Disputes in the workplace are inevitable and can often cause conflict and tension between employers and employees. In many instances, out-of-court dispute resolution mechanisms, such as mediation and conciliation are preferred over litigation.
Labor laws ensure that both parties are treated fairly. This fosters high moral standards, promotes productivity and boosts employee retention rates.
In Thailand, unions are legal associations of employees that exercise their rights and duties to demand better employment conditions. Only workers who have at least 20 years of service and at least one year of continuous employment can form a union. In addition, the members should have no supervisory functions or any responsibility in terms of recruitment, promotion, sanctions and termination. The unions can only submit demands to companies on behalf of its members.
However, the fragmentation of Thai enterprises prevents most workers from joining a union. The 1975 Labor Relations Act stipulates that at least ten workers must be in the same enterprise to form a union. This means that 70 percent of workers in the country are not allowed to join a union.
Union leaders in Thailand face anti-union discrimination from employers and a paternalistic regime. They must work to build alliances with student labour activists, who oppose paternalism in the education system and are willing to fight for democratisation and sustainable civilian rule.
In recent years, mediation has become an important dispute resolution tool in Thailand. As such, it is now an integral part of the civil litigation process and even includes pre-litigation mediation.
Mediation allows the parties to negotiate with a neutral third party, who is able to understand their viewpoint and help them identify common interests. As a result, parties are given greater agency and decision-making power and may arrive at an outcome that is mutually satisfactory, rather than one imposed by the court.
The mediator will then facilitate the parties in engaging in discussion with each other, focusing on incremental compromises from both sides towards settlement. The mediator can also conduct private meetings with individual Parties if appropriate. If a settlement is reached, it will be documented as a mediated settlement agreement (MSA). The parties will then have to agree on the arbitrators. If they are unable to do so, the matter will be referred to arbitration by a tribunal.
Employers with operations in Thailand need to understand the pitfalls of changing conditions of employment, such as changing work hours or reducing salary, since these changes may result in unlawful changes to legally protected rights and entitlements. Such changes can cause colorable objections from employees and lead to labor unrest and legal proceedings.
Arbitration is a dispute resolution method in which the parties select an impartial third party to make a ruling on their case. Typically, arbitration hearings are conducted in a manner that is less formal but similar to a court proceeding. The arbitrator will examine evidence and question both parties to the dispute. The arbitrator will then make a binding decision on the matter. The 2002 Arbitration Act grants Thai courts the power to set aside an arbitral award, if the award has been subject to annulment proceedings at the seat of arbitration. However, Thai courts will be very conservative in their application of such remedies.
As Thailand moves steadily towards a’modern’ labour system, regulation of working conditions and employee rights are improving. This is partly driven by a growing openness to civil society influence on policy making, and to a degree by globalization and increased external pressure on Thai government.
However, a large proportion of workers are still in informal sector industries, where unionisation is low. This reflects cultural factors as well as a lack of encouragement from political leaders.
Disputes may arise on the terms and conditions of employment including wages, hours worked, vacation and sick leave and overtime payment. Other issues include the calculation of severance pay, relocation of work places and termination of contracts. In addition, disputes over services affecting the public such as ports, rail transport and telecommunications may be referred to the labor dispute resolution committee. If the conciliation process fails, employees have the right to appeal to a court of law. Litigation in such cases is complex and expensive.