Labor Disputes in Thailand

Labor Disputes occur when one party, often the employee, feels unfairly treated for reasons that may not be grounded in law. These disputes typically result in resentment and can erode morale.

Employers can avoid these labor disputes by ensuring that employees are correctly classified as contractors or employees and by ensuring they provide statutory benefits.

Alternative Dispute Resolution

Alternative Dispute Resolution (ADR) offers a range of measures to resolve disputes outside of the classical judicial system. This includes mediation, arbitration and conciliation.

In mediation, a neutral third party tries to help disputants reach a mutually acceptable resolution. The mediator assists the conflicting parties in exploring their interests underlying their positions, facilitating communication and helping to find solutions that are sustainable, voluntary and non-binding.

Arbitration involves the submission of a dispute to a tribunal, which will hear and decide upon the matter in accordance with the rules of procedure laid down by the Thai Arbitration Institute. On average, out-of-court arbitration proceedings take around a year. It is resorted to when the parties agree to submit their disputes to an arbitration panel or when their contracts contain a clause that requires them to submit any dispute to arbitration. Arbitral awards can be enforced in court. However, the enforcement of such awards is not always a swift process.

Mediation

Many disputes can be resolved outside of the court through alternative conflict resolution, such as mediation. Typically, disputes are settled through negotiations. Unlike litigation, mediation is a quicker and less expensive option for dispute settlement.

A mediator helps parties reach a mutually acceptable settlement by discussing the facts of their case and analyzing legal issues in the matter. The mediator will also facilitate a discussion of the goals and interests of both parties, while encouraging them to develop and consider creative solutions that may be more beneficial than those offered by the other party.

Mediation is available at both the trial and appellate levels in Thailand. Judges commonly order the parties to a dispute to participate in out-of-court mediation, particularly in family and labor disputes, and in cases where a more informal and non-adversarial method of dispute resolution would be preferable. In some instances, a judge can designate one or three arbitrators to settle a case through court-annexed mediation.

Arbitration

Labor disputes can occur in any workplace, and it is important to have a legal framework in place to address and resolve these conflicts. By fostering open communication and adhering to local labor laws, companies can minimize conflict and avoid litigation in the future.

In cases where informal methods of dispute resolution fail, the company can refer the issue to a labor court. This judicial body has the authority to hear cases related to unfair labor practices, termination disputes and other labor-related matters.

In addition, the Ministry of Labour has recently amended the Arbitration Act to make it easier for foreign arbitrators and representatives to work in Thailand. The new rules allow a foreign arbitrator or representative to apply for a visa and reside in Thailand for a limited period of time in order to conduct arbitration proceedings. This is a welcome development for international businesses that utilize arbitration to settle their labor disputes. This will enable them to reduce costs and minimize disruption to their business.

Conciliation

The dispute resolution process is a critical aspect of any business. It can be difficult to manage, especially when dealing with conflicts between employees and management.

Employers and employees are both protected under Thai labor law, which covers everything from negotiating issues to mediation by a panel of arbitrators. Employers can also use conciliation to settle disputes without filing a lawsuit, as long as both parties agree.

In addition, a negotiated settlement costs less than a lawsuit and takes much less time to resolve. However, the agreement must be enforceable (which is not always easy) and there is no internationally accepted framework for direct enforcement of a mediated settlement agreement (something that the 2019 UN Convention on International Settlements Resulting from Mediation aims to address). A competent lawyer can help you navigate the Thai workplace dispute resolution process. Having one will ensure that your rights are fully protected and help you avoid unnecessary exposure.

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