Countries around the world have implemented various relief measures to ease the impact of the covid-19 pandemic to their economies. This article provides a snapshot of the measures introduced in Singapore, Thailand and Indonesia. Companies should be aware of, and evaluate, whether the available relief may apply or be useful to them.
Singapore: The Re-Align Framework
Singapore’s parliament passed the Covid-19 (Temporary Measures) (Amendment No. 3) Bill on 3 November 2020, which introduced the Re-Align Framework, among other relief measures.
This framework provides a limited time period of opportunity to renegotiate or terminate certain contracts for businesses that have been significantly affected by the pandemic.
A business will be eligible under the framework if its annual revenue does not exceed US$30 million at a global group level, and has experienced at least a 70% fall in monthly average gross income from July to December 2020, as compared to July to December the previous year.
Furthermore, the framework applies to contracts that:
- Were entered into before 25 March 2020;
- Are governed by Singapore law;
- Have at least one party with a place of business in Singapore; and
Fall within the following categories, which are likely to have substantial obligations that may need renegotiation or restructuring: Lease or licence for non-residential immovable property; hire-purchase and conditional sales agreements for commercial equipment or vehicles; rental agreements for commercial equipment or vehicles; and sale and purchase of goods and services.
Thailand: Employment Law
Reduction of employment benefits. An employer cannot reduce employment benefits during the pandemic unless the employee agrees to do so in writing. Under the Labour Relation Act (1975), employment benefits are considered as working conditions that the employer shall not amend or enter into another agreement, unless such amendment is more favourable to the employee.
Nevertheless, section 75 of the Labour Protection Act (1998) allows an employer (at its discretion) to temporarily suspend its business, in part or whole, during the outbreak and/or government’s lockdown policy. The employer must inform the labour inspector and the employee in writing at least three working days in advance, and pay the employee at least 75% of their usual wages for the entire suspension period.
Work from home (WFH) policy. Employers can implement a WFH policy in order to protect employees’ health and safety. When a the policy is announced, the following details should be specified: Period of implementation; employees’ eligibility; details of employer’s support (e.g. software, hardware or other welfare); employees’ rules and responsibilities; data protection measures; the channel for employees to report illness or difficulties; and the possible disciplinary action for any breach of the policy.
Termination of employment. If an employer inevitably terminates an employee to stay afloat, it must ensure that such a decision is fair and justified. The employer should also ensure that the payment of wages, payment in lieu of advance notice, and/or severance pay are duly settled to avoid any legal challenges.
Indonesia: Omnibus Law
Indonesia introduced Law No. 11 of 2020 on Jobs Creation (the Omnibus Law) in November 2020, which seeks to revitalise economic growth and increase employment by protecting businesses and stimulating investment. The notable changes are:
Amendment to Law No. 25 of 2007 regarding capital investment. The Omnibus Law reduces the businesses prohibited or closed for investment to the following six sectors: Class I narcotics; gambling and/or casino activities; fishing species listed in Appendix I of the Convention on International Trade in Endangered Species of Wild Fauna and Flora; utilisation or collection of coral and reef from nature; chemical weapons manufacturing; and industrial chemical and ozone-depleting substances industry;
- The inclusion of the tourism industry to receive investment facilities that may come in the form of income tax deduction;
- The protection and empowerment of micro, small and medium enterprises by providing partnership programmes, boosting innovation and market expansion, human resource training, financing access, etc; and
- Simplified business licensing processes by the central and regional governments.
Murali Pany is the managing partner of JTJB in Singapore, Bunnasomboon Chaiparinya is a partner at JTJB International Lawyers in Thailand, and Iqbal Hadromi is a senior partner at JTJB network firm Hadromi & Partners in Indonesia
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