As we explored in our recent article, in Thailand, international (or expatriate) secondment arrangements can give rise to unexpected, and potentially costly, employment risks. If a Thai host organisation is found to have acted as an employer, it may be liable for severance pay, payment in lieu of notice, and compensation for unfair dismissal, even if it is not the contractual employer. 

Below, we set out some of the key dos and don’ts to help mitigate the risk of the Thai host organisation being regarded as an employer under Thai labour law. 

Dos  

• Document the arrangement properly: As a starting point, ensure that the secondment arrangement is properly documented and expressly states that the overseas entity remains the sole employer throughout the secondment period. The documentation should clearly delineate the respective roles and responsibilities of the overseas employer, the Thai host organisation, and the secondee. 

• Keep employment decision-making authority overseas: More importantly, ensure that key employment decisions, including performance reviews, remuneration adjustments, promotions, disciplinary actions, and termination, remain solely within the authority of the overseas employer. 

• Keep reporting lines overseas: Ensure that reporting lines clearly establish that the secondee remains accountable to, and is supervised solely by, the overseas employer rather than the Thai host organisation. 

• Keep pay and administration overseas: Ensure that the secondee’s salary, benefits, bonuses, and other employment-related costs are paid and administered by the overseas employer. Any payment arrangement should be carefully structured and documented so the Thai host organisation is not perceived as assuming the responsibilities of an employer. 

• Limit the host organisation’s role: Where the involvement of the Thai host organisation is necessary, limit its role to local support and administrative matters, such as work permit and visa arrangements, the provision of office facilities, and other logistical assistance. 

• Keep direction and control overseas: Finally, and most importantly from a practical perspective, ensure that both the contractual documentation and the actual working arrangements demonstrate that the secondee remains under the direction and control of the overseas employer and performs services primarily for its benefit. 

Don’ts 

• Most importantly, don’t allow the Thai host organisation to make independent decisions relating to the secondee’s employment or working conditions, including recruitment, performance evaluations, remuneration, promotions, disciplinary actions, or termination.  

• Likewise, don’t allow the Thai host organisation to exercise day-to-day managerial control or supervision over the secondee in a manner that suggests the existence of an employer-employee relationship. 

• Avoid arrangements under which the Thai host organisation appears to be the primary beneficiary of the secondee’s services. 

• Don’t allow the Thai host organisation to enter into, co-sign, or otherwise become a party to any employment agreement with the secondee. 

• Finally, don’t rely solely on disclaimer clauses in the secondment agreement. If the actual working arrangements suggest otherwise, Thai courts may still regard the Thai host organisation as an employer, a co-employer, or a person acting on behalf of the employer.