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March 30, 2020

Legal Implications of COVID-19 Disruption for Employers in Thailand

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Bangkok Post Human Resources Watch

As the COVID-19 situation escalates, governments worldwide are imposing travel restrictions, mandatory quarantine procedures, and curfews and lockdowns in an attempt to slow the transmission of the virus. The Thai government has announced many measures to deal with the COVID-19 outbreaks, including ordering the postponement of the Songkran holidays and the temporary shutdown of portions of the public and private sectors. 

The pace of this escalation can make it difficult for employers in Thailand to keep up with their legal obligations and rights. As Thailand and many other countries have either locked down their borders or instituted strict travel restrictions, an employer’s imposition of travel restrictions on its employees—a pressing issue only a week or so ago—is no longer a major concern. Instead, the more important issues are the recent announcements by the Thai authorities postponing the Songkran holidays, ordering the temporary shutdown of portions of the public and private sectors, and yet-to-be announced measures (at the time of writing) under a planned state of emergency. 

The postponement (until further notice) of the 2020 Songkran holiday, originally scheduled for April 13–15, was announced by a cabinet meeting resolution. Accordingly, April 13–15 will no longer be public holidays this year, and the government will announce substitution dates for the Songkran holidays at a later time. According to the cabinet announcement, employers that had already announced the public holidays in advance have the legal right to postpone their Songkran holidays. Should the employees be required to work on those dates, they are entitled to receive their normal hourly rate or salary. 

Another announcement came from the Bangkok governor, who ordered the closure of various establishments and locations. These include:

  • restaurants (except take-away services);
  • shopping malls (except supermarkets and pharmacies);
  • markets (except for fresh markets);
  • exhibition halls;
  • schools and educational institutions;
  • barbers, beauty salons, and tattoo shops;
  • game and internet shops;
  • golf courses and sports clubs;
  • beauty and cosmetic clinics, spas, massage parlors, and saunas;
  • theaters;
  • boxing stadiums and schools and horse racing clubs; and
  • other establishments similar to the above.

Some of these private-sector businesses that have been temporarily shuttered by the Bangkok governor’s announcement may consider this to be a situation that requires substantial changes to their working practices, including moving to a work-from-home model if possible. However, if the nature of the business cannot accommodate working from home, or if the employer does not have any work for the employees to do from home, the following options exist:

  1. Employees are entitled to use their annual leave so that they can continue to get paid during this time.
  2. If the employees do not have sufficient annual leave, then the employer can instruct them to take leave without pay. This is in accordance with the concept of “no work, no pay” as this situation is not the employer’s fault. Nonetheless, many employers that are able to do so still choose to pay employees’ full or partial salary during this shutdown period so that their employees will continue to have an income stream for their living expenses.
  3. If an employee is actually sick during this shutdown period (regardless of whether the illness is related to COVID-19), the employee can use sick leave with pay for up to 30 days, or more if the employer’s sick leave policy allows it.

There are also many businesses impacted by the COVID-19 outbreak that are not directly ordered to close down by the authorities. In such a case, if the employer has to wholly or partially suspend the business, the employer may, under section 75 of the Labour Protection Act, elect to pay 75% of the employee’s normal wages during the suspension, subject to meeting certain criteria. If the employer chooses this option, it must give employees—as well as the labor inspector—written notice at least three working days in advance of the suspension of the business, and prove that the situation has caused them to be incapable of maintaining normal business operations. However, the employer does not need the consent of the employees to exercise this option.   

If an employer wishes to reduce an employee’s salary by more than the 25% stipulated in section 75, they can only do so with the consent of the employee, as such a reduction would be considered a change in the conditions of employment. This is another option that is not related to section 75 but is based on a mutual agreement between employer and employee. In this instance, the employer is not required to provide proof of incapability to maintain normal business. In this current situation, some companies in the hospitality and travel industries have adopted this approach in dealing with this crisis.

Many companies have made adjustments to their business operations and work procedures to enable their employees to maintain their employment and continue to press on through this difficult time. This is an admirable position for these companies to take, as it demonstrates the companies’ appreciation for the employees and recognition of employees’ role in making the company profitable. However, it is not an option for all companies, and for those whose business are more severely impacted, the measures described above may provide some additional relief. 

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