We find ourselves in uncharted waters with many companies fighting to survive the next 6 to 12 months because of COVID-19. Governments worldwide are struggling to make the right decision for their economies. It is no wonder that employers are struggling too.
The threat from COVID-19, together with the uncertainty in the market is the cause for the great concern for both employers and employees alike. As an employee, the current situation may feel overwhelming, particularly if you are being asked to make decisions that could significantly impact your immediate future. As an employee, what should you do if you are asked to accept unpaid leave and/or a salary reduction?
Firstly, don’t panic…!
You are not alone during these difficult times. Many of us as both employees and business owners are having to deal with circumstances that are beyond our control. At the time of crisis, it is important for you to be as informed as possible to empower your decision making process. Make use of the information and resources available to you. Speaking to friends and family about what happening is within the industry, speaking to your peers and colleagues to understand their thoughts on the current situation, and sitting down with your HR team and trying to get as many answers as they are able to provide. Above all, know your rights and keep yourself informed.
The following is a legal overview provided by Ms. Pinyapa Somphong, Attorney at Law at Opsker and Director of the British chamber of Commerce in Thailand ([email protected]):
The recent outbreak and continuing threat of the Coronavirus / COVID-9 raises numerous questions and concerns for people - especially in the employment space. It is essential for both employers and employees to understand their fundamental labour rights and obligations and legal implications of COVID-19 on employment in Thailand.
The following topics are some of the most common issues that are arising, which employees should be aware of to be able to negotiate with employers when these issues arise:
Under Section 32 and Section 57 of the Labour Protection Act (“LPA”), the employee is entitled to take sick leave with pay for one certain period of his/her actual sickness with a limited time for paid wages which is up to 30 days in total per annum. However, the employer may require the employee to submit his/her medical certificate on a case-by-case basis.
Based on the precedent of Thai Supreme Court, the employer is not entitled to change any nature of employment of the employee without the employee’s consent. Such nature of employment refers to the different factors attached to a certain employment position such as scope of work and “wages”. Accordingly, the employer has no right to reduce employee’s wage without his/her consent.
Hence, should you be asked to reduce your wage by your employer due to the on-going COVID-19 crisis, it is indeed at your sole discretion whether you wish to cooperate and accept it. However, such reduction amount shall not be lower than a minimum wage as prescribed by the Wages Board under the LPA.
It is important to note that, should the employer decide to close the company due to extensive difficulties caused by COVID-19, a calculation of severance pay will be calculated based on your last (reduced) salary under Section 118 of the LPA .
In general, should your employer wish to temporarily cease business operations, the employer is obligated to pay the employees at least 75% of their regular working-day wages during the period of cessation, except when such cessation period occurs from “force majeure” under Section 75 of the LPA.
Under Thai law, force majeure is oftentimes interpreted as an event that occurs which is outside the reasonable control of a relevant party that directly prevents any possibility of conducting business operations as is the case during (i) natural disasters; or (ii) political upheaval where both employer and employees are unable to conduct their duties.
However, the current legal interpretation remains unclear as to whether the COVID-19 crisis can be considered as force majeure which prevents employers from paying wages.
Accordingly, the employer is still subject to pay wages during a period of cessation due to COVID-19, unless there are further announcements from the Thai government to temporarily cease company / factory business operations.
Remember, your employer is not making these decisions because they want too. These decisions are being made in the hopes of securing the future of the company. So, this is not only for you, but for the rest of your coworkers.
Deciding whether to accept a salary reduction or unpaid leave is the individual issue. It would be impossible to cover all the different variables. However, there are a couple of generalisations we can make.
Firstly, do you love your job? Do you have a great relationship with your boss/manager/co-workers? If you do, these things are hard to replace; think long and hard about what your happiness at work means to you. (If you’re all about the money, then you are already looking for work and don’t need this advice..!)
Secondly, it is important to keep in mind that the market is shifting rapidly. One of the biggest issues when dealing with the fallout from COVID-19 is that the situation is unprecedented. Nobody has been through anything like this before, and nobody really knows what going to happen next is.
Keep this in mind. When you are speaking with your employer, ensure you ask plenty of questions and have all of the information available to make an informed decision. (The level of honesty and transparency being offered by your employer should help inform your decision). However, be aware your employer may not have all the answers and those they provide today may not be the same tomorrow.
As an employee, do not assume that you have no choice. Ultimately, it is your decision on how to react to a request of salary reduction or unpaid leave. However, try to understand the pressure your employer is under and if they are treating you fairly, make sure to treat them fairly in return.
It is important to have a clear understanding of the current market. While there are plenty of companies still hiring, you may find the employment terms differing week by week. The employment market is likely to shift from being candidate to client driven. The potential uplift of available talent will lead to employers taking the driving seat in dictating terms.
As recruitment consultants, we maintain constant contact with a broad range of companies within a variety of different industries. You can use this information for personal benefit and contact us for more details on the overall state of the market. We will be able to answer questions, such as: Are companies still hiring?; What sectors remain buoyant?; What should you expect if you choose to seek alternative employment? Any professional recruitment consultant will be pleased to support in any way they can.
Once you have all the necessary information, you may decide your best option to accept the revised terms your employer is offering. By sticking with your current employer, you may find yourself in a much stronger position when all of this is over. You would have achieved a level of trust with your employer that will be difficult to replicate. You will also likely have to learn some valuable lessons and pick up invaluable knowledge of how companies survive in times of crisis.
Above all, don’t panic and try not to become overwhelmed by what happening is. We are all in this together. With the world around us changing rapidly, we will continue to face significant challenges for many months to come. You are not alone, and there are plenty of people out there who are able to support.
(HI Recruitment is a boutique search consultancy with over 25 years of local and international recruitment experience; we’re currently offering free consultations to any companies or individuals who need advice during this ongoing crisis, contact us for more information: [email protected]).