Labor disputes can arise from a variety of issues. Understanding the legal mechanisms available can help avoid potential conflicts and costly disputes.
Employees are primarily protected by Thai labour laws, which serve as public policies that are considered minimum standards for conditions of employment. Understanding these mechanisms will help human resource and compliance personnel to navigate potential challenges in Thailand.
In order to reduce the backlog of court cases, courts throughout Thailand have been incorporating alternative dispute resolution (ADR) practices into their proceedings. ADR is an out-of-court process that involves a neutral third party who helps disputing parties reach a mutually acceptable solution to their disagreements.
ADR includes conciliation, mediation, and arbitration. While each offers unique advantages, the most common type of ADR is conciliation. In conciliation, the neutral third party acts as an active participant in helping the disputing parties communicate and explore interests that may lead to compromise.
ADR is a voluntary and confidential process that is generally less expensive than litigation. ADR also provides the advantage of allowing parties to select their own arbitrators. In addition, Thailand is a signatory to the New York Convention on Recognition and Enforcement of Foreign Arbitral Awards 1958, which makes arbitral awards enforceable in Thailand.
In most cases, labor disputes arise when an employee feels resentment or miscommunication about their working conditions. By establishing high moral standards and treating employees fairly, employers can foster a positive workplace environment and boost productivity rates. In addition, a strong legal system can ensure that employees’ rights are protected in the event of a dispute.
Although the pace of Thailand’s work transition has created a ‘modern’ sector in services and industries, a significant proportion of Thai workers still operate in the informal economy – often without adequate legal protection. Unions play a vital role in enforcing legislated employment laws and providing workers with essential services such as healthcare, family/medical leave, and overtime compensation.
Court-supervised mediation and conciliation are increasingly popular means of resolving labour disputes in Thailand. In fact, the judicial system encourages parties to try these alternatives to litigation before filing their case in court. The conciliation process typically involves the parties sitting down with a neutral mediator to discuss their disagreements and work through a solution.
Most courts require litigants to attempt mediation before proceeding to a trial. Mediation is a process in which the mediator oversees and facilitates communication between parties in order to reach an acceptable resolution to the dispute. The mediator encourages both sides to consider a variety of options and compromises that may be mutually acceptable, including solutions they had not previously considered. Private meetings between the mediator and a single party can be conducted if deemed appropriate to address issues that a party may not feel comfortable discussing with the other party in an open setting.
Labor disputes involving wage claims, hours of work, overtime pay, and relocation of the workplace are common sources of conflict. Taking advantage of the existing alternative dispute resolution channels available in Thailand can help to mitigate these difficulties and avoid lengthy litigation. For this reason, it is important for employers and human resource, compliance, and sustainability staff to be aware of the various mediation options available to them.
Arbitration is a means of resolving labor disputes that involves parties agreeing to select a third party to make a ruling on their dispute. The arbitration proceedings are less formal than a court proceeding and each party has the opportunity to present evidence and answer questions from the arbitrator.
The arbitration system in Thailand is based on the UNCITRAL Model Law. There have been recent changes to the rules that have made it more efficient and effective for the arbitrators. Those changes include the removal of certain procedures that can result in a case being dismissed and simplifying the process for foreign arbitrators to secure a work permit to participate in the proceedings. These changes are a welcome progression towards establishing Thailand as a hub for international arbitration. However, there are still several hindrances that need to be overcome to encourage more companies to include arbitration agreements in their contracts with employees. These include training of the concept of arbitration amongst the lawyers and corporations as well as a greater awareness of the benefits that can be gained by including an arbitration clause in a contract.