Problems relating to Trade and Investment on Thailand

 
16. Employment
Issue
Issue details
Requests
Reference
(1) Stringent, Vexatiously Complex, and Delayed Work Permit Acquisition / Renewal. - About 80-days, maximum, are necessary to obtain the work permit. It is quite burdensome to expatriates who are exposed to the risk of illegal work charge, inability to open bank account, etc., pending work permit acquisition from the date of filing application.
Simple application made available pending acquisition of work permit is valid only for 15-days, hardly sufficient to cover the period (maximum 80-days) necessary to acquire work permit.
In addition, relative to the filing of application for work permit, GOT requires applicant's signature on all pages of numerous application documents, consuming much applicant's time.
- It has become necessary hereafter for the accompanying family members to appear before immigration bureau.
- GOT compels entry visa holder with business purpose to obtain after entry additionally work permit, which includes documents only available in Japan. Should exigency of business compel extension of short stay visa (within 15-days), necessitating acquisition of work permit, no responsive action is open. Simply, there are too many requisite documents.		 - It is requested that GOT in regard to work permit Issuance:
-- simplifies the application procedures,
-- streamlines the application procedures by repealing the signature requirement on all pages of the application documents.
- It is requested that GOT:
-- excludes business visa holder from onus of obtaining work permit, and
-- simplifies the documents necessary for work permit acquisition.		 - The Alien Occupation Law
- Foreign Business Act B.E. 2542 (1999)
  (Action)
- The normal procedure for foreigner's acquisition of Work Visa in Thailand is to enter Thailand with Non-Immigrant Visa Type B (Non-Immigrant Visa B) or Type O (valid for 90-days), and file request for extension of the Stay Visa upon entry into Thailand. Further, "when a Japanese natural person files application for Non-Immigrant Visa B, Proof of Application relative to Application for work permit under the provisions of this Chapter is not normally required" (Article 118, Japan-Thailand EPA).
In addition, immediately following the entry, it is necessary for the applicant to acquire work permit apart from the Non-Immigrant Visa. In the event, the applicant repeats entry/exit during the Visa validity, the applicant must separately obtain Re-Entry Permit (valid for one year after the entry date).
  (Improvement)
- By virtue of the Japan-Thailand Economic Partnership Agreement enforced on 1 November 2007 (EPA), employers are no longer required to file applications for business visa or for work permit on behalf of its employees. Also, all Japanese intra-corporate transferees of a branch or affiliate importing foreign currencies into Thailand not less than Bh. 3 million are authorized to access One Stop Service Centre for Visa and work permit applications.
- Under the Japan-Thailand Economic Partnership Agreement enforced since 1 November 2007:
1) GOT guarantees the procedure that begins with
a) issuance of commercial visa (non-immigrant B-visa), followed by
b) 90-days stay authorized upon entry into Thailand,
c) issuance of work permit during the 90-days authorized stay, and
d) extension of visa/work permit up to 1 year.
2) GOT will consider streamlining the application procedure for a business trip with a short stay (within 15 days) to see if fling of application by Facsimile can be accepted and will reach conclusion within one year.
- Since 4 January 2010, GOT has integrated the window for stay permit and work permit applications at One-Start-One-Stop Investment Centre in Bangkok, facilitating the filing procedure for stay permit and work applications.
- Japan-Thailand EPA under Article 118 "Requirements and Procedures Relating to the Movement of Natural Persons" specifically sets forth: "Proof of work permit application (WP3 Prior Application) under Section 8 of the Working of Aliens Act is not required when natural persons of Japan apply for a Non-Immigrant B visa in Japan".
(2) Complex / Delayed Procedures for Acquisition if Work Permit for Short Term Business Trip - GOT requires, in principle, work permit for entry even for a single day business trip, provided, however, that work permit acquisition is excused for a stay within 15-days, restricted, however, only to work of "emergency" and "necessity." Its acquisition remains extremely difficult for reasons of attending conferences, market research, etc. Therefore, it is not much accommodating. The submission procedures have been deregulated, as it is now accepted by e-mail or by hand at Suvarnabhumi international airport.
- Urgent work permit (WP10) notification is no longer necessary for the purposes of attending conferences, provided, however, that its notification requirements continue as before at the window. While announcement was made to begin acceptance of e-mail notification, it has not yet materialised. Moreover, notification is not possible on certain days when governmental offices are closed, etc.
Visitors on a 30-days short stay business trip, after filing application for work permit at BOI, in many cases, are already back in the home country by the time the work permit is finally issued.		 - It is requested that GOT further deregulates the procedural requirements by obviating the need for notification for a short term (within 30-days), low frequency (within 4-times a year) entries, etc.
- It is requested that bureau of immigration, ministry of labour expressly identifies whether or not work permit, visa are required, by giving sample cases.		 - The Alien Occupation Law
(3) Restrictions in the Alien / Thai Nationals Ratio - A foreign funded enterprise is responsible to employ at the ratio of 4-Thai nationals to 1-Japanese employee.
- The number is restricted for the alien workers in the local representative's office.
- Work Visa for foreign workers are restricted to the ratio of 1 to 4 between foreign worker and indigenous Thai. In addition, minimum 2-million Bahts paid-up capital fund registration per foreign worker is necessary. Unless either of the following conditions is satisfied, the maximum number of work visa issued is 10:
(a) The amount of income tax paid in the preceding year by the employer is more than 3 million bahts.
(b) The employer is engaged in export business with foreign exchange revenue corresponding to minimum 30 million bahts in the preceding year.
(c) The employer operates tourism business, with more than 5,000 foreign tourists invited to visit Thailand in the preceding year.
(d) The employer employs minimum 100 Thai nationals.
- Relative to foreign funded enterprises, work visas for foreign workers are restricted to the ratio of 1 to 4 between foreign workers and indigenous Thai. For SMEs (Small-to-Medium-sized Enterprises (SMEs)), it is not easy to increase the number of foreign workers.		 - It is requested that GOT deregulates the restrictions.
- It is requested that GOT deregulates by large margin regulation on foreign workers employment.
- It is requested that GOT deregulates the restrictions.		 - Foreign Business Act B.E. 2542 (1999)
- Immigration Act
- Department of Employment Regulation 14
  (Action)
- Aliens working in Thailand are governed by the Alien Work Permit Act of 1978, which in turn governs the issuance of work permits by the Department of Employment. The Department considers the economic needs of Thailand when deliberating the issuance of a work permit such as the alien's qualifications, whether or not the position could be filled by a Thai national, and the ratio of nationals to aliens employed in the firm.
- Aliens employed under the Investment Promotion Act or other forms of government contracts typically have less difficulty procuring work permits. Aliens employed under the Investment Promotion Act are issued permits of a specific duration as governed by the certificate of promotion. Furthermore, if an alien is engaged in a seminar or meeting of less than a 30-day duration with the government or state-owned enterprises, that alien is exempt from complying with the Alien Work Permit Act ("AWP").
- In 2001, the fees for issuance of AWP's were increased by 10 times.
- According to the announcement made by Ministry of LSW on 30 September 2004:
-- It is aiming at reducing to 30 days the period required from filing of the application to the issuance of AWP's;
-- The period of AWP's shall be for one year, uniformly to all applicants;
-- Conditions for AWP shall be:
1) 1 AWP for Bh.2 million of capital, in regard to enterprises incorporated under the Thai laws,
2) 1 AWP for Bh.5 million of capital, in regard to enterprises incorporated under the Foreign Business Act (Minimum Capital)
3) 1 AWP for Bh.3 million of foreign currency income.
- Department of Export Administration has changed, since 1 October 2006, Immigration Visa Regulations, so that the pass port holder of 36 countries (including Japan) entering Thailand without visa may stay in Thailand for 90 days maximum in six months.
  (Improvement)
- An alien business entity registered with BOI as Investment Promotion Industry or located in industrial zone controlled by Industrial Estates Authority of Thailand (IEAT) has relatively less difficulty in obtaining work permits. Otherwise, 4 local workers must be employed against 1 alien applicant for work permit as of now.
- In an effort to simplify AWP procedures, GOT established a "One Stop Service Center" for visas and permits. For enterprises with assets in excess of Baht 30 million, the renewal, and even the application in some instance, may be processed in just one business day. Conversely, for a business with registered capital of between Baht 2 and 30 million, such a process will likely take 7 days, provided however that, the validity of the AWP remains the minimum of the visa validity and is no more than one year.
- Under the Japan-Thailand Economic Partnership Agreement enforced since 1 November 2007, GOJ and GOT mutually agreed that parties would (1) decide on the quota for alien work permit and its cap within two years of its enforcement, (2)decide on the employment obligations of the Thai nationals within 3 years of its enforcement and (3)the minimum monthly remuneration of Thai nationals was relaxed from Bh.60,000 to Bh.50,000.
(4) Steep Spiraling of Minimum Wages - Since April 2012, minimum wage of 300 bahts/day has been applied in Capital City Bangkok and in its Peripheral Provinces, spreading across the country since January 2013. It has been a factor pushing up the labour cost in Thailand.
- No control is exercised over the minimum wage.		 - It is requested that GOT reviews the Minimum Wage Act (such as set up of minimum wage per region).
- No control over minimum wage diminishes the competitive edge of Thai industries.		 - Labor Protection Act BE 2541 (1998), Section 87
- Articles 79(3) and 88 of Labour Protection Act B.E. 2551 (2008) as amended by Labour Protection Act No.3 (2008)
- Labour Law
- Minimum Wage Labour Law
  (Action)
- On 5 September 2012, Thai Central Wage Commission decided the minimum wage at 300 bahts/day across-the-board throughout the nation, applicable from 1 January 2013 and would be pegged at this level until 2015 While wages are higher than 300 bahts/day in the metropolitan areas of the 7-Provinces, Bangkok, Nakhon Pathom, Nonthaburi, Samut Prakan, Samut Sakhon, Pathum Thani and Phuket in the South, it means the wage increase in the rest of the 70-Provinces.
- The minimum wage (per day) will be fixed at 300 bahts per day at a uniform nationwide level, until June 2016.
(5) Chronic shortage of Human Resources Supply - Chronic shortage prevails for human resources in managerial post, such as personnel, accounting, IT, and engineers with abilities and experience. In addition, it has become difficult to procure assembly-line workers.
- Chronic shortage prevails in managerial staff, while the same problem has spread to line workers. Domestic drop in unemployment ratio has brought about difficulty in employment of quality workforce, and aggravated retention rate.		 - It is requested that GOT makes all out effort countrywide for beefing up fostering of human resources.
- It is requested that GOT:
-- makes all-out efforts in fostering human resources, and
-- repeals the legislative requirement for employment of indigenous Thai, when employing foreign workers.
-- deregulates the restrictions on job categories, which are closed to foreign workers.		 - Order No.777/2551 of the Royal Thai Police dated November 25, 2008.
- The Alien Occupation Law
(6) Low Employees Retention Rate - Low retention rate of staff employees in Thailand is a problem common to the industry. (While it is possible they have hopped to other industries) it remains as a task facing the local production.
- High job turnover disables retention or new acquisition of human resources. While MFS had envisaged increased number of local workers in 3-years, it resulted in shrinkage. Professional skills declined across the board, from sales, service, to administration (accounting, general affairs, office work), while their wages have gone up by a large margin.		 - Should GOT hit upon some bright idea for up keeping of Retention Rate, or be aware of case examples of other firms, its elucidation is appreciated.
- It is desirable if large enterprises refrain from hunting human resources with attractive fringe benefits on top of high wages.
(7) Difficulty in expanding the use of Foreign Workers in EAI - From the need to adjust workforce numbers proportionate to slack or busy interval of operation, active use of short-term workers cannot be neglected. However, BOI's direction prohibits employment of foreign workers in Electric Appliance Industry (EAI). - It is requested that GOT takes step to enable employment of foreign workers in EAI. - Investment Promotion Act, B.E. 2520, amended by, Investment Promotion Act (NO. 2), B.E. 2534, Article No.25 or No.26
(8) Restricted Term-Contract Workforce - GOT approves term-contract only for work which is seasonal or temporary. - It is requested that GOT establishes the system that guarantees flexible adjustment of workforce. - Labour Protection Act, B.E. 2541
(9) Difficulties in Labour”¾Management Negotiation - Rough sledding in labour”¾management negotiation takes place in each year as the wage hike rate tends to get higher in each year across the nation. Labour demands, devoid of rhymes and reasons, take no heed of ups and downs in production, so that refusal of overtime, union meetings, etc. readily results from employers' failure to meet the labour demand in full, impacting production schedule. This is the problem shared among the majority of Japanese affiliated enterprises. - It is requested that GOT takes steps to foster a sound development of labour union activity. - Labour Protection Act
- Labour Relations Act

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