Author: Ryan Crowley

In this third installment of our case studies on Supreme Court cases relating to unfair termination we shall continue our examination of various types of reasons used to justify employee termination including defamation, sale of business, and dismissal due to restructuring of the employer. These judgements shall help to provide useful and practical guidance on what does and does not constitute unfair termination under Thai law. Defamation Case Number 19565/2557 Facts: The Plaintiff slandered his supervisor when he spat and said that the supervisor was not an honest person like in the past and that he is a disrespectful person. Given this, the Defendant terminated the employment of the Plaintiff. The Plaintiff then subsequently sued the Defendant in the Labour Court claiming unfair termination. The Appeal Court ruled that even though the Plaintiff’s behavior was not a serious violation of […]

In this second installment of our case studies on Supreme Court cases relating to unfair termination we shall continue to examine various types of reasons used to justify employee termination including inadequate/ poor performance and company reorganization. These judgements shall help to provide practical guidance on what constitutes unfair termination under Thai law. Inadequate/ poor work performance Case Number 7096/2550 Facts: The Employee’s employment contract contained conditions which provided that if the employee: was unable to work according to the Company’s standards; neglected their work duties; came to work late; was evaluated at a low working level, or received several warning letters from employer, then the employer could terminate the employment contract. In this case the employee was unable to comply with the Company’s work standards and the employee’s work performance was evaluated as being at a low level on […]

Some employers in Thailand misunderstand the law relating to terminating staff and as such they believe that if they pay severance pay to a terminated employee according to section 118 of the Labor Protection Act (B.E. 2541), they can terminate an employee for any reason whatsoever. Such a misunderstanding of Thai law can result in an employer being subject to considerable legal liability given that a terminated employee may be able to submit a claim in the Thai Labour Court seeking compensation from their employer or reinstatement of their employment on the grounds of unfair termination. There are several issues which need to be examined when determining what constitutes an unfair termination, however in this article we will focus on judgments of the Supreme Court in order to provide guidance on the issue. To begin with we should focus on […]

Setting up a company limited in Thailand can be a relatively straightforward matter depending on the details of the new company to be formed. This article shall discuss various issues relating to company registration, including the minimum requirements to register and incorporate a company in Thailand as well as several key considerations which the key stakeholders should consider before forming the new company such as director signing authority, registered share capital and the possible need for licenses or permits.   Minimum Requirements to Form a Company Limited To form and register a new company limited at the Department of Business Development (DBD), the promoters of the company shall need to comply with the following minimum requirements: The new company will firstly need to reserve a name for the company at the DBD and such name shall need to be in […]

A shareholder agreement is basically a contract that outlines the rights, responsibilities, and obligations of the shareholders of a company. This type of agreement is used to govern the relationship between the shareholders and provide a framework for decision-making and dispute resolution. This article shall address the reasons why shareholders of a company may decide to enter into a shareholder agreement as well as the types of issues and topics which should be covered in this type of contract.   Reasons why to have a Shareholder Agreement Some of the key reasons as to why shareholders may decide to use this type of contract are as follows: Arguably, one of the main reasons is to protect certain shareholder rights. A shareholder agreement can protect the rights of minority shareholders by setting out provisions for voting rights, dividend distribution, and access […]

Before a company’s shareholders decide to amend their company’s articles of association (AoA), there are a number of issues which should be carefully considered. This article shall discuss a number of matters relating to amending a company’s AoA including key issues that a Company’s shareholders and directors should be mindful of when implementing such change.   Legal Compliance of Proposed Changes to AoA Firstly, it is necessary to ensure that the proposed amendments to the AoA comply with the Thai Civil and Commercial Code (CCC) as well as the company’s Memorandum of Association (MoA). If the proposed amendments are contrary to Thai law or the MoA then if they are later challenged they could be struck out by the Thai courts.[1] It would also be sensible to see if the CCC already provides for the proposed amendment as this would […]

Good corporate governance refers to the set of principles and practices that ensure transparency, accountability, fairness, and responsibility in the management of a company. The main objectives of good corporate governance are to increase the value of the company and protect the interests of key stakeholders, including the shareholders and society as a whole. This article shall discuss several ways in which a private company limited can achieve good corporate governance in Thailand, including practical steps which can be taken to accomplish this outcome. Board of Directors Firstly, to meet good corporate governance standards, a company’s board of directors should be composed of competent individuals who are able to provide strategic direction and oversight to the company. Ideally, directors should have diverse skills, knowledge, and experience to ensure that the company is well-run and managed. It would also be sensible […]