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ASIA LABOR LAW BULLETIN Vol. 2, No. 1 March 19, 2007 Disclaimer
– This newsletter is intended to provide general information from
our independent group firms and should not be relied upon for legal
advice on any particular matter; for any questions or legal advice
kindly contact the corresponding group lawyer.
Australia
Long stay temporary business visas
(Sub-class 457)
Among the visas available to foreigners in Australia is the
so-called long stay Sub-class 457 temporary business visa which
allows overseas staff to reside temporarily and work in Australia
for up to 4 years. The application process for a sub-class 457 visa
consists of three components: sponsorship, nomination and visa
application. Sponsorship application The employer (or an entity
related to the employer) must apply for sponsorship status. As part
of the sponsorship application the employer must demonstrate that
it has good financial standing and a satisfactory history of
compliance with immigration laws, and (if the sponsor is to be an
Australian subsidiary or other Australian entity) that it has a
satisfactory record of, or a demonstrated commitment towards,
training Australian citizens and Australian permanent residents.
Sponsor’s undertakings By sponsoring an employee under a sub-class
457 visa, the sponsor gives a number of undertakings to the
Australian Government in relation to the sponsored person and
accompanying family members. Those undertakings include
financial commitments by the sponsor, such as (among others)
to:
• ensure that the cost of return travel by a sponsored person
and his/her dependents is met;
• pay all medical and hospital expenses for a sponsored person
that are not covered by insurance;
• pay any costs incurred by the Australian Government in
relation to a sponsored person (e.g. locating and detaining the
sponsored person).
Nomination of the position The nominated position to be filled
by the overseas employee has to be one of the occupations listed in
the governmental Gazette Notice as applicable at the time. In
general, these are occupations for executives, managers and
experts. The position must also meet the minimum salary requirement
which is currently (for occupations other than IT related
occupations) a base salary of AU$41,850 per year based on a 38 hour
working week. Visa application The employee and his/her dependants
must lodge a visa application and meet health and character
requirements. The employee must have the qualifications and work
experience required to fill the nominated position. What if the
employee relationship ceases? Sponsoring an employee under the
sub-class 457 visa regime does not compel an employer to stay in a
contractual relationship with the sponsored employee for the full
term of employee’s visa (being up to 4 years). An employment
contract can be terminated according to its terms at any time.
However, if the employment relationship comes to an end, the
employer is obliged to notify the Department of Immigration and
Citizenship (DIAC) of this within 5 working days. DIAC then
generally notifies the employee of impending visa cancellation.
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Is the employee permitted to change employer? A sub-class 457
visa is linked to the employer who sponsored the employee. This
means that if the employee wishes to change employer, a new
sub-class 457 visa under the sponsorship of that new employer has
to be applied for. Can the employee’s spouse work? Generally, the
dependant spouse (or de facto spouse) included in the application
of a sub-class 457 visa holder is permitted to engage in employment
(for any employer) during the validity of the sub-class 457 visa.
It is, however, necessary to check the specific conditions under
which the particular visa is issued.
Contact: Philip Mitchell TressCox, Sydney Group email :
[email protected]
China New Labor Law Generates Controversy One of the most
controversial laws ever to be considered in recent times in China
is the proposed new Labor Law. It has been under consideration for
two years and has received apparently over 200,000 comments and
submissions by stakeholders. Why is it so controversial? Generally,
because draft versions were thought to give too much power and
rights to employees, and this did not go over well in a system that
was already thought by many to favor employees at expense of
businesses. Later drafts have addressed this concern and tried to
create more balance. Here we summarize the major changes proposed
in the law. Contract terms related provisions:
• Presumption in favor of the employee regarding the existence
of the employment relationship and towards the
content of the employment contract clauses in case of
discrepancy.
• In case of a “de facto” employment relationship (relation that
amounts to an existing employment relationship but without a
written employment contract), unless the employee wishes otherwise,
the employer is deemed to have established a permanent
contract.
• Probation shall apply to labor contracts with terms longer
than three months. There are different provisions for probations
for non-technological positions, technological positions and
highly-skilled technological positions.
• Non-competition has been codified for the first time, with
maximum period of two years. The employer must give the employee
compensation of at least one years’ salary. If case of violation
the employee shall pay a fine to the employer which shall be no
more than three times the compensation paid by the employer in
consideration of the non-competition restriction.
• If the employer provides full time
professional training for a period of at least six months he may
require the employee to complete a particular period of employment.
In the event that the employee is in breach of this service period
requirement the employer may impose a fine
Termination of Labor Relationship related provisions:
• For those employees who maintain employment relationships with
more than one employer, impacting adversely upon the performance of
his or her duties and refuses to rectify the position after an
employer has raised the performance
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problems, the draft provides that this sole circumstance justify
the immediate termination of the labor relation at the employer’s
request.
• On one hand the concept of “redundancy” is expanded to include
“all material changes in the objective circumstances”, so there is
a widening of the situations where an employer is likely to be able
to justify dismissals by reason of redundancy. On the other hand
the draft imposed more restrictions seeing that if 50 or more
employees need to be made redundant, the employer must inform the
trade union or, alternatively, provide that information to all of
its employees.
Employees’ organization related provisions:
• Rules and regulations which directly involve the personal
interest of employees must be adopted through the use of one of the
three democratic options known, namely: trade union, staff meeting,
or staff representative meeting. If these are put in place
unilaterally by the employer will be deemed invalid and the rules
and regulations proposed by the trade union, staff meeting, or
staff representative meeting will be implemented.
• The employer must notify the trade union in advance of any
termination of the employment contract by the employer.
Foreign investors are generally of two minds regarding the draft
law, one group called the “European group” is familiar and
supportive of the balance between employers and employees and the
second “American group”, which feels the balance is tilted too far
in favor of the employees. It will again be considered by China’s
National People’s Congress when it meets Spring 2007 and it is
generally
believed it will be passed into law at that time. Contact:
Blaine Turnacliff Lehman, Lee & Xu, Shanghai Group email :
[email protected]
Indonesia Labor Union Rules Changed The basic legislation
governing labor unions in Indonesia is Law No. 21 of 2000 Regarding
Labor Unions (“Law 21”). Law 21, which was implemented by several
Ministry of Manpower (“MOM”) decrees and regulations, has
significantly changed Indonesian law on labor union issues. Prior
to the enactment of Law 21, Indonesia ratified International Labor
Organization Convention No. 87 concerning Freedom of Association
and Protection of the Right to Organize, pursuant to Presidential
Decree No. 83 of 1998. By this ratification, the Government of
Indonesia guarantees employers and employees the right to establish
labor unions without government intervention. The government’s
current involvement in this area lies solely with the registration
of unions. A group of at least ten employees is entitled to
establish a labor union. Notification and registration of labor
unions is governed by MOM Decree No. Kep-16/MEN/2001. According to
this regulation, labor unions must give written notification to the
local Department of Manpower and Transmigration in order to be
registered. A labor union must apply for registration by attaching
its articles of association and by-laws, a list of the names of the
management, the composition of the management, the members of the
union and its official name. Despite the fact that the Government
of Indonesia does not currently intervene in the establishment of
labor unions, labor
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unions are required by law, based on Pancasila (basic
fundamental of the Republic of Indonesia) and the 1945 Constitution
to be democratic, independent and responsible, and not to base
membership on politics, religion, race and/or gender.
MOM Decree No. Kep.187/MEN/X/2004 Regarding Employee Union
Contribution Fees provides that a registered union is entitled to
request an employer to collect union dues from the union’s members
if the union meets certain administrative requirements. The
employer must collect the dues in accordance with the request of
the union, transfer the money to the union’s bank account and
provide evidence of the transfer to the union’s management.
Law 21 states that the objective of a labor union is to: (i)
improve the members’ skills, knowledge and productivity; and (ii)
improve the protection of members. Law 21 permits a union to be
disbanded by the following reasons: (i) if its members agree; (ii)
if the company goes out of business; or (iii) if the union is
closed by a court, if the labor union has principle contrary to
Pancasila and the Constitution of 1945, as well as having the
executive board and/or the members on behalf of the labor union are
proven to have committed crimes against the state security and are
sentenced to prison for minimally 5 years which already have
binding legal force. A registered union can (i) represent employees
in labor disputes, (ii) negotiate a collective labor agreement with
the employer, (iii) establish institutions or undertake activities
to improve employees welfare, (iv) plan, implement and take
responsibility for employees strikes and (v) represent employees in
attempting to obtain share ownership in the company. Law 21 permits
the union to affiliate with an international union or federation.
Law 21 imposes criminal sanctions on anyone who engages in certain
anti-union activity. Such activities include (i) preventing
employees from forming a labor union, becoming a member of a
labor union or conducting labor union activities, (ii)
terminating an employee or reducing their salary for conducting
labor union activities, (iii) conducting an anti-labor union
campaign, and (iv) intimidation in any form. The penalty for
criminal sanctions are one to five years of imprisonment and a fine
of Rp.100 million to Rp.500 million.
Further, the Indonesian Labor Law, Law No. 13 of 2003 Regarding
Labor (“Labor Law”), rules that termination of an employment
relationship shall not be permitted if it is based on ideology,
religion, political inclination, ethnic group, race, social group,
sex, physical condition or marital status of the employee (Article
153 (i) of the Labor Law). Any termination based on one such
discrimination will be void by law and the employer must reinstate
the employee. The Labor Law prohibits termination of employees in
connection with the labor union in which the employee establishes a
labor union, becomes a member or part of the management of a labor
union, or conducts union activities outside office hours or during
office hours by the agreement of the employer or pursuant to the
provisions of the employment agreement, company regulation or
collective labor agreement.
Contact: Ira Eddymurthy; Moh. Fajar Yanuardi SSEK, Jakarta Group
email : [email protected]
Japan
New Labor Conciliation
Proceedings in Japan
The new Labor Dispute Conciliation Proceedings Act became
effective on April 1, 2006. The new law aims to expedite the
resolution of certain labor disputes between employers and
employees such as termination of employment contracts, and unpaid
salaries or severance payments, separate from the usual court
procedures so that
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such labor disputes will be resolved within three hearings.
These proceedings are characterized as alternative dispute
resolution proceedings (“ADR”) and are determined by a panel
consisting of three professional members; a judge and
representatives of the employer and the employee who have
considerable experience in labor disputes. This new ADR will take
place under the aegis of the district courts.
The gist of the new proceedings is as follows: 1. the first
hearing date will be set
within 40 days from the date of the filing of the petition for
the dispute;
2. the time spent for the first hearing
will be at least an hour; 3. the petition and the answering
documents must demonstrate the contents of the dispute in full
so that the panel members can understand the facts and the issues
of the dispute in as detailed a form as possible;
4. oral presentation is strongly
recommended rather than documentary evidence;
5. the petitioner and the respondent
himself/herself must attend the hearing together with counsel
(if any);
6. conciliation of both parties will be
strongly encouraged in order to settle the dispute by mutual
agreement although a decision will be rendered by the panel if the
dispute cannot be resolved by conciliation;
7. if the panel decision is not objected
to by either of the parties, such decision will become final and
enforceable, and
8. either party may object to the
decision of the panel whereupon the dispute will be decided by
the district court.
Since there are only three hearings in these proceedings, both
parties must analyze the issues of the dispute well in advance and
prepare their brief and evidence in a concise manner. In this
sense, each party should be encouraged to hire experienced counsel
to prepare the briefs and evidence for the hearings. More than six
months have passed since the introduction of new ADR in the
resolution of labor disputes. These proceedings have generally been
welcomed by both employees and employers since the disputes are
resolved more quickly than through the traditional court
proceedings. To date, most of the disputes have been settled at an
early stage - usually within six months or so. The success of the
new labor conciliation proceedings is an encouraging sign of the
effectiveness of ADR in labor disputes.
Contact: Hiroyuki Kanae New Tokyo International Law Firm Tokyo
Group email : [email protected]
New Zealand Air New Zealand Holidays Act Decision
The Court of Appeal has recently dismissed the appeal of Air New
Zealand against a decision of the Employment Court under the
Holidays Act 2003 in relation to public holidays. The case was
taken by the Airline Pilots’ Association (‘the union’) in relation
to the provisions of a collective agreement in place between it and
Air New Zealand. The collective agreement provides for a rostering
system for pilots. The system means that each year, a pilot is
likely to work on some of the 11 public holidays specified in the
Holidays Act.
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The agreement, which was concluded under the Holidays Act 1981,
provides that rather than receiving additional remuneration in
exchange for working on public holidays, pilots receive eleven
additional days’ leave, regardless of the number of public holidays
actually worked. The Holidays Act 2003 provides that employees who
work on public holidays and would normally work on that day are
entitled to “time and a half” pay and an alternative holiday. The
union conceded that the entitlement to an alternative holiday was
covered by the 11 days’ extra leave. However it alleged that the
agreement did meet the minimum requirements of the Holidays Act
2003 because pilots were not paid time and a half for working on
public holidays. Air New Zealand contended that the agreement did
meet the Act’s requirements, arguing that the Act allowed it to
agree with the pilots to transfer the observance of public holidays
and the entitlements that go with them to another day – within the
eleven days’ extra leave. Because the pilots never worked on these
transferred holidays, time and a half requirements never arose. The
Court of Appeal was asked to determine:
• Whether an employee’s public holiday entitlements could be
transferred to another day; and
• If transfers were permitted, whether this collective agreement
effected such a transfer.
The majority of the Court of Appeal considered the relevant
provisions of the Holidays Act 2003. It noted that the Act provides
minimum entitlements, and that agreements that exclude, restrict or
reduce employees’ entitlements would be of no effect to the extent
that they did so. Section 44 of the Act specifies eleven public
holidays. Subsection 2 of that
section provides that “an employer and employee may agree
(whether in an employment agreement or otherwise) that any public
holiday … is to be observed by the employee on another day”.
Subsection 3 provides that such an agreement cannot diminish the
total number of paid public holidays that would otherwise be
available. Under section 50 of the Act, employees who work on
public holidays are paid time and a half. Section 56 provides an
entitlement to an alternative day’s holiday. 8 Air New Zealand
accepted the time and a half requirements, but argued that where an
employee agrees to transfer a public holiday (under section 44(2)),
and therefore observe it on a different day, time and a half will
only apply if the employee works on the day that they observe the
holiday. The union contended that an employer and employee could
not agree to transfer the day in respect of which time and a half
would apply. It argued that pilots should be paid time and a half
whenever they worked on a public holiday stipulated in the Act. The
majority of the Court of Appeal disagreed with the union’s
argument. It illustrated the problem with it accordingly: A
non-Christian employee says to his employer, “Christmas Day has no
significance for me, but a feast day in my religion does. I would
like to swap the Christmas Day public holiday for the feast day”.
The employer agrees to this variation of the employment
arrangements between them. It seems unlikely that Parliament would
have wished to impose on an employer that agreed to this request an
obligation to pay the employee time and a half on Christmas
Day.
Accordingly, the majority held that if an employer and employee
agreed to transfer the observance of a public holiday to a
different day, that different day would be treated as the public
holiday for the purposes of any entitlement to time and a half.
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Having concluded that an employer and employee could agree under
section 44(2) to transfer the observance of a public holiday, the
majority went on to consider whether in this case such an agreement
had been reached between Air New Zealand and the union. Air New
Zealand argued that the agreement for 11 days’ extra leave for
pilots in exchange for them working on public holidays was such an
‘exchange agreement’ under section 44(2). The Court of Appeal found
that the Holidays Act 2003 required that where an agreement was
entered into to under section 44(2) to transfer the observance of a
public holiday to a different day, this different day would have to
be a particular and identifiable day. Such identification would
mean that employers and employees could easily tell whether time
and a half would apply on the public holiday as specified in the
Holidays Act, or on the day it was agreed the holiday would be
observed, if the employee worked on either of those days. Because
individual days could not be identified in the agreement between
Air New Zealand and the union, there was not a valid exchange
agreement. Accordingly, time and a half applied to the public
holidays specified in the Act that pilots had worked on since the
Act came into force. As a postscript, the Court noted that : …the
explanatory note to the Holidays Bill [began] with the confident
statement “The Holidays Bill implements government policy by
providing entitlements that are easy to understand and apply’” .
The Court noted that in this case it had been faced with three
different, credible interpretations of the Act, which “would tend
to suggest that the objective of providing for entitlements that
are easy to understand and apply has not been met.” While agreeing
with the majority on the overall result, Justice Chambers disagreed
on the first issue. He considered that the specified public
holidays are especially significant, and accordingly employees
should generally be allowed to observe them or to receive time and
a half for working on them. He considered that the majority’s view
would allow employers to avoid the time and a half regime “by the
simple expedient of an agreement to transfer the public holiday”.
On the assumption that many employers would push strongly for such
transfer agreements, Justice Chambers saw the majority’s conclusion
as meaning that the only time the time and a half and ‘alternative
holiday’ provisions would apply was the unlikely event that an
employee ended up working on the day to which they transferred
observance of a public holiday. Contact: David Quigg Quigg
Partners, Auckland Group email :
[email protected]
Philippines Control Test of Employment Relations --
Qualified To determine the existence of an
employer-employee relationship under Philippine jurisdiction, the
Supreme Court has consistently applied the “four-fold” test which
has the following elements: 1) Who has the power to select the
employees; 2) Who pays for their wages; 3) Who has the power to
dismiss them; and 4) Who exercises control in the methods by which
the work is accomplished. The most important test is the last, the
so-called “control test”. Under the “control test”, there is an
employer-employee relationship when the person for whom the
services are performed reserves the right to control not only the
end achieved but also the manner and means used to achieve that
end.
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The instant case under review (Leonardo, et al. vs. Court of
Appeals, et al., GR No. 152459, 15 June 2006) presents to us a
qualification on the “control test” ruling. In the case, BALTEL, a
franchise holder of telephone service operations, hired
complainants-employees for various positions in the company.
Subsequently, BALTEL and DIGITEL entered into a management
contract. Under the contract, DIGITEL was to provide consultancy
and technical expertise in the management, administration, and
operation of BALTEL’s telephone service. In 1994, BALTEL ceased
operations due to serious business losses. As a result,
complainants’ services were terminated. Not too soon, complainants
filed an action for salary differentials and illegal dismissal
against BALTEL and DIGITEL. DIGITEL denied liability on the ground
that it was not complainants’ employer. The pertinent issue to be
resolved by the court is whether DIGITEL can be held jointly and
severally liable with BALTEL. Based on the findings of the court,
DIGITEL undoubtedly has the power of control. However, DIGITEL’s
exercise of the power of control necessarily flows from the
exercise of its responsibilities under the management contract.
Thus, it was held that the “control test” has no application in
this case. Ergo, no employment relations exists between
complainants and DIGITEL; DIGITEL was therefore not liable in
solidarity with BALTEL. We agree with the ruling of the Supreme
Court in the instant case. Although it was not enunciated therein,
the said ruling is in consonant with the long settled principle
that “control test” only requires the existence of the right to
control the manner of doing the work, not necessarily the actual
exercise of the power. It is not essential for the employer to
actually supervise the performance of duties of the employee. It is
enough that the former has the right
to wield the power (Dy Keh Beng vs. International Labor and
Marine Union of the Philippines, L-32245, 25 May 1979; MAM Realty
Development Corporation vs. NLRC, et al., GR No. 114787, 02 June
1995; RVM vs. NLRC, et al., GR No. 103606, 13 October 1999). In the
present case, albeit the power of control was delegated to DIGITEL
by virtue of the management contract and the latter has the actual
exercise of it, in truth and in fact, BALTEL is the real possessor
of such right and definitely reserves the right to control.
Contact: Herminio A. Liwanag; Ernesto T. Caluya Jr. JGLaw,
Philippines Group mail : [email protected]
Singapore Fair Employment Practices Initiative
The Tripartite Alliance for Fair Employment Practices (TAFEP)
was formed in May 2006 and is committed to adopting a concerted,
promotional and educational approach to raise awareness and share
knowledge on fair employment practices. Since its formation, TAFEP
has recently undertaken several new initiatives to promote the
adoption of fair and responsible employment practices in Singapore.
The Tripartite Alliance for Fair Employment Practices TAFEP has
adopted the following terms of reference: a. Formulate guidelines
for fair
employment practices towards workers of all ages, genders, races
and religion;
b. Initiate a fair employment movement
through national and sectoral programmes to facilitate broad
and
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effective adoption of fair employment practices;
c. Partner relevant agencies to develop
industry capability and training programmes for managers,
supervisors and union leaders on fair employment practices;
d. Profile case studies and best
practices to create greater awareness and to facilitate sharing
of experiences among employers, unions and the public; and
e. Give recognition to employers that
are exemplary in implementing fair employment practices.
With a view to changing the mindsets among employers, employees
and the general public towards fair employment practices, TAFEP has
formulated the Employers Pledge of Fair Employment Practices (the
“Pledge”), which includes the five key principles of fair
employment as follows: 1. Recruit and select employees on the
basis of merit, such as skills, experience and ability,
regardless of age, race, gender, religion or family status.
2. Treat employees fairly and with
respect and implement progressive human resource management
systems.
3. Provide employees with equal
opportunities for training and development based on their
strengths and needs, to help them achieve their full potential.
4. Reward employees fairly based on
their ability, performance, contribution and experience.
5. Abide by labor laws and adopt
Tripartite Guidelines which promote fair employment
practices.
At its launch event on 6 September 2006, 173 companies committed
themselves to the 5 key principles of fair employment practices by
signing the Pledge. Since then, TAFEP has continued to promote
awareness of the principles of
fair employment practices and to encourage more companies in
Singapore to commit to the Pledge.
The problem of discrimination primarily takes root in the
mindsets of employers and employees alike. Therefore instead of
enacting non-discrimination laws, the Tripartite partners believe
that discrimination in the workplace should be dealt with by
promoting awareness through workshops, seminars, focus group
discussions, training programmes and promotional materials. The
formation of TAFEP and its formulation of the five key principles
of fair employment practice bode well in this respect. The
Tripartite partners will also consider revising the Code of
Responsible Employment Practices which was issued in December 2002.
The Code encourages self-regulation on the part of employers and
employees in areas of employment including recruitment, selection,
appraisal, job upgrading, posting and training, as well as terms
and conditions of employment. Contact: Natalie Goh ATMB Law
Singapore Group email : [email protected]
Taiwan New National Immigration Administration to Handle Alien
Resident Certificates The beginning of 2007 marked the opening of
Taiwan’s National Immigration Administration (NIA), which absorbed
many responsibilities and personnel from National Police Agency,
Ministry of the Interior, as well as airport and harbor police
forces. The government has touted the NIA as a streamlined solution
to deal with a recent influx of immigrants to Taiwan, as well as
handle visits by
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increasing numbers of Chinese business professionals and
tourists. Of interest to most foreign professionals in Taiwan is
that alien resident certificate and permanent residency
applications, visa renewals and lost passport declarations will now
be handled by the National Immigration Administration.
Additionally, visas and resident permits for Macau, Hong Kong and
Chinese visitors will now be handled by the new administration, as
will alien residence certificate applications for foreign,
blue-collar workers. The administration has a total of 25 offices
around the island. It should be noted that work permits are still
being handled by the Council of Labor Affairs, the Ministry of
Transportation and Communications, or the Hsinchu Science Park
Administration, depending on the type of work permit needed.
Although the new administration has promised to lessen the
bureaucracy involved with applying for and amending resident permit
applications, the NIA has been criticized by local NGOs as an
agency bent on enforcement of immigration laws rather than one
dedicated to helping immigrants. For example, the Administration
currently requires PRC nationals wishing to visit relatives in
Taiwan for family reunions, or to reside or settle in Taiwan to go
through a fingerprinting process before arriving in Taiwan.
Visitors from Macau and Hong Kong, however, are not subject to
fingerprinting. The Administration also intends to add high-tech
iris and facial scanning systems in the near future. Contact:
Steven J. Hanley Winkler Partners, Taiwan Group email :
[email protected]
Thailand
Effective Written Warnings:
Their Role in Reducing the Likelihood
of Severance Pay Obligation Most employers, at one time or
another, are faced with problem employees who often act in
violation of company policies and work rules. Most of these
employers are also aware of the importance of documenting such
behavior and warning the employee. The means of warning an employee
vary depending on the wrongdoing and individual company policies,
with some employers opting for verbal warnings or regular written
warnings for relatively minor violations of company work rules,
such as tardiness and unexcused absences. While these policies may
be prudent internal measures of documenting employee wrongdoing,
they may not be enough to be taken seriously by the problem
employee and, most importantly, they may not legally support later
termination of the employee without severance pay. Here we address
requirements for effective written warnings under Thai law. Thai
law recognizes that, except for the most serious of actions, an
employer may not terminate an employee for violations of company
work rules, policies, or its legal and fair orders without first
providing a written warning to the employee. Otherwise, the
employer has to provide severance pay and also risk charges of
unfair termination. In fact, Section 119(4) of the Labor Protection
Act (“LPA”) provides that if an effective written warning has been
issued to an employee for the above-mentioned violations and he or
she refuses to correct his behavior, then the employer may
terminate the employee without providing statutory severance
pay.
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However, this provision does not apply to terminations due to
unsatisfactory job performance. So, where an employee has been
warned in writing about his or her job performance and he or she
does not improve, the employer can terminate employment but must
pay the affected employee statutory severance pay.
What constitutes an adequate written warning under Thai law?
Interestingly, the LPA does not specifically address this matter.
Rather, the definition and specific requirements are extracted from
Supreme Court precedent and are followed by the Thai labor courts.
With these requirements in mind, the following should be considered
by an employer when drafting warning letters to their
employees:
• A written warning should provide the facts relating to the
employee’s wrongdoing or misconduct.
• Such wrongdoing should be described clearly.
• The written warning should refer to the specific provision in
the employer’s work rules or codes of conduct so that the employee
is adequately informed of what provision applies to his case.
• The written warning must contain a sentence warning the
employee not to repeat the same wrongdoing and that if he ignores
such warning and repeats the wrongful conduct, it may result in
termination.
• The warning notice must be issued by the actual employer or
its authorized representative.
It is important to note that there is no requirement that the
warning notice actually contain a caption or heading stating that
it is a “warning notice.” It is the content of the notice that is
determinative, and the warning notice will be considered valid as
long as it contains the information defined above.
Supreme Court precedent offers further explanation of the strict
burden of written notification placed upon the employer. For
example, the Supreme Court has ruled that even in cases where a
terminated employee has offered a written confession of wrongdoing
with promises not to repeat the wrongdoing, and has acknowledged
having received several verbal warnings from his employer prior to
termination, there must be an actual written warning from the
employer before terminating the employee. So, while the facts point
to actual notice being served on an employee, the courts have been
quite strict in interpreting the written warning requirement. Thai
law also prescribes a strict time requirement in the use of written
warnings to justify later termination of employees. A written
warning is effective for only one year from the date of the
wrongdoing. So, if the employee receives a written warning for late
attendance on January 1, 2007, he may be dismissed without
severance pay for his second late attendance, as long as it takes
place before January 1, 2008. Contact: Chusert Supasitthumrong;
Tiziana Sucharitkul Tillee and Gibbins, Bangkok Group email :
[email protected]
Vietnam Restrictions on the Employment of Vietnamese
Citizens
Though all employers may be equal to one another under the labor
code of Vietnam but there are certain restrictions applicable only
to a foreign invested enterprise, branch office or
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representative office of a foreign company or organisation in
Vietnam. In general, employment of minors ( from 15 years old to
under 18 years old) and even children (under 15 years old) in
certain works are allowed under the laws of Vietnam. However, a
foreign invested enterprise, branch office or representative office
of a foreign company or organisation in Vietnam can only sign an
employment contract with a Vietnamese citizen who is at least 18
years old and permanently residing in Vietnam. The person should
also have a clear curriculum vitae and the full capacity for civil
acts (not incapacitated through mental or other illnesses or under
affection of drugs or stimulants), and not be one of the
following:
1. Civil servants, government officers,
officers, non-commissioned officers and soldiers of the
Vietnamese People’s Army and Vietnamese People’s Public Security
who are on active service;
2. Civil officers, government officers,
military officers, commissioners and soldiers of the Vietnamese
People’s Army and Vietnamese People’s Public Security, who have
been in connection with State secrets during office or service
tenures and have been retired for less than five years;
3. Spouse of a person in connection
with State secrets; 4. A person who has had disciplinary
actions imposed on them for disclosure of State secrets or
National Security information; and
5. A person who is under criminal
prosecution or who had been a convicted criminal but has not
been granted criminal remission.
An employment contract with any of the above-mentioned persons
by a foreign invested enterprise, branch office or representative
office of a foreign
company or organisation in Vietnam is unlawful. In order to
ensure that the new hire for any job offered by a foreign employer
does not fall under the restricted criteria, the incumbent must
submit along with the job application, among others, the following
documents:
• Detailed curriculum vitae with information on current or last
employment as well as information on employment of spouse certified
by the People’s Committee of the ward where the incumbent is then
residing;
• Certification from current or last employer on whether the
incumbent has been in connection with any State secrets or National
Security information, if the incumbent falls under criterion 1 or
2;
• Certification from current employer of spouse on whether the
spouse is in connection with State secrets or National Security
information;
• Criminal History Report of the incumbent issued by provincial
Department of Justice.
The last three documents are important to ensure the validity of
the employment contract but they are surprisingly ignored by many
employers in Vietnam. Of note, the Criminal History Report is valid
for 6 months only. Therefore, it is recommended that a foreign
employer may need to put into its works rules/policies requiring
the staffs to obtain and submit Criminal History Report
periodically.
Contact: Nguyen Tuan Minh Tilleke and Gibbins, Hanoi Group email
: [email protected]
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Transatlantic Law International, a global legal and business
solution provider
with affiliates in over 50 countries.
For questions about this Bulletin or Transatlantic Law, kindly
contact
Transatlantic Law at : [email protected] or the Asia
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