Basic knowledge of labour law that employers must know

On 20 July 2021, True Digital Park organized an online discussion called “TDPK TALK: Basic knowledge of labour law that employers must know” to talk with legal experts from Tilleke & Gibbins about basic employment contracts for Thai entrepreneurs. 

In Thai Civil and Commercial Code Section 575, it is said that hiring is a contract whereby a person, called the employee, agrees to render services to another person, called the employer, who agrees to pay remuneration for the duration of the services. 

Hiring can be done in writing or verbal format. But in order to prevent disputes between employers and employees in the future, Chusert Supasitthumrong, a partner at Tilleke & Gibbins, suggested that business and startup entrepreneurs should have written hiring contracts instead of having just verbal agreements.

Jamorn Pornponwat, a lawyer at Tilleke & Gibbins, says that non-compete agreement is also important. The agreement prohibits employees from working with business competitors. This agreement can be in 3 types:

1. Non-competition clause: a clause that defines a certain period of time and area. The job and position matters, usually executives, managing directors, academicians, and experts are prohibited.
2. Non-solicitation clause: the contract prohibits soliciting employees to work with competitors.
3. Confidentiality clause: company confidential agreement

These are the topics startups should pay attention to. When being in the business for a while, employees may be drawn to work with competitors.

The most important issue that should be included in the hiring agreement is “Termination of the Contract”. There are 2 broad types of termination of employment.

1. Employment contract with definite duration
2. Employment contract with indefinite duration: divided into two types:
   1. Termination with a cause such as an employee neglecting his/her duties, causing harm to the employer/company, violating the law, etc.
   2. Termination without cause. In this case, the employer must notify the employee before the end of the contract and provide severance pay as well.

And the last topic that many entrepreneurs are wondering about is the  termination of employment in the Covid-19 situation. The speaker suggests that employers have the right to terminate employment, but it must be proven that the pandemic has a severe impact on the employer's business that it is unable to operate the business anymore. In this case, the employer still has to pay severance and must notify the employees in advance.

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True Digital Park is offering useful talks and events in our community events page, please check them out: https://www.truedigitalpark.com/events

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