[1] and impact other important matters such […]

Good Corporate Governance (“GCG”) practices are extremely important because they can help to ensure that a company is managed and controlled in an ethical, transparent and accountable way. In Thailand, corporate governance standards for a Thai Company Limited are primarily governed by the Civil and Commercial Code (CCC). This article shall examine what is required for a Limited Company in Thailand to implement effective and robust GCG practices as well as practical tips which directors should follow when adhering to GCG.   Good Corporate Governance and Shareholders A Thai Company Limited must ensure fair and professional treatment of its shareholders. Practical GCG measures with respect to shareholders include the following: Providing clear and legally compliant advance notice of all shareholders’ meetings (Annual General Meetings or AGM and Extraordinary General Meetings or EGM) to the shareholders which at a minimum involves […]

The Articles of Association (AoA or Articles) play a vitally important role in the governance of a Thai limited company as they are basically the company’s internal corporate rules. The AoA are initially decided at the company’s statutory meeting which is held as part of the company formation process. The Articles not only regulate the relationship between shareholders, directors, and the company itself but they also set out the legal framework within which corporate powers are to be exercised. This article shall examine various issues including enforcement and amendment of the AoA and what provisions are typically contained in AoA for a company limited in Thailand.   What are the AoA under Thai law? The AoA are recognized by the Civil and Commercial Code of Thailand (CCC) as a binding internal contract that governs the legal relationship between: The company […]

Section 420 of the Thai Civil & Commercial Code (CCC) provides that “a person who, willfully or negligently, unlawfully injures the life, body, health, liberty, property or any right of another person, is said to commit a wrongful act and is bound to make compensation therefore”. Thus pursuant to the legal concept of liability for wrongful acts under the CCC, a person can only be compensated if their lawsuit can prove the existence of the following four elements which are required in order to prove that a wrongful act was committed. 1.Willful or Negligent Act It must be proven that the accused party acted willfully or failed to exercise the degree of care that a reasonable person would ordinarily exercise to avoid the foreseeable harm. 2.Causing Actual Damage It must be proven that the victim suffered actual damage, such damage […]

Foreign nationals (i.e. non-Thai citizens) seeking employment in Thailand need to obtain both a Non-Immigrant B visa and a work permit. The process is regulated by the Immigration Bureau and the Employment Department, Ministry of Labour. The employer of the foreign applicant must be a legally registered Thai entity, typically this is a company limited but the employer could be another other type of juristic person, such as a branch office[1] or a representative office. This article outlines the step-by-step process, key requirements, and practical considerations for both the employer and the employee with respect to applying for a work permit and a Non-B visa (and extension), based on the assumption that the employer is a company limited that is registered in Thailand.   Overview To work legally in Thailand, a foreigner shall need the following: A Non-Immigrant “B” (Business) […]