Employees Have Filed Demands to Change Employment Conditions: How the Company Should Prepare to Negotiate

HR opens an email in the morning and finds a letter with several dozen employee signatures attached, asking for a higher shift allowance, a bonus floor and more benefits. Some companies call an all-hands meeting at once. Others wait for the owner to return from abroad. But the law counts from the day the letter is received, and it allows only 3 days to begin negotiating. This guide is for owners, HR directors and country managers of factories and larger employers, and covers what to prepare before and during the negotiation.

It does not repeat what we already cover. If the company itself wants to reduce wages or benefits, see a company that wants to cut wages, workdays or benefits. For a general health check before any demand arrives, see a labour-law health check for the company, and for the wider rules factories face, see the guide to factory and industrial-estate law. This guide has one focus: the steps, authority, documents, proposals and communications once a demand has arrived.

The short answer

When a demand arrives, do four things in order: check that it was made in the proper form; appoint representatives and confirm their authority in writing; begin negotiating within 3 days; and avoid anything that could be read as retaliation against those who filed. Only then prepare the figures and proposals for the second round.

The law. Section 5 of the Labour Relations Act B.E. 2518 defines "conditions of employment" as the terms of work or employment, such as working days and hours, wages, welfare and termination, and an "agreement on conditions of employment" as an agreement between employer and employees on those matters. Section 13 requires the demand in writing; where employees make it, it must carry the names and signatures of not less than 15 percent of the employees concerned, and each side's negotiating representatives number no more than 7. Section 16 requires negotiation to begin within 3 days. If the parties do not negotiate in time or cannot agree, Section 21 treats a labour dispute as having arisen, and the side that made the demand must notify the labour dispute conciliation officer within 24 hours. Section 22 gives the conciliation officer 5 days to conciliate. Section 31 protects the people involved from dismissal or transfer of duties while the process runs, and Section 121 forbids unfair labour practice against employees who demand, negotiate or complain as the law allows.

Our practical view. Companies that negotiate badly rarely do so for lack of money. They do so because nobody knows who can decide, there is no cost figure for each demand, and a production manager says something that is read as a threat. Our firm's role is to check the legal steps, documents, representatives' authority, proposals and draft agreements before and during negotiation, as part of labour-law compliance work and standing HR advice. We do not sit at the bargaining table for the company.

Running hypothetical. A packaging factory in Khon Kaen has 320 employees, 140 of them in production. Prasit, a shift leader, leads 30 production staff in filing a letter asking for a higher night-shift allowance, a minimum bonus and a travel allowance. The plant manager, Wimon, receives it on Monday and asks HR when the company must reply. The answer is by Thursday. We use this example throughout.

1. Was the demand made in the proper form?

Before disputing anything, check three things on day one.

• Is it in writing? Section 13 requires a written demand. A chat message or an oral statement is not a Section 13 demand.
• Is it about conditions of employment? Under Section 5, for example wages, shift allowances, bonuses, welfare and working time. A demand to remove a manager, for instance, is not something this procedure obliges you to negotiate.
• Are there enough signatures? Where employees file, the names and signatures of at least 15 percent of all the employees concerned.

In the example, the employees concerned by a night-shift allowance demand may be only the night-shift production staff, not all 320. HR must count correctly who is concerned. If that is 140, 15 percent is 21, so 30 signatures suffice. But if the list contains non-employees or duplicates, strike them and count again.

A defective document does not let the company ignore it. Reply in writing quickly, point out the defects, and offer a meeting time, so that the company is not seen as refusing to negotiate under Section 16. Do not use the signature list as a screening list for people to treat adversely, because that runs into Sections 31 and 121, discussed in item 6.

2. The 3-day deadline and the order of steps

Section 34 prohibits a lockout or strike in several situations, for example before a demand has been made, before the stage of no agreement under Section 22, or while an arbitrator is considering the dispute. In every case the side that will lock out or strike must give written notice to the conciliation officer and the other side at least 24 hours ahead. A company considering a lockout should take advice every time, because wages and Section 121 are affected.

In the example, Wimon received the letter on Monday. HR replied the same day naming the company's representatives and proposing Wednesday, so that negotiation began before the 3 days ran out.

3. Who can sign for the company, and how authority must be documented

A common problem is a negotiator who "agrees" something at the table that the company has not approved or that is beyond what the directors can approve. The table shows who should hold which authority. Adapt it to your company affidavit and articles.

There are two risks. First, the negotiator agrees to something the company cannot approve. If the company lets that person appear as authorised, the other side may rely on apparent agency under Section 821 of the Civil and Commercial Code, and the company may be taken to have ratified under Section 823 if it does not disown the act promptly. Second, the negotiator is so cautious that everything is "let me check first". Talks stall and the other side concludes the company is not serious.

The fix is to set the frame in writing before day one: what the representatives can accept on their own, what must come back for approval, and what must not be said. Sample resolution wording follows. Adapt it to the facts.

Resolution of the Board of Directors of ____ Co., Ltd., meeting no. ___, dated ____
Subject: Appointment of representatives to negotiate the demand on conditions of employment
The meeting resolved:
1. To appoint the company's negotiating representatives, not more than 7, as listed
   in the attachment, with ____, HR Director, as team lead and sole spokesperson.
2. To authorise the representatives to propose and accept proposals on ____
   only within the frame and ceiling in Attachment 1 (confidential).
3. Proposals beyond the frame, or concerning ____, must be put to the Board for
   approval first. The representatives have no authority to accept them at the meeting.
4. The agreement is to be signed by the authorised signatory director ____ after the
   Board approves the final draft.
5. This resolution takes effect from ____ until cancelled in writing.

If the other side asks for proof of authority and you use a power of attorney, make it specific: name the attorney, the scope and the period, and check stamp duty with your accountant.

4. Documents to prepare before the first meeting

Good documents let the representatives answer on the spot. The minimum set:

• Current work rules under Section 108 of the Labour Protection Act B.E. 2541, required where the employer has 10 or more employees, with evidence of how they were announced.
• The existing agreement on conditions of employment, if any, with proof of registration and its end date.
• A payroll cost model for each demand: cost per person per month and per year, number of people affected, the effect on overtime, social security contributions and anything calculated from wages, such as a bonus tied to salary.
• The company's financial position: profit and loss, cash flow, open purchase orders and contracts with price-adjustment terms.
• Peer benchmarks: wages and benefits at comparable factories in the industry and area, obtained lawfully.
• A list of the employees involved: signatories, representatives and people who may be protected under Section 31, with current status, warnings and disciplinary history, so you know in advance whom the company must not touch during this period.
• A negotiation log, using the template below at every session.

Minutes of negotiation on the demand on conditions of employment, session no. ___
Date ____  Time ____  Place ____
Company representatives: ____ (team lead ____)
Employee representatives: ____ (team lead ____)
Demand items discussed: item ___ on ____
Employees' proposal: ____
Company's proposal / response: ____
Points agreed: ____
Points open, and which side must respond: ____ by ____
Next session: ____
Signed for the company ________   Signed for the employees ________

5. Proposals: what the law requires and what is negotiable

Start by sorting every demand into two piles. The first is what the law already fixes and is not a bargaining chip, such as overtime pay, pay for work on holidays and leave rights under the Labour Protection Act B.E. 2541. If a demand asks for what the law already requires, say plainly that the company must already provide it, and check that it has done so. The second pile is what goes beyond the law, such as shift allowances, bonuses and assistance payments, which are negotiable.

A good proposal has four parts: a clear amount or right; a start and end period; conditions tied to the right, such as attendance or output; and phased adjustments. Do not offer something to be "looked at later", which only creates a new dispute over interpretation. In the example, the company offers the night-shift allowance increase in two steps over twelve months rather than in one block, and a minimum bonus only in years when results reach an agreed target.

One firm rule: do not promise anything that conflicts with the law, such as agreeing to pay below the minimum wage or to have employees waive overtime pay. Such terms do not protect the company and only create new complaints. Where the company's proposal reduces existing rights, see the approach in reducing wages or benefits.

6. Communication during the negotiation

• One spokesperson. The HR director, or whoever the company appoints, speaks to the employee representatives and issues messages to all staff. Nobody else answers for the company.
• Minutes signed by both sides. Every round needs a summary signed, or at least acknowledged, by both sides. Use the template in item 4.
• No retaliation. Do not dismiss, cut hours, change shifts or change the duties of those who filed, their representatives or participants because of the demand. Section 31 bars dismissal and transfer of duties of those involved while the demand is unresolved, except for four causes: dishonesty in duty or an intentional criminal act against the employer; intentionally causing the employer damage; breaching a lawful rule or order after a written warning (a serious case needs no warning); and absence for 3 consecutive working days without reasonable cause. The rule must not have been issued to obstruct the demand. Section 121 also bars dismissing or pressuring employees because they demand, negotiate or complain as the law allows.
• Do not bypass the representatives. Do not send proposals to individual employees or post in chat groups to persuade people to withdraw their names or to sign for a proposal separately from the representatives. That can be read as evading the negotiation. Communicate through the representatives, and if all staff must be told, state only the facts of the process and the proposals already given to the representatives.
• No threats. Remarks about closing the plant, moving a production line or not renewing contracts, said so that listeners take them as retaliation, can be used as evidence. Anything management genuinely needs to say on these topics should go through legal review first.
• Do not publish the filers' personal data. Collecting and using employee data must comply with the Personal Data Protection Act B.E. 2562, and posting the filers' names for others to see creates risk.

A sample briefing for production line managers (adapt to the company):

Subject: Line managers' conduct while the company negotiates the employees' demand
1. The company is negotiating with the employees' representatives as the law requires.
   Only one person speaks for the company: ____
2. Do not ask who signed. Do not tell staff to withdraw their names. Do not discuss
   effects on positions or contracts.
3. Do not change the shift, duties or hours of employees involved without first
   consulting ____
4. If staff ask about the demand, say: "The company is negotiating under the proper
   procedure; the representatives will report progress." Refer the matter to ____
5. If you see a disciplinary breach, record the facts and tell ____ before any
   warning or penalty.

For staff posts criticising the company during this period, see an employee criticising the company on social media.

7. After agreement: registration and effect

Section 18 requires the agreement in writing, signed by both sides. The employer must post it where employees work for at least 30 days, starting within 3 days, and register it with the Director-General of the Department of Labour Protection and Welfare or the delegate within 15 days. Assign someone in advance to count the days from the date of signing.

The agreement has two effects. First, Section 20 bars an employment contract that conflicts with the agreement unless the term is more favourable to the employee, so an individual contract that gives less than the agreement cannot be enforced. Second, Section 10 requires a workplace with 20 or more employees to have a written agreement on conditions of employment, and Section 11 treats the work rules as the agreement where there is none. Once a new agreement exists, check the work rules for consistency and amend or re-announce them through the Section 108 procedure of the Labour Protection Act B.E. 2541, so the two documents do not clash.

If the agreement touches the move of a workplace, see relocating a factory or office. If negotiation fails and a case follows, see an employer sued in the Labour Court. A company negotiating because it plans to cut staff should read restructuring and redundancy planning alongside.

8. Checklist on receiving a demand

Day one

• Record the date and time of receipt; keep the original with the signature list
• Check that it is in writing, concerns conditions of employment, and carries at least 15 percent of the employees concerned
• Send a written reply naming the representatives and fixing a first meeting within 3 days
• Tell executives and line managers not to retaliate against filers or representatives

Authority and team

• The board resolves to appoint not more than 7 representatives and sets the frame and ceiling
• Appoint a single spokesperson
• State in writing which matters must return for approval
• Check the company affidavit so the signatory director matches who will sign the agreement

Documents and figures

• Work rules and the existing agreement
• Cost of each demand, per month and per year
• Financial position, cash flow and benchmarks
• List of people who may be protected under Section 31 and each one's disciplinary history
• Negotiation minutes template

Proposals and communication

• Separate what the law requires from what is negotiable
• Prepare phased, conditional proposals that do not conflict with the law
• Brief line managers using the prepared message
• Do not send proposals around the representatives to individual employees

After agreement

• Sign in writing, post for 30 days and register within 15 days
• Review and amend the work rules to match
• Adjust payroll to the agreement

Further reading

• A company that wants to cut wages, workdays or benefits — when the company's own proposal reduces existing rights
• A labour-law health check for the company — check documents and practice before a demand arrives
• Guide to factory and industrial-estate law — the wider legal picture for factories
• Relocating a factory or office — when the demand arises from a move
• An employer sued in the Labour Court — if negotiation fails and a case follows
• Restructuring and redundancy planning — when a headcount reduction is planned at the same time
• An employee criticising the company on social media — handling online posts during negotiation

A demand is not a crisis if the company knows who has authority, what the figures are, and that its proposals do not conflict with the law. Negotiate on time, keep full minutes, and avoid retaliation against anyone involved.

We help check the legal steps, documents, representatives' authority, proposals and draft agreements before and during negotiation, as part of labour-law compliance work and standing HR advice. For an initial consultation, call +66 92 254 2045 or send us the details. See also labour-law compliance review.

This guide is published by Suwanvara Law Firm — a Khon Kaen law firm established in 1986. General information only, not legal advice on a specific matter.