By Earl V Brown Jr

Introduction

The Thais have risen twice in recent memory against military dictatorships, in 1973 and 1992. The labour movement was at the centre of both uprisings, and has been integrally involved in the movement to democratise Thailand. However, the movement has failed to translate this prominence into union density and collective bargaining gains. It has scant influence on wage levels and wage patterns in the burgeoning economy.
In Thailand, the statutory minimum wage - now set at 165 baht (US$4.20) per day for Bangkok – is the effective rate for unskilled and entry level jobs.

The labour movement represents around three percent of the working class, a class that has grown markedly in the last twenty years. It comprises around 1,100 registered private sector unions, and 45 state enterprise unions and national centres. Collective bargaining agreements that exist are sparse documents. They fix wages, and typically provide for time off for union business, use of employer premises for union offices, meetings and notice boards, union dues check off, credit union payroll deductions, shift allowances, work-attendance bonuses, year-end bonuses, free uniforms, shoes, and safety equipment; but they afford few protections for workers.
Turbulent recent history plays a part in the historic weakness of the Thai labour movement. A 1991 coup ushered in a hostile military regime that was dissolved by demonstrations spear-headed - with other groups - by labour unions.

The legal structure for worker rights, industrial relations, and social protection emerging from this chaotic political and social history is fairly standard for South East and East Asia - some worker rights are constitutionally articulated, and a statutory frame for organising, collective bargaining, and social protections has been erected. This legal skeleton is inadequate to address employment relations in the diversifying and complex industrial and service economy; the huge informal and illegal sectors of the economy undermine the protections this meagre legal regime offers.

On its face, Thai labour and employment law requires improvements to comply with international labour law norms set in International Labour Organisation (ILO) conventions. Labour law lacks clear provisions to protect union and collective activity in the workplace, compel employers to bargain collectively, and require enforcement of collective bargaining agreements. The institutions designed to enforce labour and employment law do not command adequate remedial powers. Civil servants may not organise in trade unions. The State Enterprise Labour Relations Act bans affiliations between local, regional, and sectoral level private enterprise unions, and their state enterprise worker counterparts, except at national congress level.

Thai labour law suffers from grave problems in implementation. The courts are so ineffectual that they rarely alter the economic balance of power between worker and employer in the largely unregulated labour market.
With the onset of the 1997 Asian economic crisis, workers were laid off in droves. However, the most marked impact was on wages. The World Bank reports that wages fell 13 percent in the one year after the crisis began. Although there is little data on this topic, we can extrapolate from minimum wage compliance data that widespread non-compliance pertains in other areas of labour and employment law.

These deficits are reflections of the broader legal culture, as well as the weakness of labour organisations. Legal institutions are not traditionally used for dispute resolution in Thailand. For this reason, the law’s civil, remedial side is quite underdeveloped. Traditionally, the law has sought to enforce norms via criminal sanctions, or damage judg-ments.1 Court orders (injunctions) to prevent ongoing misconduct, such as the dismissal of unionists, are almost unknown. Even enforcement of money judgments is problematic. Courts rarely invoke contempt powers to bring offenders to book, or even to compel satisfaction of judgments, as assertions claim that courts have no enforcement powers. Often, a judgment creditor is simply referred to the police.

Rare indeed is the case where courts (and other institutions) force an employer to reinstate workers, bargain in good faith, or comply with occupational safety and health (OSH) standards. In practice, courts move very slowly, and law enforcement institutions are subject to accusations of corruption. The real world of Thai labour law can only be understood within this larger picture. For the vast majority of workers, the legal system is simply unavailable and irrelevant because it is too slow, too expensive, and without the power to right wrongs.
A more positive part of this picture is the 1997 Constitution, which promises to establish courts and other institutions to redress governmental illegality, check corruption, and correct undemocratic practices. The Constitution contains broad articulations of human rights, equal rights, consumer rights, establishes protections for women, children, the disabled, and minorities, and has several novel enforcement provisions.

Non-governmental organisations, activist lawyers, and community and labour organisers are just beginning to make this Constitution an institutional reality. For example, the Department of Labour Protection and Welfare has taken the utterly unsupported position that traditional unions in newly privatised enterprises be dissolved. The petroleum workers’ union has challenged this ruling in the new Administrative Court.

At the same time, undemocratic institutions - including those that have visited repeated military dictatorships upon the country - continue to use law to thwart free expression and activism. Defamation laws are routinely employed to suppress expression, including against trade unions seeking to publicise the facts of a labour dispute. Employers and others use civil and criminal defamation measures to intimidate and impose legal costs on activists; serving workers with legal papers during a strike is intimidating. Employers also seek to have workers arrested in labour disputes. Labour consultants aping US ‘hard-ball’ labour relations tactics are surfacing.

Nevertheless, a few committed legal activists are beginning to use the legal system to benefit workers; rights are being pursued in OSH and other areas. The rights of migrant and illegal workers, bonded workers, and illegally detained workers are also being asserted in legal and other fora.

There is scant economic incentive for employers to comply with labour norms, and compliance rates are low. The availability of cheap, often illegal, and hence utterly unprotected labour is so high that there is a concrete and powerful economic incentive to avoid legally mandated labour costs. The existence of a labour surplus, the trade in women and girls, and the surfeit of Burmese and rural Thai migrants all serve to marginalise traditional labour and employment law mechanisms and institutions. Courts provide no counterweight to these raw economic forces; other enforcement agencies are largely ineffectual.

Legal resources are heavily skewed in favour of employers; few lawyers wish to represent trade unions or workers. Yet there are several legal aid institutions and law firms that counsel worker groups.

The Economy

The formal economy now rests on a mix of agriculture, heavy and light industry, tourism, and services. Thailand also has a large illegal and informal economy; prostitution is a major element of this world. The informal sector possibly comprises over five million workers.

With a population of roughly 63 million, Thailand has 13.9 million agricultural workers and 17.4 non-agricultural workers. About 1.2 million are unemployed, and 13.1 million persons older than 15 are not attached to the labour force. Although many workers are employed in small enterprises with fewer than 100 workers, almost 60 percent of workers are now employed in enterprises with over 100 employees. Small enterprises are notoriously difficult to unionise. Women are concentrated disproportionately in larger enterprises, in the export-oriented sector, and foreign invested enterprises.

The depredations of the neighbouring Burmese junta pushed over a million job seekers into Thailand. Most of these migrants have no legal status and are ruthlessly exploited to the point of death, indicating new lows in inhumanity. Thai employers also exploit illegal migrants from Laos and Cambodia. There are about three million illegal workers in Thailand, 10 percent of the labour force.

Labour and employment law

Thailand has constitutional provisions, statutes, and regulations governing employment, industrial relations, social security (SS), OSH, and discrimination.

The Constitution

The 1997 Constitution forbids slavery, peonage, and forced labour. It establishes the full range of basic human rights, including those that pertain to workers such as the rights of freedom of association, the right to form trade unions and other organisations. Gender equality is required. This Constitution also forbids discrimination on the ground of race, religion, gender, age, handicap or disability, religion, education, politics, and status. It would violate the spirit of the Constitution to limit basic human rights to Thai citizens; with millions of foreign workers in Thailand, this reading is critical.

Can private persons, including workers and unions, invoke these human and worker rights directly in courts, or are these rights just ornamental?

The Constitution confers the status of supreme law upon these basic human rights, binding on the state and all its organs and officers, including courts. Thus, every court would have the obligation to enforce basic human rights, including worker rights, in all cases pending before them.

The Constitution establishes an Administrative Court to correct administrative illegality, and a Constitutional Court to review legislation for compliance with constitutional norms at the request of parliamentarians and/or the Prime Minister. Private parties have the right of access to the Administrative Court to test governmental action for conformity to law, but do not have direct access to the Constitutional Court.

Review, which applies to all courts, should be fully available to private parties. This argument sustains the ability of workers, trade unions, and civil society groups to invoke basic human rights in courts - independently of, and often against the government. All courts are required to apply human rights norms in all cases.

Bundit Thanachaisethavut, the most authoritative expert on Thai labour law, notes that lower order administrative pronouncements often are inconsistent with, and sometimes violate provisions of the Constitution and statutes.
Many Constitutional guarantees have no implementing statutes. Administrative ministerial orders, office directives, and departmental directives conflict with superior law including the Constitution. Laws written before the 1997 Constitution that appear to violate its principles, and military edicts still plague legal order.

One commentator wrote about Chinese law in terms that also describe Thai law: The disparate mass of laws and regulations, which makes up the formal written sources of law, does not possess sufficient unity to be regarded as a coherent body of law. In their disarray, the sources of Chinese law seem barely capable of providing the basic point of reference, which all complex systems of law require.

Often this obscurity is used to defeat the intent of the Constitution and the statutes in labour conflicts.2 The reconciling function within a judiciary may often require judges to strike down administrative regulations, overturn governmental decisions, and even nullify unconstitutional statutes. This is why the right of workers and trade unions to directly access judges and invoke constitutional review is so important.

Thai judges are, largely, uncomfortable with this role. Consequently, inconsistencies and outright unconstitu-tionality remain. However, powers of review are beginning to be invoked - with far-reaching consequences for the enforcement of human and worker rights, and labour and employment law.

General provisions of the law

All relationships of employment are viewed as contracts of hire of services, given that slavery, peonage, and forced labour have been long abolished and free labour is constitutionally established (1929 Civil and Commercial Code, Book 3). Free labour contracts are for a certain period fixed by agreement or law, and are terminable provided that compensation is paid for premature termination. All other contracts are terminable at the will of either party.
The Labour Protection Act 1998 (LPA) is a general enactment governing all employment contracts. These provisions establish minimum wage, hour, and related labour standards for all employees, require leave, and prohibit pay abuses that flourish in low wage, labour surplus economies, such as paying wages to someone other than the worker.

These standards govern cases where the employer and employee have not negotiated more favourable terms. These terms are to be published in every work place. Employees are compensated for terminations. Employees who have not seriously breached the employment relationship are entitled to severance pay. If an employee is terminated before a fixed-term contract expires, the employer pays a penalty. Severance pay is critical in Thailand, as there is no unemployment compensation.3 

This law contains provisions for equal treatment of the sexes at work and prohibits sexual harassment by supervisors, inspectors, and managers. The LPA establishes equal pay for equal work. Employers may not terminate employees because of pregnancy, and must reassign pregnant employees to suitable work if medically required.

The law prohibits certain abusive labour practices, such as exacting deposits from workers, refusal to pay wages on time, and fining employees; bonded child labour is forbidden; excessive and inappropriate deductions from workers’ wages are forbidden. This law requires payment for severance, holiday and vacation, overtime, sick leave, and pregnancy/maternity.

Sick leave is compensated up to 30 working days a year. The law offers pregnant workers leave for 90 days (only 45 of them paid). 
The definitions that outline this part of the law are broad. An employer is any person who pays wages to workers. An employee is any person who works for an employer in return for wages. The definition of employers includes those who subcontract work to a contractor for a lump sum, or use labour contractors. If a business is sold, or transferred, the duties and obligations of the employer transfer to the new employer. The LPA excludes state enterprise, agricultural, home workers, civil servants, and private school teachers.
Workers claiming pay and benefits may go to Bangkok’s SS Office in the Ministry of Labour and Social Welfare. A labour inspector investigates the facts, and issues a decision. Both employer and employee can challenge the inspector’s ruling in the Labour Court.

The Labour Courts, the centres for enforcing all labour law, have three judges - one each from the Ministry of Justice, the employer, and labour. In practice, the official judge controls the proceedings and the outcome.

Social Protections

Thailand has no union movement of sufficient density to impact wage patterns in private industry. Consequently, there are no known collectively bargained pension schemes, and hence no private sector labour markets requiring pension benefits to attract workers. Some large-scale employers provide private pensions.

Workers’ Compensation

Thailand has a workers’ compensation scheme (Workers’ Compensation Act 1994). The statute requires employers to ‘immediately’ pay designated medical expenses upon injury or disability up to around US$1,200. The employer must also pay for rehabilitation, funeral expenses, and a monthly ‘indemnity’ i.e. a percentage of wages. Maximum compensation for total disability is 60 percent of salary for up to 15 years. Compensation for death is limited to 60 percent of salary for eight years, plus funeral expenses at 100 times the highest minimum wage - i.e. around US$500. Some occupational diseases qualify for compensation, but many recognised internationally are not.
The statute requires employers to contribute to a fund administered by the Ministry of Labour and Social Welfare based on a percentage of payroll. Shockingly few claims on the fund are approved. Claimants can go to the Labour Court, but some judges are unfamiliar with the causes of occupational diseases, and deny claims certified by OSH specialists as caused by work.

For example, a woman textile worker suffering from ‘white lung’ (byssinosis) was denied compensation by a court, which reasoned that she could have contracted the disease from washing clothes at home! There is a high non-compliance rate with contribution requirements.

Occupational disease, injury, and death rates for Thailand are hopelessly high, especially compared to those in newly industrialising countries like Malaysia and South Korea. This sad record especially affects women workers.
Employers often pay the victims of occupational injury, disease, and death a lump sum right after the accident. US$5,000 is considered generous, but is less than the price of a pedigree dog - as one labour lawyer noted. Many lawyers and unionists also suspect that there is a policy to steer victims away from the mainly employer funded workers’ compensation system to the SS system, to which employees also contribute.

General social security

Thailand also has a general ‘SS’ system based on three SS Acts. Employees, employers, and government fund the system. It is designed to provide employees and their dependants with benefits for non-occupational injury and disease, maternity, ‘invalidity (disability) unrelated to work’, non-occupational-related death, child care including tuition and medical expenses, and retirement. To obtain these benefits, the employee must have worked and contributed for typically 10-15 years, limiting coverage significantly in a country with a youthful workforce. In April 2002, the Act’s coverage was expanded to all companies with one employee or over, i.e. all workers in the formal private sector. But can the government finance this expansion? There is no unemployment insurance.

Provident Funds

Under the LPA, employers with ten or more employees, and their employees, must contribute to an employee welfare fund that pays employees who resign or die. This fund provides a lump sum and periodic payments to workers who resign and the dependants of dead workers. Together with severance pay, these benefits cushion the financial impact of retirement.

Employers with ten or more employees can establish their own ‘provident’ funds, and thereby become exempt from contributions to the central Employee Retirement Fund. State enterprise and governmental employees have a separate provident fund and SS scheme. Civil servants enjoy a defined contribution and benefit pension system.
One must question the level of compliance with the contribution requirements of this social safety net. It is doubtful whether there are sufficient auditors to collect delinquent contributions. Many workers may never be entitled to, or obtain - even if entitled - adequate, periodically paid unemployment, disability, pension or survivors’ benefits, and health care insurance. Hordes of workers in the informal and illegal sectors have no hope of such benefits. Thus, for a significant portion of workers, income is simply wages. Disabled workers, the dependants of deceased workers, the unemployed, and the aged are often left to their own devices.

Occupational Safety and Health

Enforcing OSH standards is weak, and Thailand slaughters, maims, and exposes workers to hazards at an inhumane rate.
One OSH law requires employers with 50 or more employees to employ full-time, qualified, and accessible safety and health officers. Employer with 50 or more employees must also establish official worker/management OSH committees that meet regularly. In workplaces with less than 50 employees, employees on other duties but with OSH training may serve as OSH officers.

It is doubtful that these OSH representation programmes function at all in most work places. Where appointed, the representative or committee is often from management.
The scope of the rules to prevent injury, death, and disease is inadequate; the rules are often outdated or simply ignored. Except for some innovative programmes, little governmental emphasis is put on OSH.
A coalition of trade unions, victims’ groups, and OSH advocates has launched a campaign to reform this inadequate system.

Discrimination

The Constitution forbids gender, race, ethnicity, age, disability, and other discrimination. The labour law requires equal treatment of men and women in employment, equal pay for equal work, and forbids termination on the ground of pregnancy. It forbids sexual harassment by management and inspectors. Thailand has ratified ILO conventions on race and gender discrimination. The Constitution affords citizens complaining of discrimination direct access to the courts. This law remains ornamental.

Industrial relations

Thailand has a complicated statutory scheme for establishing trade unions in the work place, and for resolving industrial disputes. There are separate Labour Relations Acts (LRA) governing private and state enterprise employment. Until recently, state enterprise unions could not affiliate with private sector unions, in blatant violation of the Constitution and international labour law. Now, state enterprise unions may, through their congress, the State Enterprise Workers Relations Conference, affiliate with one private sector labour congress. Individual state enterprise unions still cannot freely affiliate with private sector unions, federations, or congresses.
Labour relations law is not adequate to the essential tasks of protecting labour activists from retaliation. It has little capacity to correct employer intimidation and union busting. Thailand has not ratified ILO Convention Nos. 87 and 98 on the freedom of association and collective bargaining.

The law is principally enforced by meagre fines, often obscure and narrow bureaucratic orders, and back pay awards from Labour Courts. Employers can ignore fines and letters from bureaucrats. The most the employer will have to pay in the Labour Court is past wages at a meagre interest rate - an item owed in any event. Employers are routinely given long continuances by Labour Courts, whose delays cause workers to settle for a fraction of their dues.

Thus, the law invites employers to violate it. Violations have no cost consequences; thus the law does not impact the labour market, rather than providing incentives for compliance. In this environment, the law-abiding employer is at a competitive disadvantage.

Thai law allows ten employees to establish a labour union. This low limit promotes union fragmentation. The union organisers must register the union in order to submit demands to an employer and to become legal. In practice, the employer gets a copy of the list of union formers. Only Thai nationals at least 21 years old may form a union. Only Thais aged 25 or over may serve in union office. Unions can be established in single enterprises, or as sectoral institutions.

The LRA’s protection of union formers, officers, and activists is full of loopholes.
Preventing employees from joining unions is broadly prohibited. Informal and spontaneous concerted activity by workers is not protected.

Even where union activity is protected, infringed freedom of association rights are cashed out at a discount; the dismissed activist must settle for part of the wages due him/her simply to survive. Reinstatement is rare. It is common practice for employers to terminate or transfer employees who file to register a union.

Representative status for unions is established in work place elections. A union must be supported by at least one fifth of the employees to represent them with an employer. Any agreement negotiated by a representative union is binding on the union’s members. Where a union can establish that it represents two thirds of the employees, any agreement it negotiates with an employer is binding on all employees, providing the facility employs at least twenty employees. Any business with fifty employees may set up an employee committee to provide worker voice. If a representative union exists in that work place it can appoint representatives to the committee. If more than half the employees support the union, that union appoints the entire committee. There is much talk of using worker committees to supplement trade unions.

This system sponsors union instability, multiplicity, and fragmentation. One feature of the LRA in particular serves to render unions unstable in the institutional sense. The LRA requires that union organisers, officers, and members must be full-time active employees. Job change and dismissal, therefore, threaten the union’s institutional continuity by ousting union officers. In sum, the Thai labour law does not promote effective trade union organising or protect those workers brave enough to instigate a union drive.

Collective bargaining in Thailand is not well developed. Outside certain industries and unionised settings, wages are simply the minimum wage for most unskilled workers. In companies where there are established collective bargaining relationships, the agreements are skeletal. Employers often subcontract unit work to avoid union agreements. Strikes and lockouts, provided notification, conciliation procedures, and timetables are followed, are legal - except where the government decides otherwise.

Notes
  1 The emphasis on punishment is common in most ancient legal codes. However, where courts are not prominent in settling civil disputes, civil remedies remain limited.
  2 For example, Thai law requires that employees be provided certain leave. The corresponding ministerial regulation defeats this law by affording employers an exemption on grounds of a detrimental impact on business. The use of obscurity to defeat claims of workers is hardly unique to Thai law.
  3 However, employers tend to evade these obligations by dismissing employees on their 119th day of employment and then re-hiring them immediately under another contract. Workers not aware of rights or scared of losing their jobs do not challenge this evasion.