THAILAND Trends and Developments Contributed by: Nam-Ake Lekfuangfu, Theeranit Pongpanarat and Panitan Pruksakasemsuk, Baker McKenzie (Bangkok)
respect and comply with human rights and relevant legal obligations, especially those relating to their own employees and migrant workers. Employee Welfare Fund While the Employee Welfare Fund is not a new devel - opment, as it has been prescribed in the Labour Protection Act B.E. 2541 (1998) (“LPA”), without nec - essary sub-regulations to kickstart its mandatory obli - gations, it has remained dormant up until now. With the recognition that the current legal entitlements for employee in case of unemployment may not be suf - ficient to fully provide the employee’s social safety net when they leave their job, the Thai government has introduced several sub-regulations issued under LPA in 2024 to finally implement the mandatory obligations under Employee Welfare Fund upon the employer, which will take effect from 1 October 2025. Three key pieces of legislation relating to the Employ - ee Welfare Fund were introduced in November 2024 and will take effect from 1 October 2025. Summary of the employer’s main requirements under the Employee Welfare Fund is as follows. The requirements under the Employee Welfare Fund apply to employers who have 10 or more employees and to all employees who have not yet joined the provident fund. • The employers and employees who are subject to the Employee Welfare Fund will be required to make monthly contributions to the Fund at 0.25% of the employee’s wage from 1 October 2025 to 30 September 2030. Starting 1 October 2030, the contribution rate will be increased to 0.5% of the employee’s wage. • The employers are required to make their own con - tribution and deduct from the employees’ wages to make contributions at the same rate above to the Employee Welfare Fund on a monthly basis by the 15th of the month following the wage deduction date. • The employers are required to submit a list of employees who are subject to the Employee Wel - fare Fund and other required information by the
15th of the month subsequent to the wage pay - ment date. However, the above requirements are exempted if the employer has already submitted the employer’s and employee’s registration with the Social Security Fund. Business Change and Workforce Restructuring In the wake of global economic uncertainty, compa - nies are making strategic decisions to optimise their portfolios and prioritise financial growth. Additionally, the geopolitical climate has prompted companies to re-evaluate their supply chains and strategies. Against the need to stay resilient and manage risks, organisa - tions and employees are eager to capitalise on the opportunities offered by technological advancements and shifts in working culture to stay flexible. Whether a company chooses to restructure or expand into new business areas, there are key employment considerations that must be addressed during busi - ness change and restructuring projects. Whether it be an acquisition, disposal, spinoff, restructuring, or reduction in force, these actions come with com - plex employer obligations. It is crucial, therefore, for employers to be aware of these obligations and be well-prepared to handle them. Practical and legal issues may include, for example: • legal requirements and approaches to moving employees to a new entity; • post-acquisition integration issues such as ben - efits and welfare; harmonisation, standardising HR processes and documents, and managing potential redundancies; and • workforce reduction, which results in termination of employment, carries legal risks and requires the employer to comply; thus, employers should plan ahead for the right approaches to deal with employees who will have to leave effectively. Recent developments in the alternative workforce With a move towards more flexibility and new ways of hiring, employers are increasingly embracing and capitalising on technological advancements. How - ever, laws do not always provide clear guidance on complex legal issues around these arrangements. These legal complexities require careful navigation,
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