Temporary Suspension from Work during Covid-19 Pandemic

During the COVID-19 outbreak in Thailand, many businesses are in the situation where they have no choice but to temporarily shut down due to a number of different reasons, ranging from Government orders, COVID-19 preventive measures and economic problems.  

With particular regard to businesses required to be shut down by order of the Government or provincial governor, it has become clear from the guideline and interpretation adopted by the Department of Labour Protection and Welfare, as issued during the first wave of Thailand’s COVID-19 outbreak at the beginning of 2020; that an employer does not need to pay an employee wages during the shutdown period because of the said reason according to the principle of ‘No Work No Pay’ (i.e. the employee is unable to perform their job to the employer - whereby it is not also the employer’s fault) .

However, what if a business is not ordered to shut down by the Government or local governor but nevertheless feels the need to temporarily suspend its operation due to other difficulties? Amid this new surge of Covid-19 transmission, the so called third wave, the most important question is whether or not an employer can rely on any legal grounds to shut down its business temporarily and not pay full wages to its employees during the period of shut down. .

In terms of labour law, the employer may shut down pursuant to Section 75 of the Labour Protection Act BE 2541 (1998) (the “LPA”), provided that the following criteria have been fulfilled:

1. If an employer finds it is necessary due to important reasons, which are not events of force majeure but affect the employer’s business operations to the extent that he/she can no longer operate his/her business normally;
2. The employer suspends his/her business either wholly or partially for a temporary period; and
3. The employer has notified the Labour Officer and the employees not less than 3 business days prior to such business closure. At present, online notification is also available

If each of the criterion in a.-c. above are met, an employer is allowed to pay wages to employees ‒ at a rate of not less than 75% of the employee’s usual rate of wages for a usual working day which the employee would have received prior to the employer suspending operations ‒ throughout the period under which the employer must stand-down the said employee during the temporary closure of its business; by the same method of payment and on the same pay day as prior to the said temporary shutdown.

Based on the Supreme Court’s previous decisions, the Supreme Court generally applies this legal provision strictly. This means that in order to apply Section 75 of the LPA, the employer must have a genuine necessity due to an important reason (which are not events of force majeure); it must not be merely a minor or general condition which would not have a significant impact on the employer’s business (Supreme Court’s decision no. 6960/2548). The Supreme Court generally considers the employer to have such necessity when the employer is or is  close to facing significant financial loss.

It is however important to be aware that, during the COVID-19 outbreak, aside from an economic crisis, there may be other kinds of necessity causing the employer to have to temporarily shut down its business. To ease the employer’s concerns on whether or not Section 75 of the LPA can apply to the circumstances, according to the ruling number Ror Ngor 1505/135, the Department of Labour Protection and Welfare views that if the employer needs to shut down its business temporarily in order to take precautionary measures because one of its employees is infected by COVID-19, or the working premises are closed for cleaning or 14 day’s quarantine upon finding a person diagnosed with COVID-19; the employer is allowed to consider applying for temporary business closure under Section 75 of the LPA. Alternatively, or in other cases where the principle of Section 75 of the LPA cannot apply, if the employer needs the employee to stay at home or go into quarantine, the employer may agree or allow the employee to take sick leave, business leave or annual holiday with pay in accordance with its work rules and regulations; or take leave without pay, as the case may be.

This is intended merely to provide a regulatory overview and not to be comprehensive; it is NOT a provision of legal advice. Should you have any questions on this or on other areas of law, please contact the following:

Chanakarn Boonyasith
Partner

Pitchabsorn Whangruammit
Attorney-at-Law