Thailand: Employer Executives Face Prison

A Thai court has denied bail and ordered the immediate detention of the individual corporate executives of an employer company responsible for the failure to pay statutory severance pay and payment in lieu of advance notice, due to 859 unlawfully dismissed employees.

The entitlement to severance pay and payments in lieu of notice arises under the Labour Protection Act. Penalties for failure to make these payments include civil and criminal liability, with a fine and imprisonment up to 6 months possible consequences.   

Despite an order from the Labor Inspector to make the payments, the employer did not comply. The matter was then referred to the public prosecutor who filed criminal charges against the individual executives.

Imprisonment of executives in these circumstances is rare. Usually, the non-payment is treated as a civil matter with the executives hiding behind the limited liability shield of the corporate entity.

This marks a significant shift in the enforcement of employee statutory rights, with severe personal consequences for individual executives who fail to ensure the employing entity is complying with labour law.

This is a high-level general update only. Legal advice should be obtained on specific circumstances.