Amending an Employment Agreement
Author: Mr. Worasete Phueksakon
During the term of an employment contract the working conditions of the employee may undergo significant changes, for instance an employee could be promoted, demoted, have a pay rise, be seconded to a new role or otherwise have their work responsibilities adjusted to fit their employers operational needs. Given that an ongoing employment contract may be in effect for a long period of time, its provisions may need to be amended to reflect these different circumstances, however, this need to amend gives rise to an important legal issue as to how can such changes to an employment contract be compliant with Thai labor law.
Background to Employment Contracts and Working Conditions:
To begin with, it is necessary to examine the legislative background of employment contracts and working conditions. In relation to work condition agreements, section 5 of the Labour Relations Act (B.E. 2518) defines this to mean:
“an agreement between an employer and employee or between an employer or employers’ association and the labour union relating to working conditions”.
The provisions of these agreements entered into by an employer and their employee mainly relate to working conditions. The term “working conditions” is defined in the Labour Relations Act to mean:
a condition on employment or work, working days and hours, wage, welfare, termination of employment or other benefit of an employer or employee regarding employment or work”.
Furthermore, one should be aware that working conditions may also relate to other work related conditions such as an order from an employer, work regulations or work rules etc.
Amending Working Conditions:
Employers intending to amend the working conditions agreement of their staff frequently misunderstand Thai labor law in that that they think that they have complete and unfettered discretion to make any alterations to their employee’s employment contracts. However, employers should be aware that this is not necessarily the case and that if they unilaterally alter their staff’s working conditions agreements, such change(s) could be deemed to be invalid with the previous working condition agreement to be applied instead.
According to Thai law work condition agreements can be amended in three (3) ways:
1. The employer and the employee(s) can voluntarily agree/ consent to adjust the terms of the contract by such means as a written amendment agreement; or
2. The labor union can negotiate with an employer on behalf of the employee(s) to adjust the terms of the contract. However, the union cannot force the employer to accept its demands; rather if the parties are unable to reach an agreement, then a Labor Department official will become involved to try to get the parties to compromise but if this fails then the employees can strike or the employer may carry-out a lock-out from the workplace to force compliance with their demands.
3. The employer increases or improves the employment benefits of its employee(s);
1. – Employer and Employee(s) voluntarily agree/ consent to amend the conditions:
This approach is the most straightforward method for an employer and an employee to amend working conditions but it can be difficult to be achieved if the conditions to be adjusted will be disadvantageous to the employees.
According to the law, following successful negotiations and an agreement on the change in conditions being reached by the parties, the new working condition agreement will be enforceable. In terms of improving clarity and trust, I recommend that all amendments to the working conditions agreement be made in writing and be signed by all affected staff and the employer as this will provide clear proof of both parties having agreed to all negotiated changes.
With regard to this method, the Supreme Court of Thailand has clarified the different types of consent along with their respective requirements:
A. Express consent. This type of consent requires an employer and their employee(s) to agree to consent to the agreed change in writing, with both parties signing in evidence thereof.
B. Implied consent is held to require compliance with the following two (2) requirements:
i. The other party must comply with the new working condition agreement which has been altered; and
ii. The other party must comply with the amended working condition agreement for a significant amount of time. In terms of what will constitute a significant amount of time, this is subjective and will be determined by the Court on a case by case basis. In some instances, the Courts may hold that a period of compliance of three or four months may be sufficient to indicate that implied consent has been given by affected employees.
2. – Labor Union Demand re Adjusting conditions:
This method must be undertaken according to the labour relations process which requires the submission of a demand that can be made by either an employer or an employee. After either party submits a demand, the parties will negotiate to resolve the issue within three (3) days. If the parties can agree, they will make a new working condition agreement in writing which must be signed by the parties (i.e. the employer and the employee).
Employers should be aware that if the negotiations with the labour union do result in a change to staff working conditions, then within three (3) days from the date that a new working condition agreement has been made, they must publicly post the new agreement at their workplace for a period of no less than thirty (30) days. In addition to this requirement, an employer must also register the new working condition agreement with the Director-General of the Department of Labor or their delegate within fifteen (15) days starting from the date that a new working condition agreement has been made.
However, if negotiations between a union and an employer are unable to resolve a conflict over proposed changes or a negotiation is unable to be undertaken at all, then the next step which may be undertaken is a lock out by the employer or a strike by the employees. Such step a step can be used by the parties to compel the other party to comply with their demands. This final step is complicated and as such shall be explained in detail in a future article.
3. – Employer increases the employment benefits to its employee(s):
An employer can unilaterally alter a working condition agreement on condition that such change increases or improves an employee’s benefits. For instance, an employer could validly increase the annual salary of their employee without the need to obtain the employee’s prior consent.
Safeguarding employees working conditions in relation to implied consent
If you are an employee who works in a large corporation which has a strong and vocal union or board of employees committee, it is unlikely that your employer will arbitrarily alter your working conditions as they will be wary of provoking a major conflict with the union or the committee. However, for those employees who work in small companies or those with weak or non-existent union or employee committee representation, an employer may be more likely to try to unilaterally adjust working conditions on such matters as increasing working hours or reducing salary/ wages; in such cases employees may feel reluctant to comply but may be forced to do so because that they are fearful of upsetting their employer. Moreover, affected employees may be reluctant to inform a Labour Department official or take legal action at the Labour Court as such actions may result in the employer trying to terminate their employment. Hence, if affected staff do nothing, their inaction may be deemed as implied consent to such alteration and if an employee later raises this change at the Labour Court an employee risks losing their case as it can be quite difficult for them to prove to the Court that they were unwilling to give their consent to their employer in relation to these working condition changes. Therefore, in order for an employee to safeguard their position we recommend that if an employer unilaterally tries to adjust the working conditions and they do not agree they should expressly lodge their complaint with their employer in writing so that they can later rely on it and prevent their employer arguing that the employees gave their implied consent to such changes to working conditions.
In summation, both employers and employees should be careful to protect their respective positions should their working conditions agreement(s) be amended. Employees in particular should be mindful of having all negotiated changes put in writing and lodging all complaints they may have with company proposed changes to employment agreements. Should you require any legal advice regarding Thai labour law, especially on implied consent or amending a working conditions agreement then please contact us at Woraset And Partners Co., Ltd., Tel : 081-6157504 or 081-4857939 , Email: firstname.lastname@example.org or Jareewans@gmail.com