As COVID-19 continues to spread and cripple thousands of businesses in Thailand, both employers and employees alike are facing unprecedented challenges. To help them during this difficult time, the Thai Ministry of Labour has announced a number of compensation benefits schemes for employers and employees registered with the Social Security Fund (“SSF”) who are affected by the COVID-19 pandemic.
The key points of these benefits schemes as they apply to three different scenarios are summarized below.
Scenario 1 | Employees Under Quarantine
If an employee is required to undergo a period of quarantine in order to prevent the spread of COVID-19, irrespective of whether such quarantine is legally mandated or required by the employer, and during such period the employee is not paid, then such employee will receive compensation benefits from the SSF for up to 90 days in an amount equal to 62% of his or her daily salary (the calculation of daily salary is as detailed below), subject to an eligible monthly salary cap of THB 15,000. For illustration purposes, two calculation examples are set out below.
- Employees whose salaries are equal to or more than THB 15,000 per month
The calculation of compensation benefits for employees whose monthly salary is equal to or more than THB 15,000 is straightforward. Such employees will be entitled to a compensation of THB 9,300, i.e. 62% of THB 15,000 (the maximum eligible monthly salary for the compensation scheme).
- Employees whose salaries are less than THB 15,000 per month
The calculation of compensation benefits for employees whose monthly salary is less than THB 15,000 is slightly more complicated. Pursuant to the daily salary calculation as prescribed in the Social Security Act (1990), if an employee has a salary less than THB 15,000 per month, the employee will receive 62% of his or her “daily salary” (the daily salary being equal to (i) the sum of the highest three months salaries from his or her previous 15 months salaries, (ii) divided by 90 days).
By way of illustration, if the employee’s highest three months salaries from his or her previous 15 months salaries are THB 6,400, THB 6,500 and THB 6,600, respectively, then the “daily salary” of that employee will THB 216.67, which is calculated by dividing the total aggregate of the monthly salaries for those three months, i.e. THB 19,500, by 90 days. Accordingly, the employee in this example will receive 62% of THB 216.67 (i.e. THB 134.34) for each day that he or she was unpaid, up to a maximum of 90 days.
- Duration and Availability of Benefits
Although these compensation benefits were recently announced, they are available up to a maximum period of 90 days from any day beginning 1 March 2020 until 31 August 2020, or as extended and notified by the Minister of Labour.
In order to be eligible to receive compensation benefits under Scenario 1, an employee must furnish to the SSF a certificate from his or her employer which confirms the existence of an event of force majeure.
Scenario 2 | Business Interruption or Closure
If an employee is unable to work due to a COVID-19 related temporary business suspension, irrespective of whether such suspension is required by a government order or determined by the business operator itself, and the employee is unpaid during this period – such employee will receive compensation benefits from the SSF in an amount equal to 62% of his or her daily salary (the calculation of daily salary is as illustrated in Scenario 1) during such business suspension for up to 90 days (capped at a maximum eligible monthly salary of THB 15,000).
The availability and the procedure for receiving these compensation benefits, as well as the principles of calculation, are the same as those detailed in Scenario 1 above.
Scenario 3 | Termination/Cessation of Employment
If an employee’s employment is terminated by the employer due to the COVID-19 pandemic, either as a result of business interruption, business closure, or otherwise, and during such period the employee is not paid, the employee will receive compensation benefits from the SSF in an amount equal to 70% of his or her daily salary (the calculation of daily salary is as illustrated in Scenario 1), for a period of up to 200 days. The employee shall also be entitled to receive from the employer (i) payment in lieu of advance notice (if any), (ii) severance payment at the rate specified under Thai labour law, (iii) payment in lieu of unused annual leave (if any), and (iv) other outstanding sums due and payable, such as amounts due for periods of overtime.
If an employee resigns or his or her employment contract expires without being renewed due to the COVID-19 pandemic, the employee will receive compensation benefits from SSF in an amount equal to 45% of his or her daily salary (the calculation of daily salary is as illustrated in Scenario 1) for up to 90 days.
Although these compensation benefits were recently announced, they are available from 1 March 2020 to 28 February 2025.
For further information, please contact our team at Kudun and Partners.