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Corporate and Mergers & Acquisitions
The COVID-19 outbreak is declared by the World health Organization (so-called “WHO”) to be “a public health emergency of international concern” and it is causing severe disruption across industries and geographies, leading global employers to adjust their business continuity plans. In order to support businesses in their decision- makings and policy implementations, we have collected our thinking on the most immediate questions raised to us as follows:
Reduction of Employment Benefits
Employment benefits as agreed by and between an employer and an employee are considered as working conditions under Labour Relation Act. B.E. 2518 (1975), which the employer shall NOT amend or enter into another agreement with the employee unless such amendment is more favorable to the employee. Hence, the employer shall not be able to reduce the employment benefits, i.e. wages, amid the pandemic situation unless the employer is obviously agreeable so in writing.
Nevertheless, subject to Section 75 of Labour Protection Act B.E. 2541 (1998), the employer (under its discretion) can temporarily suspend its business, in part or whole, during the outbreak and/or government’s lockdown policy – the labour inspector and the employee must be informed in writing at least 3 days in advance – the employer shall pay the employee at least 75 percent of his or her usual wages received before the suspension for the entire period which the employer does not require the employee to work.
Work From Home Policy
Work From Home Policy (“WFH”) can be implemented by the employer in order to protect and ensure the employee’s health and safety. The WFH shall be announced and consist with the period of implementation, eligible/enforceable employee, details of employer’s support (e.g. software, hardware, or other welfare), employee’s rule and responsibility, data protection measure, report of illness or difficulty channel, and disciplinary action. Nonetheless, since working place is also considered as the working condition so it would be wise that the employer obtains the employee’s consent so as to avoid any potential conflict with the employee who may not have a proper working station or adequate facility at his/her premises.
Termination of Employment
If the employer inevitably terminates the employee to stay afloat, it shall ensure that such decision is fair, justified and all following payments as required by laws are duly settled so to avoid any legal challenges:
- Wages: The employer must pay wages, overtime pay, holiday pay and holiday overtime pay within 3 days from the date of the employee’s termination.
- Payment in lieu of advance notice: Unless the employment agreement stated otherwise, the employer can terminate the employee by giving a notice at or before anytime of payment to take effect at the following time of payment. Alternatively, the employer can, on giving such notice, immediately dispense with the services of the employees by paying a payment in-lieu of such advance notice.
- Severance Pay: The terminated employees shall be entitled for severance pay upon the uninterrupted period of works:
|Period of Work||Severance Pay|
|120 days but less than 1 year||30 days|
|1 year but less than 3 year||90 days|
|3 years but less than 6 years||180 days|
|6 years but less than 10 years||240 days|
|10 years but less than 20 years||300 days|
|20 years or more||400 days|
In addition, any employee registered with social security system who has lost the job and/or been suspended due to the Covid-19 situation can contact social security officer for financial help.