Short Answer
No.
A company can use a labour supplier or outsourcing contractor, and the supplier may remain the workers’ contractual employer for many purposes. But that does not mean the customer company can treat the workers as legally irrelevant.
Thailand’s Labour Protection Act contains a specific labour-supply rule in section 11/1. Where its conditions are met, the business operator can be treated as an employer of supplied workers and must ensure that contract workers performing the same type of work as directly employed workers receive fair benefits and welfare without discrimination.
Other laws, particularly workplace-safety rules, can also impose responsibilities based on who works at the site rather than only whose payroll they appear on.
Why This Matters
Outsourcing is often described commercially as a transfer of responsibility:
“They are the contractor’s employees, not ours.”
That statement may be correct for the employment contract and still be incomplete for statutory liability.
The source matter arose during review of Thai work rules. Outsourced workers had been included in the document’s definition of “employee,” and the editing instruction was to remove them from that internal definition and manage them through the service agreement instead. The source correctly identifies a document-scope issue but does not prove that statutory labour-supply duties disappear. fileciteturn15file5L160-L165
Typical Scenario
A company hires a staffing contractor.
The contractor recruits the workers, pays wages and handles payroll. The workers perform day-to-day functions inside the customer’s operation.
Management asks:
“If our work rules say they are not our employees, are we protected from employment claims?”
Not necessarily.
Practical Analysis
01Separate the contractual employer from statutory responsibility.
The service agreement can state clearly that the supplier recruits, contracts with and pays its personnel.
That helps define the commercial relationship.
But legislation can impose obligations on the business operator despite that contract.
02Test section 11/1 of the Labour Protection Act.
Section 11/1 addresses a situation where a business operator arranges for another person to supply workers for work that forms part of the operator’s production process or business responsibility.
The provision applies whether the supplier supervises the workers or pays their wages.
Where it applies, the operator is treated as an employer for the section’s purposes and must ensure fair, non-discriminatory benefits and welfare for supplied workers doing work of the same nature as direct employees.
03Do not solve the issue by changing a definition.
Removing contractors from an employee handbook can be sensible because the company should not accidentally promise every internal employment benefit to personnel employed by another company.
But the wording of the handbook does not decide the statutory test.
The actual work arrangement still matters.
04Review control and integration in practice.
Who recruits? Who assigns daily work? Who approves leave? Who disciplines? Who sets schedules? Who can remove a worker from site? Who provides tools and supervision?
Those facts can affect several legal analyses beyond section 11/1, including whether the supposed outsourcing arrangement has moved closer to a direct employment relationship.
05Check equal-treatment exposure.
If supplied workers and direct employees perform the same work, compare welfare and benefits before assuming the contractor’s lower package is irrelevant.
The question is not automatically whether every benefit must be identical, but whether the statutory fair-treatment requirement has been addressed.
06Keep safety obligations separate.
Thai occupational-safety law uses broad concepts of employer and worker at a workplace. A customer business may therefore retain safety duties toward contractor personnel even where the staffing company remains their contractual employer.
07Draft the service agreement around responsibilities that can actually be performed.
Address wage payment, social security, benefits, supervision, safety, training, insurance, misconduct, replacement workers, claims handling and indemnities.
An indemnity may allocate cost between companies; it does not erase a worker’s statutory right.
What We Usually Look At
We review the staffing agreement, actual work model, worker contracts, payroll, supervision, comparable direct roles, benefits, social-security arrangements, safety procedures, work rules and the mechanism for complaints or claims.
Common Traps
Typical mistakes are assuming outsourcing eliminates employment exposure, putting contractors into the employee handbook without qualification, using an indemnity as though it overrides labour law and reviewing the contract without observing who actually controls the work.
Practical Next Step
Build a workforce map:
worker → contractual employer → work performed → supervisor → payroll → comparable direct role → benefits → safety responsibility → statutory exposure
That tells the business what has genuinely been outsourced—and what has not.
Legal Sources
- Labour Protection Act B.E. 2541 (1998), section 11/1 on labour-supply arrangements and fair, non-discriminatory benefits and welfare.
- Supreme Court Judgment No. 3680/2567, applying section 11/1 and treating the business operator as employer where supplied labour formed part of its production process.
- Occupational Safety, Health and Environment Act B.E. 2554 (2011).
General legal information only. Please seek advice on your specific facts. Laws and regulatory practice may change.