Ho Chi Minh City has been locked down for months in an effort to fight the challenging fourth wave of the Covid-19 pandemic. We explore the various options available to employers to cut labor costs, as well as government relief measures to support both workers and employers.

With the latest wave of COVID-19 continuing to have a serious impact on Thailand, many businesses have been looking for ways to survive. Some have temporarily reduced employees’ wages, while others have resorted to a complete or partial halt to operations. In these unprecedented circumstances, it is vital that business owners understand the legal criteria and steps for implementing a temporary cessation of operations in Thailand, as outlined in this article. Any business can apply for a temporary cessation of operations under section 75 of the Labor Protection Act (LPA) if there is a necessity and a significant cause, such as the business being unable to operate as usual, and if the necessity is not considered force majeure under Thai law. (If it is deemed force majeure, an employer may be able to withhold all wages—more on this below.) If these criteria are met, the employer can choose whether to seek temporary cessation of operations on a whole or partial basis, depending on the actual situation and necessity. The employer then has to inform a labor inspection officer and the employees at least three business days in advance of the intended cessation of operations. Once this is done, operations may be halted, but the employer must pay employees at least 75 percent of their wages, calculated based on the rate on their latest working day, and these payments must continue throughout the entire cessation period. “Necessity” and force majeure Though the LPA does not indicate what qualifies as a “necessity” allowing an employer to call for a temporary cessation, past rulings from the Supreme Court provide some guidance on this issue. For instance, reduced purchase orders from customers and financial difficulties faced by the employer can amount to a situation of “necessity.” Additionally, the situation has to be significant

Lawyers from Tilleke & Gibbins’ labor and employment team including Kien Trung Trinh, Sarah Galeski, and Nam Ngoc Trinh have written the Vietnam chapter of Practical Law’s Employment and Employee Benefits Global Guide. The 2021 edition of the handbook provides a high-level comparative overview of employment laws and regulations across 32 jurisdictions around the world. Tilleke & Gibbins also contributed the Myanmar chapter of the guide. The Vietnam chapter covers a wide range of typical employment matters, such as limitations on working hours, paid leave requirements, minimum wage, and health and safety obligations. In addition, the guide provides insight on a number of topics of special interest to foreign investors doing business in Vietnam, including the following: Mandatory contents of a labor contract; Visas and permits required for expatriate employees; Employers’ obligations for protecting employees’ privacy and personal data; Procedural requirements for the dismissal of an employee; Employer and parent company liability. The 2021 edition also includes a special section on Covid-19 related provisions of labor law. To read the Vietnam chapter, click on the link below.