As we continue to face and operate in an environment of considerable uncertainty due to the COVID-19 pandemic, organizations around the world have been forced to manage the impact of the pandemic on their workplace and workforce. A number of questions inevitably arise on necessary response and obligations of employers under these circumstances, amidst stronger measures imposed by various governments, including Thailand, to contain the situation.
On 25 March 2020, the Prime Minister issued the first regulation order under the Emergency Decree announced on 24 March, which took effect on 26 March and is expected to remain in force until 30 April 2020. The order confirms the previous orders to close down public places, close the borders from outside visitors and prohibits mass gatherings and publication of fake news, among others. Violation carries penalties of a maximum of two years imprisonment and/or a maximum fine of Baht 40,000. These measures combined with the Cabinet's earlier resolution to postpone the Songkran public holiday as part of the efforts to encourage social distancing, raise a number of HR-related issues that employers need to revisit.
One of the obvious questions is whether during the period of government closure of certain businesses, employers are still required to pay wages. In this regard the guidelines issued by the Ministry of Labour (MOL) suggest that the principle of no work, no pay would apply, strictly speaking, as it was no fault of employers being unable to assign work and employees themselves cannot perform work for the employers under this imposed closure of businesses. Employers may want to consider what measures they could take to minimize the impact on affected employees during the imposed temporary closure.
Another question worth considering is whether employers can still assign work during the government closure. Again the MOL's guidelines suggest that as the imposed closure of business was done primarily to deter the public from frequenting such places of business, and not as a measure to prohibit employees to work, if employers find it necessary to assign work to the employees during such period, or order the employees to work from home, they are obligated to pay the employees full wages.
Under the circumstances, what measures do employers have the authority to impose and how far? In the event of employees wanting to go back to their hometown, despite the government's order to postpone the Songkran holiday to deter such annual exodus, can employers prohibit the employees from traveling outside their work provinces, for example? What disciplinary actions can employers take if the employees breach the employer's order? What if employees intentionally travel to Bangkok so that when they return to the company's factory outside Bangkok, they would have to be quarantined at home, what measures are available to employers?
As far as relief measures for affected businesses are concerned, it should be noted that on 24 March 2020, the Cabinet approved the draft Ministerial Regulation and Notifications regarding the compensations and the relief measures for the employers and the employees who are registered with the Social Security Fund as follows:
- The employee who is unpaid due to COVID-19 (e.g. the employer does not provide the work to the employee) and have made contributions to the Social Security Fund for at least six months will receive 50% of their wage, capped at Baht 7,500, for up to 180 days.
- The employee who is unpaid due to the temporary closure of the business ordered by the government and have made contributions to the Social Security Fund for at least six months will receive 50% of their wage, capped at Baht 7,500, for up to 60 days.
- In case of the resignation, an eligible Social Security Fund employee will receive compensation at a new rate of 45% of their wage, capped at Baht 6,750, for up to 90 days.
- In case of the termination, an eligible Social Security Fund employee will receive compensation at a new rate of 70% of their wage, capped at Baht 10,500, for up to 200 days.
- The monthly contribution rate of the employer to the Social Security Fund will be reduced to 4%, and the monthly contribution rate of the employee will be reduced to 1% for two months (from March 2020 wage to May 2020 wage).
- The deadline of the monthly contributions for March, April and May will be delayed for three months. This means the deadline of the monthly contributions for March will be delayed to 15 July 2020, for April will be delayed to 15 August 2020, and for May will be delayed to 15 September 2020.
However, please note that the Ministerial Regulation and Notifications are pending the legal formality and could be subject to further changes.
In addition, the Cabinet has also approved the relief measures which are, including but not limited to, as follows:
- The workers who are affected by COVID-19, but are not registered with the Social Security system, or those who are registered but have made contributions to the Social Security Fund less than six months, will receive Baht 5,000 per month for three months (April - June 2020).
- The workers who are affected by COVID-19 will be offered with soft loans, e.g. emergency loan of Baht 10,000 per person at 0.1% monthly interest (no collateral) and special loan of Baht 50,000 per person at 0.35% monthly interest (with collateral).
- The deadline for personal income tax filing will be delayed from 30 June 2020 to 31 August 2020.
- Health insurance premiums deduction will be increased to Baht 25,000 from Baht 15,000.
- The deadline for corporate income tax filing will be delayed to 31 August 2020 (Por. Ngor. Dor. 50) and 30 September 2020 (Por. Ngor. Dor. 51).
- The deadline for other taxes filling for affected business operators will be extended.
- The workers who are affected by COVID-19 will be provided with skill training.
- Tax exemption on risk payments will be offered to medical workers.
Similarly, the above measures are pending the legal formality and could be subject to further changes. As the situation continues to evolve rapidly, we will keep you informed of any further changes.