By Junya Yimprasert and Christopher Candland

Junya is co-ordinator for the Thai Labour Campaign;
Christopher teaches political science at Wellesley College
Massachusetts, USA

More about Codes in Thai factories in Can Corporate Codes of Conduct Promote Labour Standards? Evidence from the Thai Footwear and Apparel Industries by the same authors, available from the Hong Kong Christian Industrial Committee and the Asia Monitor Resource Center

By Junya Yimprasert and Christopher Candland
Junya is co-ordinator for the Thai Labour Campaign;
Christopher teaches political science at Wellesley College
Massachusetts, USA

More about Codes in Thai factories in Can Corporate Codes of Conduct Promote Labour Standards? Evidence from the Thai Footwear and Apparel Industries by the same authors, available from the Hong Kong Christian Industrial Committee and the Asia Monitor Resource Center

Lian Thai Industrial Co. Ltd., located in Omnoi Industrial Estate, Samutsakorn province, is a factory owned by a Hong Kong business woman. It was selected by Nike and the Global Alliance for Workers and Communities for a pilot project. The workers formed a union in 1983 and have been actively involved in labour struggles in the Omnoi and Omyai Industrial Zone for many years. There are constant cases of labour violations in factories like Lian Thai where the Global Alliance project is implemented.

The factory (producing mostly for Nike and the GAP) is currently negotiating a new contract with management. Although the Global Alliance report is quite positive, the reality for Lian Thai workers is grim - quite different from the description in the report.

Global Alliance engaged a team of researchers from the Chulalongkorn University Social Research Institute to conduct an assessment. The researchers could not provide us with any information, as the Global Alliance had taken the primary data and all the files away. The researchers also had to sign an agreement with the Global Alliance guaranteeing not to publish any of the data, with huge penalties for violations of the agreement.

The Global Alliance assessment

A questionnaire was divided into eight parts: 1) worker profile; 2) safety; 3) education and skill; 4) financial status; 5) debt and saving; 6) working environment; 7) future plans; and 8) community activities.

The Global Alliance report indicates that 80-90 percent of workers are women earning more than the minimum wage.

The report indicates that workers are satisfied with safety at work, and says workers have good relations with management, but goes on to discuss workers' concerns about safety. It also says that "focus group discussions reflect poor communication between management and workers".

The report claims workers' income is composed of 38 percent from bonus, 34 percent from fixed income, 19 percent from spouses, and eight percent from overtime. It also says 72 percent of those questioned think 'current overall income is fair'.

The workers also expressed their desire for stable employment.

What the assessment failed to reveal

The questionnaire was divided into eight parts, but it was difficult for workers to expose violations. Instead it limited workers' responses through the use of multiple choice answers.

Issues covered by Thai labour laws were excluded from the questionnaire - particularly on general working conditions, working hours, and time off. No questions addressed problems with freedom of association or violations of trade union rights.

The questions were not specific about how much workers earn and how many hours they work. Instead they were asked whether they have sufficient income and what they do with it.

Lian Thai workers earn only minimum wage and have never received bonus. Therefore the report's claim that workers earn 38 percent from bonus is false. Income from overtime is claimed at only eight percent, which is much lower than the reality.

The Global Alliance emphasised that workers need instruction in saving money, but this incorrectly assumes that workers earn enough to save.

In fact most apparel and footwear factories in Thailand pay only minimum wages, including Lian Thai, and never receive a bonus. The report could only claim that Lian Thai workers received higher than minimum wages because of the excessive amount of overtime worked. The union feels that as they have been working long and hard hours, the company should consider demands for better pay and improved conditions.

There has been no increase in wages nor benefits for three years, even though statistics up to 1999 show the company made annual net profits of 61, 23, 109, and 64 million baht. Lian Thai has taken advantage of the current labour situation in the garment sector where many firms are closing and retrenching workers without pay.

Lian Thai workers continue to work in the factory because they earn 50 percent of their income from working until 9 p.m., sometimes until midnight or even all night, and every Sunday. Though they complain of over-work, they have no choice because they need overtime money so that they have extra to send to their families. Many Lian Thai workers work overtime each month to make their wage up to the minimum wage of 4,050 baht a month. (US$1 = 42.14 baht)

Many workers' lives revolve around a vicious circle of debt. As soon as they receive wages they pay debts but must immediately make more loans.

The Global Alliance assessment was conducted in the factory where management selected workers for the research. Interviewees told us that the questionnaire guided them, emphasising that activities be conducted at community level, even though there are still many problems in the factory.

The aim of the GA assessment is to look into practical activities but not the problems faced by workers in the factory, especially working hours and freedom of association. It was felt that the questionnaire was aimed at results to benefit the Global Alliance programme in the future but not to show up labour violations.

The GA interprets the demand for long-term job security as job satisfaction! Yet it is merely a reflection that Thailand has more than three million unemployed people.

Workers are contracted for four-months. At the end of the contract, management pressures these workers to reapply for the old job to avoid paying benefits to these workers. The company also underpays trainees by paying 120 baht a day for 40 days. This practice violates the labour protection law which states that, "An employee is entitled to get his basic pay not lower than minimum rate of basic pay."

How do workers benefit from the Global Alliance?

The most positive change is that for the first time Lian Thai allowed the union to conduct its general congress inside the factory on 12 March 2000.

There is a slight improvement in labour relations between the union and the company. There has been improvement in toilet facilities, but the company flatly refused to build more toilets. The company installed an extra air conditioner, but it is still hot and dusty in the workshop.

Although Lian Thai organises sports competitions, each team that joins a competition has to pay 100 baht for the application fee! This money is used to pay for a winning prize. So workers pay but the factory contributes no money.

The union cannot recruit workers during the probation period. Past experience showed they tended to be dismissed.

Conditions and income

Due to union negotiated benefits, Lian Thai workers have:

• six days annual leave (according to law);
• two uniforms a year (shirts, trousers, and sandals);
• transportation;
• dormitories (for single workers, but no married quarters);
• living subsidy, 260 baht a month paid at Chinese new year;
• three days' wages a month 'diligence money' (no days off);
• 3,000 baht death benefit for immediate family members;
• annual feast.

The company interprets overtime pay as contributing to higher than legal minimum wages. This is a myth many companies repeat. The Lian Thai factory is also starting to implement the target rate system, but many workers reject it since it pressures them to work harder and for more hours, but for less income.

Observations and recommendations

If the footwear and apparel producers only pay the minimum wage instead of a living wage, it is difficult for the union to promote a 60 hours maximum working week, since workers request overtime.

In 1997 Ms. Chamlong Puthasom was elected as a treasurer of the union. In March 1999 the company charged her with stealing a 140 baht T-shirt. She was jailed for four hours before the union collected 50,000 baht from the members to bail her out. They were convinced that she had been targeted by the company.

The management should take union requests seriously:

• they built a luxury room for the management, but deny decent toilets to workers;
• they refused to clean up a flood on the factory ground floor and the dormitory during heavy rain;
• it is difficult for workers and union to contact families and friends because the company refused to install phones in the union room and the dormitory;
• workers are afraid to talk about their problems due to threat of dismissal. The threat is real as Lian Thai subcontracts orders to nearly 40 factories, including its own subsidiaries in Thailand;
• Lian Thai tries to stop union committee members from attending labour seminars, which are necessary to improve worker education;
• GA pressured Lian Thai to pay for implementing the GA project at the factory, though at the beginning management and workers believed that GA would cover the cost;
• at the beginning GA gave workers the impression that they would provide funds for a workers' development project. Later they said it was a misunderstanding by the research team, and they had no money to pay for such activities.

Lian Thai should consider the long-term benefit of a better public image which it would have if it co-operated with the workers to seriously implement the demands of the workers. The firm should improve working conditions and stop suppressing legal activities of the union and its members.

The Global Alliance limits training activities to workers who are not more than 25 years old, although older workers also need training otherwise they risk dismissal.