Employment Matters

Stay up to date on employment matters news, and government regulations in light of COVID-19 to prepare your business during this uncertain situation.

Keywords: Mazars, Thailand, COVID-19, Pandemic, Employment, Labour Law, Severance Pay

Updated: 26 March 2020 

We first address how the labour law currently applies in case an employee is unable to work as a result of the COVID-19 virus.

  1. COVID-19 is a dangerous communicable disease as defined in the Communicable Diseases Act, 2558 B.E. If an employee is infected and takes leave, the employee is entitled to sick leave for the number of days sick, but cannot receive pay for more than 30 days under the labour law.
  2. If an employee is at risk of having been infected and must be quarantined, labour law does not apply to the days in quarantine. An employer must order the employee to stay home and use annual leave first. If the amount of annual leave is not sufficient to cover the time in quarantine, the employee cannot receive wages for those additional days if the employee cannot work from home and the employee’s illness was not a result of performing work for the employer.

For businesses that are faced with having to close either temporarily or permanently, reduce operations, and / or cut salaries, there are number of options available.

  1. Bangkok and a number of other provinces have already ordered certain types of businesses to close temporarily in order to help reduce the spread of COVID-19. An employer that is required to suspend its business operations does not have to pay wages to its employees during this period.
  2. Under Section 30 of the Labour Protection Act, an employer must provide at least 6 days of annual leave for employees who have worked for at least 1 year. Therefore, if employees agree, businesses may ask them to take their annual leave during a temporary reduction in business activities.
  3. Under Section 75 of the Labour Protection Act, if the employer cannot operate its business normally for reasons other than force majeure, the employer may temporarily suspend the business in whole or in part. In this case, employees are entitled to at least 75% of the wages that they would have received on normal working days for the entire period that the employer does not require them to work. The employer must give the employee and the Labour Inspector written notice of the suspension of business at least 3 working days in advance, and must also report this temporary closure to the Social Security Fund, as no contributions will be made during that period.
  4. The employer and employee may both agree in writing to a reduction in wage. Under Section 20 of the Labour Relations Act, 2518 B.E. (1975), any change in the terms and conditions of employment requires the written consent of employees.
  5. There are many businesses across a wide range of industries that are severely affected by COVID-19 and which will have to lay off their employees. In this case, the laid-off employees shall be entitled to severance pay, payment in lieu of advance notice, and unused annual leave, but cannot claim additional compensation for unfair dismissal.

An employer that terminates the employment contract of an employee must provide severance pay as prescribed in Section 118 of the Labour Protection Act. The severance pay rates are as follows:

Length of employment

Severance pay

More than 120 days, but less than 1 year

30 days’ salary/wages

At least 1 year, but less than 3 years

90 days’ salary/wages

At least 3 years, but less than 6 years

180 days’ salary/wages

At least 6 years, but less than 10 years

240 days’ salary/wages

At least 10 years, but less than 20 years

300 days’ salary/wages

At least 20 years

400 days’ salary/wages

 

Employment Matters

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