The Supreme Court has overturned a lower court verdict and ordered a retrial in a labour dispute between a textile company and workers who were allegedly not properly compensated.
On 23 May 2017, at the Labour Court Region 5 in Chiang Mai, the judges read the Supreme Court verdict on the case between Georgie & Lou Co. Ltd., a textile company producing clothes under the brands Neon Buddha and Pure HANDKNIT, and 24 of its former employees.
The employees accused the company of withholding a provident fund established in 2010. According to the fund’s conditions, the company has to pay workers who decide to quit or are fired.
The Labour Court Region 5 earlier ruled that the company must compensate the workers with interest after the company terminated their employment in 2014.
The company, however, appealed to the Supreme Court, arguing that they only had to pay the workers if they informed the company in advance of their resignation.
The Supreme Court overturned the earlier ruling, reasoning the company stopped contributing to the fund in late June 2013. Therefore, the fund and its conditions were also terminated then.
The earlier ruling that the company must compensate 24 of its former workers with the fund contradicted Article 386 of the Civil and Commercial Code on rescission of contracts, the Supreme Court concluded.
According to the Textile and Garment Industry Relations Labour Union, Georgie & Lou in June 2015 announced that it would suspend operations in accordance with Article 75 of the 1998 Labour Protection Act. However, the company did not compensate the workers with at least 75 per cent of wages during the period of suspension as the labour law states.
In August 2013, the company also reportedly violated conditions of employment by attempting to change workers’ employment contracts. In response, the workers formed a union in October 2013.
The company, however, did not respect the right of the workers to freedom of association and dismissed the union leaders on October 16, 2013, the textile labour union alleged.
