ECOT Proposes Government-Funded Severance Guarantee Scheme
Ministry of Labour Acknowledges Concerns and Agrees to Jointly Explore Solutions

On 16 June 2025, the Employers’ Confederation of Thailand (ECOT), led by Mr. Ekkasit Kunanantakul, President of ECOT, together with the presidents of 12 other employer organizations, met with Mr. Pipat Ratchakitprakarn, Minister of Labour, to discuss the draft Labour Protection Act (Amendment). The discussion focused on the proposed establishment of a Severance Guarantee Fund, aimed at providing compensation to employees affected by termination, and the associated proposal to collect contributions from employers to finance this fund.

Mr. Ekkasit expressed that the private sector supports the principle of establishing a guarantee mechanism to ensure severance payments to employees in the event of termination. However, ECOT strongly opposes the current approach which places the financial burden solely on employers through mandatory contributions to the fund. Such a measure would further increase the cost of doing business and strain employers’ operational capacity.

All 13 employer confederations unanimously proposed that the government allocate budgetary support directly to the fund. Furthermore, they called for legal amendments that promote fairness in the labor system — protecting the rights of employees while recognizing and supporting employers who comply with labor regulations.

In response, Minister Pipat Ratchakitprakarn acknowledged the concerns raised by ECOT and affirmed the Ministry's understanding of the challenges facing the business sector. He confirmed that the Ministry of Labour, following the policy directive of Prime Minister Paetongtarn Shinawatra, is exploring solutions that would avoid imposing excessive burdens on entrepreneurs.

Regarding the proposed 0.25% contribution rate to the Employee Welfare Fund, which is scheduled to take effect on 1 October 2025, the Minister stated that the Ministry is currently gathering feedback from all stakeholders. If practical readiness is lacking, the implementation date may be reconsidered and postponed upon submission to the Cabinet.

The Ministry is also expediting a feasibility study on adjusting the existing Workmen’s Compensation Fund, which is currently funded solely by employers, to potentially expand its scope to include severance payments. The outcome of this study will be presented to the Cabinet by the end of June 2025.

"The Ministry of Labour is committed to finalizing a balanced solution within this year, grounded in fairness, minimizing unnecessary burdens, and ensuring the security of employees alongside the business viability of employers,” the Minister stated.

Delegation of Employers’ Confederations Attending the Meeting:

• Employers’ Confederation of Thailand (ECOT)
• Confederation of Thai Employers in Trade and Industry
• National Employers’ Confederation
• Federation of Thai SME Industries
• Confederation of Employers in Consumer Goods Trade and Services
• Employers’ Confederation for Economic and Social Development
• Confederation of Thai Business Employers
• Confederation of Thai Employers in Agriculture, Business and Industry
• Thai Business and Industrial Employers Confederation
• Confederation of Thai SME Employers
• Confederation of Thai Service Employers
• Employers’ Confederation for Investment Promotion in Thailand