The Act Protecting Home-Based Workers, a new law to protect persons who work from home, came into effect in Thailand on May 15, 2011. In recent years, the employment landscape has dramatically changed from employees working at an employer's premises to outsourcing work and hiring outside personnel to work from home. This employment structure allows employers to cut labor costs and avoid complying with Thai labor laws. Without an employer-employee contractual relationship, there is no protection for workers hired by hirers to perform the same work as those working directly for employers.

Work Performed at Home

Under the Act, "work performed at home" is defined as work that an industrial business operator assigns to persons to manufacture at home or outside the operator's premises. The Act does not provide for the meaning of "industrial business," however, and it is unclear what kind of work will fall under the Act. It is expected that the Ministry of Labor will issue a definition of this term in the near future, so as to avoid any ambiguity for business operators who will be affected by the Act.

Protections

To protect workers covered under the Act, hirers must now arrange documents related to the type of work, one of which will be kept on the hirer's premises while the other will be delivered to the worker. These documents must contain details such as:

  • The name, address, sex, and age of the worker;
  • The name and address of the hirer;
  • The amount of remuneration and its calculation rate;
  • The amount of security received from the worker;
  • The type, quantity, and value of the work performed;
  • The commencement date and expiry date of each work installment;
  • The due date of the work; and
  • The signatures of the hirer and worker.

The hirer must maintain these documents for not less than two years from the date of the remuneration payment.

Although the contractual relationship between the hirer and worker does not constitute that of an employer and employee, labor officials will now possess the authority to aid workers by providing legal assistance and representing them in court. (All disputes between hirers and workers will fall under the jurisdiction of the Labor Court.) Should the terms and conditions specified in the document between hirer and worker result in a disadvantage for the worker, the Labor Court will have the authority to order the amendment of those terms and conditions.

The amount of remuneration paid shall not be less than the wage rate stipulated by the Thai Labor Protection Act, and the hirer must pay such amount within the agreed time but not more than seven days from the date the worker delivers the work to the hirer. The hirer is prohibited from deducting any amount from the remuneration, except for income tax, other payments as required by law, compensation due to the willful acts or gross negligence of the worker (with the worker's consent), and any damages or fines due to delay in delivery of work (also with consent).

Any person who violates the Act will be subject to penalties as set forth in the Act. For private entrepreneurs that will be subject to the Act and its penalties, it is important for government officials, especially the officials of the Ministry of Labor, to clarify any unclear aspects of the Act.

Implications

Legal practitioners will be interested in government officials' explanations regarding the differences between the contract between the hirer and worker pursuant to the Act and the hire-of-work contractual relationship as specified under the Thai Civil and Commercial Code. Under a hire-of-work arrangement, the concept of freedom of contract is recognized, whereby the employer and contractor can negotiate the terms and conditions as they see fit. Thus, the question may arise as to the necessity of the new Act. And, as explained above, business operators that fall under the Act will be subject to increased administrative burdens.

For business operators that already comply with applicable laws and treat their contracting parties fairly, the Act may not be viewed as necessary for the time being. On the other hand, the concerned government agencies have a duty to protect workers who labor outside the hirer's premises.

To be fair, the relevant government officers, the Cabinet, the House of Representatives, and the Senate have carefully scrutinized the potential effects of the Act. The only remaining concern is whether the Ministry of Labor will clarify certain ambiguities in the new Act. Businesses that rely on home-based workers will be closely monitoring the issuance of ministerial regulations in this area in the months ahead.

The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.