Newest Judgement and Ruling : (Labour and Taxation issue) Labour issues: wage reduction, termination of employment due to economic recession etc. Tax issues: Stamp duty on Purchase order, deductible expense of damage incurred due to fraud of employee etc.
Implicit wage reduction
(Judgement of The Supreme Court Cases No. 3017/2561)
The defendant, as the employer, has continuously reduced the plaintiff’s wages and changed their position over several years. Throughout the employment period, the plaintiff did not object or file a complaint with the labour inspector. Therefore, the Labour Court Region 2 stated that the employer and the employee had agreed to the changes in position and the new salary arrangements as the defendant, in the role of the employer, had testified.
Termination due to economic recession: Why did the court decide it was unfair dismissal
(Judgement of The Court of Appeal for Specialized Cases No. 1308/2565)
The defendant terminated the employment of the plaintiff, stating that the defendant’s business has been affected by the economic recession and Coronavirus. This resulted in a decreased in volume of car lease credit releases and the workload of the plaintiff. Therefore, it was necessary to terminate the plaintiff’s employment. However, the defendant has no ground rules for selecting which employees will be terminated. Furthermore, before terminating the employment, there were no appropriate and fair measure to solve the problem such as reducing the days and hours of work.
Above all, the defendant was not in a state of loss, it just experiences decrease in profit. It still pays bonus annually to employees and has never announced salary reductions for employees. For all of those reasons, it shown that the defendant still maintains liquidity. Thus, termination of the plaintiff’s employment is unfair dismissal.
To identify whether the termination of employment is unfair, section 49 of Labour Court and Labour Procedure Act B.E. 2522 doesn’t specifically define which cases is unfair dismissal. Therefore, the Labour Court has discretion to consider the evidences and determine whether the employer’s reasons for termination are sufficient
Resolution of Labor Disputes by Arbitration
(Decision of the Court of Appeal for Specialized Cases No. 1230/2018)
Dispute term stipulated in the employment contract agreed by the employer and the employee shall be resolved by arbitration. It is specified that in the case of a labor dispute according to the Labor protection Act shall be resolved by arbitration. It can be enforced and it is considered that the employer and employee intend to resolve disputes between them by arbitration only for disputes arising from rights under the labor contract only.
In the case where an employee sues for damages from an unfair termination which is the exercise of rights according to the Act on Establishment of labor court is not filing of lawsuit regarding the right under a labor contract. Therefore, an employee can bring a case to the Labor Court without having to submit the case to an arbitral tribunal for a final decision
Determining compensation by considering work performance: wages or benefits
(Supreme Court Judgment No. 8093/2017)
Paying compensation to encourage employees to work efficiently, to have good behavior, to reduce errors in work, and to encourage employees to work hard as a priority. It is not considered to be payment in return for work so it’s not a wage. For example, paying for the cashier’s ride in order to encourage cashier employees to work efficiently is not in the nature of compensation for work according to the law under section 5 of Social Security Act. Therefore, it is not wages.
Tax Ruling
Is a purchase order subject to stamp duty?
(Supreme Court Judgement No. 5874/2543)
The plaintiff is operating a business of manufacturing compressor parts, which must be produced according to the model specified by Company Sor. When the plaintiff finishes the product and delivers them to Company Sor, the plaintiff specifies the delivery detail in the documents as delivery note, and also stating that the manufacturing is made according to the work order. The circumstances show that the plaintiff’s business considered a hire of work, not a sale.
According to the Revenue Code, an instrument means a document that must be subject to stamp duty as required by law. The document that Company Sor delivered to the plaintiff only contains the signature of Company’s Sor employee, without signature of the plaintiff or its employee. Therefore, this document considered as written evidence of the hire of work, not as a Contract Labor between the plaintiff and Company Sor. Consequently, it is not an instrument subject to stamp duty according to sections 103 and 104 of the Revenue Code.
Bad Debt relating to HR, Accounting Dept, Employee’s corruption
(Discussion of the Revenue Department No. Kor. 0802/5209 dated 28 April 2012)
In the case where an employee misappropriates the company’s property and was prosecuted in court until the end but the suppressed property was not returned. It is considered to be damage resulting from operating an uninsured business. It is not bad debt from business operations. The company can deduct it as an expense. It is not prohibited under section 65 Ter (12) of the Revenue Code. Therefore, if such a case occurs, the company must comply with section 65 Ter (12) in place of Ministerial Regulation No. 374 regarding the disposal of bad debts from debtors’ accounts
VAT – Refrigerated truck freight services.
(Ruling GorKor 0702/88 dated January 8, 2024)
Question
The Department of Land Transport has recently released 3 announcements regarding the certification of quality standards for truck transport services and the transportation of agricultural and food products by temperature-controlled trucks in 2019. These announcements cover the Q Mark standard for truck transport services, the Q Cold Chain Standard for the transportation of agricultural and food products, and the determination and attachment of certification marks for the transport of these products in temperature-controlled trucks. Each of these announcements outlines specific requirements for the characteristics and standards of trucks, as well as the process for transporting goods in temperature-controlled trucks.
Mr. A enters into a joint transportation contract with Company B to transport refrigerated food products. From all 3 announcements, Mr. A has legal duties that must be complied with, such as the size of the vehicle and the temperature for transportation. Installation of temperature recorder even though the employment contract does not contain any requirements to comply with the above, Mr. A still has a duty to comply with all 3 announcements.
Mr. A saw that the delivery of goods by temperature-controlled trucks the transporter must comply with the various announcements of the Department of Land Transport. It is considered the normal performance of the transporter’s duties according to the specified standards. Mr. A would like to discuss whether his transportation services are subject to VAT or not.
Decision
All 3 of the Department of Land Transport announcements that Mr. A refers to are regarding the voluntary certification of Q Mark and Q Cold Chain, which is a requirement for trucking service providers. However, these announcements do not specify that the service being provided is transportation-related.
In the case where Mr. A is hired to transport refrigerated food products for Company B to various branch stores using temperature-controlled trucks, he also has additional responsibilities as follows:
- returning empty plastic crates and taking damaged or returned products from the transportation round.
- In the event of any damage or loss of the products, Mr. A will be held liable.
- Furthermore, if Mr. A fails to deliver the signed document for receiving the products or the document for returning the products to Company B within the specified time frame, he will be subject to a fine of 100 baht per document.
Therefore, it is evident that Mr. A’s duties and responsibilities go beyond just transportation services. In addition to his transportation duties, this service can be considered a hire of works according to Section 587 of the Civil and Commercial Code. As such, it is subject to VAT under Section 77/1 (10) and Section 77/2 (1) of the Revenue Code.
Personal Income Tax – Submission of tax return forms for foreign individuals working in regional offices.
(Ruling GorKor No.07028/540 dated February 1, 2023)
Question
Mr. A is a foreigner who works in Regional Operating Headquarters (ROH) and has filed a PIT (P.N.D. 95) showing assessable income. Later, Mr. A has filed a PIT (P.N.D.91) again and request a refund of the excess tax paid by Mr. A. Can this be done?
Decision
In the case of Mr. A who work at ROH, 15% of his assessable income has been withheld for income tax. However, he has exercised his exemption rights and this assessable income was not initially included in the calculation of his income tax. Later, Mr. A filed Form P.N.D. 91, including such assessable income in the calculation of tax as per Section 48 (1) of the Revenue Code. This can be done in order to request a refund of the tax withheld or to request a credit for the tax withheld. It is important to note that Mr. A has the right to do so, as stated in Section 5 of Royal Decree regarding Reduction and Exemption from Revenue Taxes (No.405) 2002.