Higher lay-off payouts flagged under draft change

Employees having worked for a company for more than 20 years will be entitled to receive a considerably higher rate of financial compensation if laid off, according to draft amendments to the 1998 Labour Protection Act.

The draft amendments propose that staff who have worked at a company for more than 20 years will receive compensation equivalent to 400 paid working days, Confederation of Thai Labour president Manas Kosol said yesterday.

He was speaking at a public hearing held to gauge opinions on the draft changes, in which most employers did not agree with the proposed higher rate of lay-off compensation.

Currently, the maximum compulsory lay-off compensation rate is equivalent to 300 paid working days, which is for those who have worked for a particular company for more than 10 years, he said.

The proposed change is being adopted based on Malaysia’s payment rate, he said, adding it is important to raise the compensation rate to bring the Thai labour protection law on par with that of other nations in Asean.

Ukrit Kanchanaket, a representative of the Employers’ Confederation of Thailand, said he personally could not agree with the proposed increase as it will result in a financial burden on employers.

Instead of raising the lay-off compensation rate, a better package of retirement benefits should be added such as an increase in contributions paid regularly into the fund of the social security system, he said.

Watcharapol Bussamongkol, president of the Security Services Association of Thailand, said small-sized businesses would be hit by the proposed rise in the lay-off compensation rate.

“Service jobs like security guards, housemaids and cleaners give those workers an opportunity who are too old to find a job at a factory.

“So, it’s not a good idea for the government to increase the burden on firms offering these jobs because with the higher lay-off compensation rate, these companies would be out of business,” said Mr Watcharapol.

Apinya Sujarittanan, deputy directorgeneral of the Department of Labour Protection and Welfare, said feedback will be taken into consideration when revising the draft before submitting it to the cabinet through the labour minister. The draft amendments are expected to be forwarded by the cabinet to the National Legislative Assembly in May.