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Recent Labor Relations and Collective Bargaining Issues in Thailand

Chaturong Napathorn (Corresponding author)

Department of Human Resource and Organization Management

Faculty of Commerce and Accountancy

Thammasat University, Rangsit campus, Klongluang

Pathumthani 12121 THAILAND

Email: chaturon@tu.ac.th

Suchada Chanprateep Department of Microbiology, Faculty of Science

Chulalongkorn University, Phayathai Road, Patumwan

Bangkok 10330 THAILAND

Email: suchada.cha@chula.ac.th

ABSTRACT

During the recent economic crisis, globalization including economic and financial liberalization affects labor–

management relations in Thailand, especially at the national level, with respect to various aspects, such as the

application of numerical and functional flexibility, which leads to mass layoffs, lower job security, and more

confrontational collective bargaining between employers and workers, and the roles of mass media, which

broadcasts several cases in Thailand regarding unfair labor practices to people across the globe. In additions,

the fragmentation of labor organizations and the inability to merge them together is a critical problem that will

weaken the labor movement within the country.

Keywords: Labor Union, Industrial Relations, Labor Relations, Collective Bargaining Issues, Thailand

1. INTRODUCTION

Labor relations are considered the study of the relationships existing in the workplace between employers and

workers or between workers, the organizations that represent employers and workers, the government, and other

types of institutions in society as a whole (Dunlop, 1958). In addition, the field of labor relations includes the

study of personnel management, collective bargaining, labor laws, and social insurance systems. Hence,

understanding all of the sub-fields of labor relations as mentioned above will provide us with insights into the

real world of work and how to solve the problems existing within such a world, (Kaufman, 2006) such as

workplace disputes between employers and labor unions, strikes, and lockouts, to promote fairness, efficiency,

and a satisfying relationship between the two parties as well as to foster win-win solutions for the labor-

management problems in the workplace.

Labor relations are often country specific (Caulfield, 2004). That is to say, labor relations are considered a

system and tend to be different between countries. Thus, understanding the labor relations system as well as the

collective bargaining situation in each country will also help our understanding of the nature of the economy,

industry, production methods, technological and socio-cultural dimension, as well as the background and

development of such a country (Kuruvilla, 1994a). On the other hand, understanding the external developments,

economic expansion, and other stimuli and changes affecting each country also helps us better understand the

labor relations system in a specific country as well. The study of labor relations and collective bargaining should

therefore not be overlooked.

One of the significant developments affecting the labor relations system in each country is globalization

(Caulfield, 2004). Globalization is viewed as the process of greatly intensified business expansion across the

globe. Such business expansion also fosters deregulation, economic integration among different regions and

nations, financial liberalization, freer flows of capital, and the movement of labor across countries. That is, the

production processes that were once unified in one region or country are dispersed to different parts of the world,

and the manufacturing base of several multinational companies tends to move to low-wage countries (Moody,

1997). Globalization also affects the labor relations system and the collective bargaining situation in Thailand in

several ways. For instance, globalization leads to new types of employment among informal workers, who are

the majority of workers in Thailand, such as part-time employment and outsourcing (Pholphirul, 2009). Such

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new types of employment result in job insecurity among workers, and because they cannot be members of labor

unions, their rights and benefits cannot be protected (Sukmai, 2010). In addition, globalization also fosters the

immigration and emigration of labor in Thailand (Pholphirul, 2009). In this paper, the authors purport to explore

and gain a better understanding of the recent labor relations and collective bargaining situation in Thailand. It is

hoped that the government and other relevant parties will be able to conduct further research on these issues and

develop proper solutions to any relevant problems.

2. LITERATURE REVIEW

2.1 Overview of the Labor Relations and Collective Bargaining Situation in Thailand

Prior research by Kuruvilla (1994a) stated that the national industrialization strategy of each country is prone to

affect labor relations and human resource practices at different levels, the national level, industry level, and

workplace level, of the country (Kuruvilla, 1994a; 1994b). In addition, the contemporary research about

industrialization and labor relations in seven countries around the world edited by Frenkel & Harrod (1995) also

classified labor relations into three different levels: the national level, industry level, and workplace level

(Frenkel & Harrod, 1995). The authors thus suggest that to profoundly understand the labor relations system and

collective bargaining situation in each country, they should concentrate on the situation that exists at the level of

the nation, sector, and firm. Thus, the authors sketch the conceptual framework of this paper by classifying labor

relations and collective bargaining issues into three levels: the national level, industry level, and workplace level.

First, in this section, the authors investigate the historical and economic background of Thailand as well as the

overview of labor relations actors, the structure of the labor force, and the labor relations climate in Thailand.

2.2 Historical and Economic Background of Thailand

Thailand was predominantly considered an agricultural economy for a long time. However, Thailand became

more involved in trade, business, economic and industrial development after World War II, and drastic changes

in the economic situation of Thailand occurred after the government announced the first national economic plan

in 1961. The first and second national economic plans sketched a clear import-substitution industrialization

strategy for Thailand (Linnemann, et al., 1987). At that time, many factories and industries emerged, and the

number of labor personnel who worked in urban areas increased. This strategy also resulted in the expansion of

direct investment. Several legislations were issued to support this strategy, such as the Investment Promotion Act

(U-vanno, 2010). A high tariff system and other protective devices were also implemented. It has been suggested

that the core of the import-substitution industrialization strategy was the protection of domestic industry from

foreign competition. Put simply, the government tended to act in a protectionist manner in this strategy

(Macdonald, 1997).

Then, during the implementation of the third through the fifth national economic plans, the government

attempted to emphasize the export-oriented industrialization strategy (Linnemann et al., 1987). The Investment

Promotion Act was revised in 1972 to support this strategy and helped expand the electronics industry. The

government offered several types of incentives for exporters, such as tax advantages, exemption from import

duties and business taxes on intermediate goods and machinery. In addition, claims to lower the cost of

electricity were also offered to exporters. Moreover, Thailand obtained benefits from improved access to the US

market through the Generalized System of Preferences (GSP) from this strategy

(http://www.unctad.org/en/docs/iteipc misc22_ en.pdf). With respect to the labor relations system, in 1975, the

Labor Relations Act B.E. 2518 was formally issued. This act is still implemented today. This act specifies that

workers are entitled to set up labor unions, negotiate with employers, set up a Workers‟ Committee, and follow

the grievance procedures. The traditional pattern of relationships between employers and workers has changed to

a classical conflict relationship (Chandravithun, 2001). Before 1972, workers were exploited by employers

without any rights to set up their own labor organizations or negotiate with employers. After the issuance of the

Labor Relations Act B.E. 2518 (1975), many parties (employers, workers, and the government) were relevant to

the labor relations system, and the conflicts between employers and workers were clearer. When workers were

able to set up their labor unions according to the act, employers thought that their privacy or unity was being

deprived and tried to intervene or impede such actions as much as possible. Sometimes, the employers attempted

to weaken the labor unions within their enterprises or create disharmony among the workers.

Since 1987, Thailand has been recognized as one of the newly industrialized countries or the Fifth Tiger and the

Cinderella of Asia (Chandravithun, 2001). The World Bank classified Thailand as a member of the East Asian

countries having miraculous economic growth. However, the beautiful image of the Thai economy turned out to

be a nightmare at the beginning of 1997 due to the decrease in the export growth rate from 20% to 0% per year,

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followed by the economic depression, the collapse of financial institutions and real estate businesses, as well as

the capital outflow and the dissolution of businesses. The government had to provide financial assistance to the

financial institutions, and this affected the foreign exchange reserve and the Baht value. Thus, the government

announced the Baht devaluation and the floating exchange rate. Finally, the government requested assistance

from the International Monetary Fund. After the announcement of the floating exchange rate, the Thai Baht

devalued rapidly, leading to higher levels of international debts. However, the devaluation of the Thai Baht

fostered Thailand‟s competitive advantage in terms of exports and resulted in the surplus of current accounts.

This surplus helped promote the ability of Thailand to repay the international debts that were incurred before the

economic crisis. At the same time, the Thai economy was able to recover from the crisis because of the higher

export rates (http://www.oknation.net/blog/print.php?id=62957). However, since 2007, the deep financial crisis

(called the Hamburger Crisis) in the US has seriously affected the world economy as a whole and particularly the

nation of Thailand. Many enterprises and factories in Thailand have laid off workers because of the economic

slowdown and its impact on the export sector of the country

(http://www.labour.go.th/webimage/images/load/file/breefRelat51.pdf). Nevertheless, some experts predict that

the impact of the Hamburger Crisis on the Thai economy is not as severe as that of the economic crisis of 1997

(http://khrueahong.ob.tc/-View.php?N=1).

With respect to the labor relations system, the economic crisis starting in 1997 (called the Tom-Yum-Kung

Crisis) seriously affected labor, workers, and new graduates. Many workers and labor personnel were laid off

due to the decrease in the demand for labor in the public and private sectors (Khinkaew, 1999). New graduates

could not find jobs or took a longer time to find jobs. Some people moved back to their hometowns in the rural

provinces. Like the Tom-Yum-Kung Crisis, the Hamburger Crisis also affected labor and workers in the country.

Due to the mass layoffs of workers, especially in factories and companies in the Thai export sector, the

relationship between workers and employers was likely to be conflict ridden. Employers closed down factories

and laid off all affiliated workers to survive the crisis, and workers went on strike to claim their rights from

employers. The number of laid-off workers in Thailand has continuously increased, and labor–management

relations have worsened. If the situation does not improve, good industrial relations and cooperation in the

workplace cannot be maintained, and this will affect the productivity, competitiveness, and growth of

companies, industries, and the whole country.

2.3 Labor Relation Actors, Structure of the Labor Force, and the Overall Labor Relation Climate in

Thailand

First, the authors focused on the picture of the labor unions and labor organizations as well as employers‟

organizations in Thailand. The Thai economy is highly uneven. That is, wage-earning or salaried workers

constitute 36.6% of the employed workforce, or approximately 14.1 million people as of 2009

(http://service.nso.go.th/nso/nsopublish/service/survey/workerOutRep52.pdf). The remaining employees are

either unpaid family workers or own-account workers, mostly in the informal sector or in suburban or rural

areas. From the total number of employed workers in Thailand, approximately 7% are government workers,

where the establishment of labor unions is exempted according to the Labor Relations Act B.E. 2518.

Approximately 1% of the employed workforce are state-enterprise workers, where unionism is strong. The rest

of the employed workforce consists of private-sector workers (Pholphirul, 2009). However, it is not surprising

that most of the private-sector workers are non-union workers due to the highly paternalistic labor–management

relations existing in such enterprises and the limitation of the size of the enterprises; the number of micro-

enterprises or enterprises employing 1–20 workers in Thailand is approximately 319000, with approximately

1650000 workers as of 6 July 2010 (http://www.labour.go.th/map/thailand.jsp), and unions cannot be established

within such enterprises. Not surprisingly, the rate of unionization in Thailand is still very low

(Thanachaisetthavut, 1996; Khinkaew, 1999). The authors have found that less than 5% of the workers in

Thailand are members of labor unions (see Tables 1 and 2).

In addition, as in many Asian countries, there is also a great deal of fragmentation and rivalry among the unions

in Thailand (Erickson et al., 2001). Since setting up labor unions, labor union federations, and labor union

councils in Thailand is not complicated, it is not surprising that there were 12 labor union councils (representing

the highest level of labor organization in Thailand) and 1235 labor unions in Thailand in 2009 (Tables 1 and 2)

even though the rate of unionization is very low, as mentioned above. Some groups of workers who realize the

weakness, fragmentation, and lack of unity in the Thai labor movement established the Thai Labor Solidarity

Committee to represent Thai workers as a whole and attempt to strengthen the labor movement in the country

(http://solidarity.blogth.com/). Currently, the committee appears to be one of the most significant labor

organizations in Thailand.

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There are 377 employers‟ associations, 2 employers‟ association federations, and 12 employers‟ councils

(representing the highest level of employer organizations) in Thailand (see Table 1). Among the 12 employers‟

councils, only the Employers‟ Confederation of Thailand (ECOT) is a member of International Organization of

Employers and works as the representative of Thai employers in working and collaborating with the

International Labor Organization (ILO) (http://www.ecot.or.th/ecot/index.php?option=com_content&view=

article&id=120&Itemid=128).

Secondly, with respect to the structure of the Thai labor force, Table 3 suggests that much of the labor force is

engaged in agriculture and services. The agricultural sector is still the largest sector in terms of employment in

Thailand, with approximately 14.6 million workers in this sector (Saichua, 2010). However, as stated above,

because the national industrialization strategy and the economic development of Thailand focuses on

manufacturing for exports, a larger number of workers tend to move from the agricultural sector to the

manufacturing sector. Not surprisingly, the share of agricultural products in the Thai GDP has decreased

continuously (Pholphirul, 2009). Another sector that should not be overlooked is the service sector. The service

sector includes 6 million workers in wholesale and retail services, 2.6 million workers in hotel and restaurant

services, and approximately 1 million workers in financial and real estate services. Thus, there are approximately

10 million workers in the service sector (Saichua, 2010). The number of workers within the informal sector,

which is the catch basin for people who cannot find jobs in the relatively small formal sector of the Thai

economy, is likely to increase continuously. As mentioned above, globalization leads to new types of

employment, such as contract workers, part-time workers, and outsourcing workers in Thailand; however, the

major problem is that these workers are not fully protected by the laws (Pholphirul, 2009; Levine, 1997).

Thirdly, the climate of labor relations in Thailand has been perceived as autocratic (Deyo, 1995). The system

appears to be under the control of the management even though some forms of worker participation have been

introduced. Often, Thai workers are rather slow to organize due to cultural factors and traditional deference to

seniors (Levine, 1997). Suthakavatin (2005) mentions that a low level of masculinity and a high level of

uncertainty avoidance in Thailand makes Thai society more cooperative and less aggressive (Suthakavatin,

2005). In addition, Siengthai & Bechter (2005) and Siengthai (1993) also state that the industrial labor relations

system in Thailand has been affected by the practices of the “Middle Path” in Buddhism (the national religion),

which discourages Thai workers from believing in extremism. The workers do not feel comfortable taking any

one side; rather, they like to cooperate with one another and believe that quarrelling is not the solution to any

problem (Napathorn & Chanprateep, 2011; Siengthai & Bechter, 2005; Siengthai, 1993). Thus, Thai workers are

reluctant to organize or join labor unions to claim their rights and benefits and seem to obey the order of their

employers or management. In fact, labor leaders and labor activists have been fired from companies for

attempting to organize labor unions within the workplace.

3. METHDOLOGY

3.1 Data Collection

The aim of this paper is to analyze and propose recent labor relations and collective bargaining issues in

Thailand through the study of issues and practices in different workplaces and sectors. Therefore, the authors

conducted field research using in-depth interviews with labor union leaders and members, participants‟

observations, and an examination of company-level documents in Thailand for the years 2006–2010. We

selected 6 well-known industries and 13 workplaces (Table 4) for 4 different reasons. Firstly, we would like to

study industries that are significant players in the national economy and the national labor relations system.

Secondly, we would like to study industries that are prone to being exposed to international competition.

Thirdly, we selected industries from both the manufacturing and services sector. Lastly, the companies in the

sample are a mix of foreign-owned, domestically owned firms, and state enterprises. Two to three leading

workplaces or enterprises were selected in key industries and studied in detail. The industries studied included

industrial sectors such as automobiles, petroleum and chemicals, food and beverages, garment and textiles,

finance and banking, and state enterprises.

Some of the limitations of the data should be considered. First, the data may not be a representative sample.

Instead, the data indicate the labor relations and collective bargaining issues discovered from leading workplaces

in well-known industries. Our argument in this paper is that the issues found from leading workplaces in well-

known industries are an indicator of recent and future issues regarding labor relations and collective bargaining

in Thailand. Secondly, the workplaces in this sample had certain characteristics; namely, they tended to be large-

sized companies with good reputations in their industry. Lastly, respondents‟ biases should be accounted for.

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4. RESUTLS AND FINDINGS

4.1 Labor Relations and Collective Bargaining Issues at the National Level

Firstly, the authors have found that, with respect to globalization as well as economic and financial liberalization,

labor relations and human resource management (HRM) practices regarding numerical and functional flexibility

have been applied across companies in several countries (Mackenzie, 2010; Pernicka, 2005; Heery, 2004;

Goslinga & Sverke, 2003), especially within the Kingdom of Thailand. The examples of numerical flexibility

used by companies in this study include part-time employment, fixed-term employment, tele-working or

working from home, subcontracting, and firings or layoffs. Employers attempt to reduce labor costs to

subcontract part of their production to smaller companies or layoff full-time workers and hire contract workers

instead. They try to save costs with lower wages and fringe benefits for workers (Levine, 1997). The authors

have found that numerical flexibility tends to affect job security among workers and likely weakens the labor

movement within the country. That is to say, contract workers cannot join a labor union in Thailand due to the

fact that the Labor Relations Act B.E. 1975 specifies that workers who will be members of labor unions must be

the same type of workers as those who register the establishment of labor unions with the registrar; workers who

do this are usually permanent workers. Thus, contract workers cannot be fully protected by the labor relations

laws. A larger number of contract workers in the current economic situation help employers manage human

resources more flexibly, but the strengths of labor unions are deteriorated.

We have found that companies, especially in the banking industry, apply functional flexibility such as cross-

working, expanding the number of tasks performed, and some workers do not appear to be satisfied with this

move because they believe that they are treated unfairly and that unions can help them protect their rights and

benefits. However, employers believe that functional flexibility will help promote productivity among the

workforce and that workers tend to develop new skills continuously (Farrell, 2009).

With respect to numerical flexibility, the workforce among Thai companies can be divided into two types. The

first type is the skilled, technical, managerial, and professional workforce or the core workers. Loyalty to the

company among this type of workforce tends to be high, and this workforce is often the object of the company‟s

training and human resource development investments. The second type is the semi-skilled and unskilled

workforce or the peripheral workers (Atkinson, 1985). The number of peripheral workers has continuously

increased over time. Often, loyalty to the company among this type of workforce tends to be low, and the

company does not usually invest its money in the training and development of such a workforce. Thus, HR

managers in the current workplace need to understand this classification of the workforce and must adapt the

company‟s HRM practices to manage each type of workforce more properly and promote loyalty to the company

in the long term.

A large number of companies in Thailand, especially in the export sector, are likely to apply numerical flexibility

during the recent economic crisis by laying off a large number of workers and, sometimes, hiring contract

workers instead. Labor-management relations within the country have worsened. Workers go on strike to claim

their rights from employers. The collective bargaining between workers and employers is likely to be more

confrontational (win–lose approach). Tensions between employers and workers occur. The Thai-style positive

labor-management relations cannot be maintained. If this situation cannot be solved, it will affect the image of

the country with respect to attracting foreign direct investment and, unavoidably, will impact the image of the

labor unions in Thailand. Hence, if possible, the relevant mechanisms that will help promote consultation (and

not confrontation) between employers and workers should be supported (Khinkaew, 1999). The collective

bargaining strategies and practices applied between the main two parties, employers and workers, at the national,

industry, and (especially) workplace levels should foster a more consultative and cooperative environment to

reduce the tension and conflicts between employers and workers. Employers and workers must amicably accept

the status of each other and negotiate for ultimate win-win outcomes.

Secondly, we have found that the fragmentation and lack of solidarity among the Thai labor, labor movement,

and labor organizations have continued over time. As in many Asian countries, the fragmentation and rivalry

among labor unions, labor union federations, and labor union councils is clearly (Erickson et al., 2001; Brown &

Frenkel, 1993). There are too many labor union councils, including 12 labor union councils as mentioned above,

representing the highest level of labor organizations in Thailand, and other labor unions in Thailand, yet the

unionization rate is rather low. Such fragmentation of labor organizations and the inability to merge them

together is a critical problem; if such fragmentation and competition among labor organizations continue, the

labor movement within the country will become weaker. Although mergers are considered the best way to

present unity among labor unions, the personality of the labor union leaders and the ideological differences are

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obstacles for mergers. In addition, labor unions in Thailand are considered to be micro-focused, and labor unions

are sometimes established for personal purposes, not for public purposes (Brown, 2004). It is therefore too

difficult to merge such labor unions together. However, labor unions from various industries have recently

formed the Thai Labor Solidarity Committee (TLSC) with the hope of strengthening the labor movement in

Thailand, overcoming the problems regarding the fragmentation and the lack of solidarity in the Thai labor

movement and protecting the rights and benefits of Thai workers as a whole (Brown, 2007).

Thirdly, we have found that the government of Thailand has not yet ratified ILO Conventions No. 87

(convention concerning Freedom of Association and Protection of the Right to Organize) and No. 98

(convention concerning the Application of the Principles of the Right to Organize and to Bargain Collectively),

although over the past ten years, several labor organizations have attempted to request that the government of

Thailand ratify ILO Conventions No. 87 and No. 98 and amend or issue new labor relations laws that include

contents in accordance with such ILO conventions (Thanachaisetthavut, 2005). Nevertheless, the government

has not yet ratified the conventions and has thus felt no need to follow these conventions strictly

(Thosuwonjinda, 2002). Employers in Thailand have tried to take advantage of this in labor disputes that have

occurred during the economic crisis. Employers are able to close down factories and lay off workers without any

compensation because labor laws have not been amended to comply with ILO conventions and thus do not

protect the basic rights of workers in terms of freedom of association and the right to bargain collectively

(Khinkaew, 1999). Hence, it is important that the government of Thailand take into consideration whether

Thailand is ready to ratify ILO Conventions No. 87 and No. 98. The government should consider both the

advantages and disadvantages of every aspect of the ratification of ILO Conventions No. 87 and No. 98, as well

as their impact on the economy, society, politics, customs and traditions, and labor–management relations

(Phrompanthum, 2005). In addition, the government of Thailand should consider the need to amend relevant

laws such as the Labor Relations Act B.E. 2518, the State Enterprise Labor Relations Act B.E. 2543, and others

following the ratification of both conventions because both laws, especially the Labor Relations Act B.E. 2518,

have been implemented for over 30 years and there are several provisions that need to be amended to comply

with the changing labor movement within the country.

Fourthly, mass media currently plays an important role in the Thai labor relations system as a whole. Labor

unions attempt to broadcast their news, labor movements, and any situations that have occurred within Thai

companies that affect labor–management relations. Due to globalization, the mass media not only aims to reach

the audience and people in Thailand but also addresses people in several countries across the globe. People

throughout the world pay attention to industrial labor relations in Thailand, especially noting violations of labor

rights, unfair labor practices, strikes, and lockouts in the country; at times, the media creates negative images of

the Thai labor–management relations on the international scale.

For instance, the Centaco labor union broadcasted the unfair labor practices occurring within the Centaco Co.,

Ltd., on television, in the newspaper, and in several magazines (http://www.pcpthai.org/autopage

v3/show_page.php?group_id=1&auto_id=1&topic_id=895&topic_no=398&page=1&gaction=on). Information

on this case was also published in Swedish articles (http://asianfoodworker.net/thailand/20071022-poultry-

thai.pdf). The information detailed the labor movement, disputes, the dismissal of workers, and how workers at

Centaco were being threatened by their employers. The labor movement at Centaco and the media alerted people

both in Thailand and in foreign countries about these issues related to labor rights. Workers at Centaco were

supported by international organizations such as the IUF in demanding certain rights from their employers and

struggling to overturn unfair practices.

The mass media affects labor-management relations in both positive and negative ways. For example, positive

impacts include the fact that employers may not implement unfair labor practices because of the influence of the

media. They may be afraid of making negative headlines in newspapers, magazine articles, or on television if

they treat their workers unfairly. In addition, the media will relay news of the actual labor–management situation

in Thailand so that both foreigners and the Thai people themselves, including the government, will pay more

attention to the improvement of labor–management relations in the country and recognize the importance of such

relations. However, the media may worsen labor–management relations, such as in the case of Centaco. It is hard

for any threatened worker to recover pleasant relations with his employer. Therefore, the media is a tool that

should be properly applied to maximize the positive impacts and minimize the negative impacts of labor–

management relations in any country.

Finally, in terms of the government, we have found that labor unions are viewed as instruments for protecting

Thai workers from exploitation and numerical flexibility, especially, layoffs, and subcontracting. The Thai

government should do more to make the process of labor union formation and labor union maintenance easier.

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The governmental policy of prohibiting the anti-union or union avoidance strategies, such as firing labor union

leaders and/or threatening workers if they join unions, should be implemented or revised. Several Thai scholars

have agreed on the changes or amendments of the labor laws in Thailand to protect more fully the rights and

benefits of workers (e.g. Chandravithun, 2001; Thanachaisetthavut, 1996). In addition, with respect to

globalization, the only option for Thai workers to survive in the future is that they be trained to upgrade their

status from low-skilled workers to high-skilled workers; otherwise, several multinational companies may

relocate their plants to China due to the advantages of lower labor costs, or well-known multinational companies

might cut their labor costs by subcontracting jobs to smaller firms. However, the smaller workplaces often break

labor laws, and the labor situation in Thailand will thus worsen (Chew & Chew, 2006; Levine, 1997). Therefore,

the government and labor organizations need to cooperate with the employers to train Thai workers more

systematically and effectively to enable such workers to survive in the turbulent environment.

4.2 Labor Relations and Collective Bargaining Issues at the Industry Level

4.2.1 The Automobile Industry

The automobile industry in Thailand is largely dominated by Japanese companies. Thus, labor relations and

human resource practices tend to meet Japanese standards and follow Japanese methods of production. In terms

of the labor organizations, they are highly unionized, and most unions in Japanese-based automobile companies

in Thailand are strong. The labor–management relations in such companies are considered to be cooperative

instead of confrontational. The collective bargaining occurs at the workplace level, not at the industry level. In

addition, labor organizations in the automobile industry attempt to associate together to form labor union

federations and strengthen the labor movement within the automobile industry in Thailand. However, the recent

economic crisis also affected the automobile industry in Thailand with respect to reduced demand, and all

companies have had to apply numerical flexibility to survive the crisis.

In the case of Toyota Motor Co., Ltd., after the authors interviewed the HR officers and the president of the

Toyota Thailand workers‟ union, it was concluded that the company and labor union attempted to help each

other during the crisis. The company tried not to lay off the workforce and offered the same level of salaries,

bonuses, and fringe benefits to workers. The HR officers came to meet members of the labor union at working

sites as often as they could to hear the needs directly from their workers. The labor union helped to transfer all

information from the company, including helping the company ask all members to comply with the HRM

practices. In the case of Thai Honda Manufacturing Co., Ltd., the largest manufacturer of motorcycles, power

products, and automobile parts in southeast Asia, the president and committee of the Honda Workers‟ Union of

Thailand told the authors that they not only tried to create unity among the labor unions in the automobile

industry in Thailand but considered it necessary to support the workers of the part-maker companies set up their

own labor union. They devoted themselves to helping these workers realize the importance of labor unions and

the good practices of labor unions. The president of Isuzu Engine and Parts Worker‟s Union, one of the union‟s

founders, also agreed with the above suggestions. The labor unions in this study also had a connection with the

labor unions in other countries within their parent company. They provided, exchanged, and transferred working

knowledge and obtained good recognition and acceptance from the company. Thus, labor unions in the

automobile industry in Thailand are some of the strongest groups.

4.2.2 The Petroleum and Chemical Industry

The petroleum and chemical industry in Thailand has recently been affected by the changes in oil prices as well

as the sub-prime problem incurred in the US and the general economic slowdown within the country. The

authors were able to study two leading companies in the industry. Thai Bridgestone Co., Ltd. is based in Japan,

and Thai Carbon Black Co., Ltd. is based in India. In terms of the labor organizations, both are highly unionized,

and the labor unions are rather strong. The labor–management relations in these two companies are considered to

be cooperative. Both companies boast a long and collaborative relationship with the unions. Collective

bargaining normally occurs at the workplace level and is carried out by the president of the company and the

labor union leader. The management and employers accept the existence of labor unions and apply good HRM

practices to take care of the well-being of their workers. In the case of Thai Bridgestone Co., Ltd., the president

of the Thai Bridgestone labor union told the authors that during the economic crisis, with respect to collective

bargaining issues, they did not focus only on negotiations about salary, bonuses, and other fringe benefits. The

workers of the Thai Bridgestone Co., Ltd., have been convinced by the president of the Thai Bridgestone labor

union to help the company save overhead costs, public utilities expenses, and equipment maintenance costs.

Meanwhile, with appreciation, the company tried not to lay off the workforce and offered the same level of

salaries, bonuses, and fringe benefits to the workers as it did before the economic crisis. Thus, their bonuses and

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fringe benefits ranked among the best in the petroleum and chemical industries located in the area. In the case of

the Thai Carbon Black labor union, the ex-president is well-recognized by the company as well as other labor

unions located in the area. He is one of the union founders. Recently, he is concerned about training young

members to be able to run the activities of the labor unions by themselves. He decided to change his position to a

consultant and is trying to transfer his working knowledge and skills to a new generation. Thus, the authors

conclude that, although the high acceptance of a president is important for maintaining the unity of a labor union,

the labor union needs to train its members to understand the best practices in the labor movement and

management for the long run.

4.2.3 Food and Beverages Industry

The Kingdom of Thailand is well known as a country of the „world kitchen‟. Thus, the food and beverages

industry has played an important role in the economic development of the country for a long time. The industry

has continuously grown in terms of manufacturing for export and domestic consumption

(http://ee.dede.go.th/knowledge/ContentLevel3.aspx?gt=1&abs=1000000&abs2=1100000). Some companies in

the food and beverages industry are foreign owned, and some companies are domestically owned. The authors

were able to study the labor unions of Friesland Foods Foremost (Thailand) PCL, a foreign-owned company, and

Siam Food Products Public Co., Ltd., a domestically owned company, as representatives of the food and

beverages industry. The labor–management relations in the foreign-owned company are considered to be

cooperative, but those in the domestically owned company are rather confrontational. The Foremost Thailand

Workers Union is highly unionized. The president of the Foremost Thailand Workers Union also held the

position of president of the Union Federation of Food and Beverages of Thailand. The management accepts and

respects the existence of labor unions. On the other hand, the labor union in the domestically owned company in

this study has encountered problems. Interestingly, the workers in the domestically owned company are not

permanent workers; most of the workers are seasonal workers, so it is hard to organize them into a labor union.

This labor union is weak in terms of labor relations and collective bargaining.

4.2.4 Garment and Textile Industry

The Thai garment and textile industry has become more competitive across the world since 2007 (ISI Analytics,

2008). Although Thailand has two main competitors, namely, China and Vietnam, it has been found that

Thailand‟s products possess better quality and are more widely accepted in the global market. In terms of labor–

management relations and collective bargaining, the authors were able to study two leading companies in this

industry. The Thai Rayon Labor Union is highly unionized, and its labor union is very strong and is widely

accepted as one of the legendary labor unions in Thailand. The labor union leader, one of the labor union‟s

founders, has held the position for a very long time and has had good relationships with the management of the

company. Most of the union members have high school diplomas, and their salary range is 10000–20000 Baht

per year. Thus, he is concerned about how to help the members attain financial stability after retirement. He set

up a savings and credit cooperative called the Thai Rayon Labor Union CO-OP to help the union members. The

other labor union in this study, Teijin Polyesters Workers Union, used to be a highly unionized company.

However, after a change in the labor union‟s leader from one who was powerful and who held the position for a

long time to a new leader, its labor union has become weaker. In terms of collective bargaining, it occurs at the

workplace level, not at the industry level. Most of the collective bargaining issues are also similar to those at

other companies in other industries. The authors also paid their attention on homeworkers. There is a number of

homeworkers who produce handicraft weaving, such as mud-mee silk weaving, pha-yok-dok weaving, and tin-

jok weaving. These Thai traditional cloths are unique in each piece and are made by hand. The homeworkers

weave these cloths at home and sell them to the head of the weaving group at a particular company. Finally, the

products are sold in shops at premium prices, but the homeworkers are not able to attain good benefits and

financial stability. This problem might come from the lack of association among labor in this sector.

4.2.5 Finance and Banking Industry

The changes in the finance and banking industry are related more to the financial liberalization of the industry.

Financial liberalization will allow large universal banks to enter all aspects of the financial businesses, and it will

put pressure on domestically owned and state-owned banks in Thailand. Some domestically owned banks

attempted to find strategic foreign partners to be able to compete with other foreign-owned banks. At the same

time, some state-owned banks merged with foreign strategic partners and changed their status from state-owned

banks to foreign-owned banks. In this study, the authors selected Bangkok Bank Workers Union as a model of a

state-owned bank and Thai Farmers Bank Labour Union as a model of a private-owned bank. The Bangkok

Bank Workers Union is one of the oldest labor unions in Thailand. The president of Bangkok Bank Workers

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Union is also well known for having working knowledge and experience in labor relations. The president told

the authors that the attitudes of the union leader and the union members are very important. In the past, the goal

of the labor union was to protect the rights of union members from unfair treatment. Currently, the collective

bargaining issues often deal with the wage level, bonuses, and other benefits. Due to the characterization of the

banking business, which consists of a number of small branches, the unity of the labor union is important. In

terms of labor relation and human resource practices, most banks tend to apply functional flexibility in the

management of human resources, especially with respect to multi-skills. Workers are not satisfied with this

condition because they need to go beyond the roles and responsibilities previously specified for their job.

However, employers believe that functional flexibility will help promote the potential of their workers and that it

benefits the organization as a whole, especially during economic crises. Labor unions at banks are separated

between the union for junior officers and the union for executives. Collective bargaining in the industry is

decentralized at the workplace level. Interestingly, in the case of the Thai Farmers Bank Labor Union, both the

union for junior officers and the union for executives come together to negotiate with the employers. Issues with

respect to collective bargaining are often about wages, salaries, wage and salary increases, bonuses, and other

employment conditions, such as numerical and functional flexibility. Several labor unions within the finance and

banking industry associated together to form the Federation of Bank and Financial Worker‟s Union of Thailand

to strengthen the status of its labor unions and increase the well-being of workers in the finance and banking

industry. The authors met two of the founders of the Thai Farmers Bank Labor Union and found that the number

of members who think of leaving the labor union is high due to feelings of disenchantment with the labor union.

The president‟s concern is for the communication between the union committee and the union members. If the

union members do not understand the roles and activities of the labor union, they may decide to leave the labor

union. The unity of the labor union would then decrease. Another concern is the multi-skills task. Thus, the

workers have to work hard, and they do not have time to focus on labor activities. Finally, they do not realize the

importance of being members of the labor union.

4.2.6 State Enterprises

State enterprises play an important role in the economic development of Thailand in various ways, namely,

providing public services to Thai people, such as electricity, water supply, and transportation, generating value-

added features to products, and employing a large number of workers. Recently, privatization has become

another important issue facing state enterprises in Thailand. Some state enterprises have already been privatized,

such as PTT Plc. Some are in the process of being privatized. However, many parties disagree with the

privatization of some state enterprises, especially those relevant to public utilities, such as electricity and the

water supply. In terms of labor relations and human resource practices, state enterprises must follow the State

Enterprise Labor Relations Act B.E. 2543.

Thus, this case is different from the case of private companies in the five industries mentioned above that need to

follow the Labor Relations Act B.E. 2518. State enterprise unions tend to have a strong influence on their

management and the government, and they are considered to be the most powerful unions in Thailand (Levine,

1997). Under the State Enterprise Labor Relations Act B.E. 2543, at least 10 state enterprise labor unions can

form a state enterprise labor federation. However, the state enterprise labor federation can be a member of the

private sector labor union council or congress. In addition, a state enterprise can have only one union. The

collective bargaining normally occurs at the workplace level. Most of the issues concerning collective bargaining

are about wages, salaries, wage or salary increases, and privatization. Given that the state enterprises are defined

as “important businesses”, strikes are not permitted. The State Enterprise Relations Committee handles all labor

disputes.

4.3 Labor Relations and Collective Bargaining Issues at the Workplace Level

Firstly, we have found that the labor–management relations in most companies in Thailand, especially in small-

sized companies, which are the majority of enterprises in Thailand, are still considered paternalistic

(http://www.pacificbridge.com/publication.asp?id=4; Levine, 1997). Workers often do not know their own

rights, or they may mistrust the power of labor unions or fear losing their jobs and thus do not set up or are

reluctant to join labor unions. Thus, the unionization rate in Thailand is still very low.

In addition, most of the labor unions in Thailand are still micro-focused because they are mostly plant or house

unions (Chew & Chew, 2006). Unions are only concerned about issues regarding wages, salaries, and/or bonuses

among their members within the companies. Union leaders are mostly concerned about their individual benefits,

not public benefits. They do not concern themselves with the unity of the Thai labor movement or the country.

They sometimes set up labor unions to serve their own purposes. Thus, unions at the workplace level in Thailand

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are still weak, divided, and fragmented. Most collective bargaining in Thailand occurs at the workplace level

instead of at the national or industry level, and most of the collective bargaining incurred is not authentic

collective bargaining because it is under the autocratic management of Thai employers (Levine, 1997). The

collective bargaining issues are mostly related to wages, salaries, wage or salary increases, and bonuses. Only

the issue of the minimum wage concerns collective bargaining at the national level (or the National Tripartite

Wage Committee).

Moreover, the attempt to support labor unions in Thailand as powerful and stable organizations representing

Thai labor as a whole has not been successful due to the fact that members of most labor unions in Thailand still

lack enthusiasm and have no time to participate in labor union activities (Chandravithun, 2001;

Thanachaisetthavut, 1996). Cultural factors are pertinent in explaining this phenomenon. Most Thai individuals

are not energetic or enthusiastic about participating in activities that do not pertain to their own struggles. Most

Thai workers think about labor unions only when they personally face labor issues and believe that labor unions

can help them overcome these issues. In contrast, if their working lives are running smoothly and they have

encountered no obstacles, they will never think about labor unions. Most prefer to be followers instead of leaders

in demanding their rights and benefits from their employers. They are afraid of expressing their real opinions and

beliefs to others. They believe in the status differences between employers and workers. They attempt to avoid

challenging their employers because they believe that any aggressive action may lead to issues such as dismissal

or demotion at a later time. They tend to compromise with their employers instead of confronting them. Thus,

most workers in Thailand have no commitment to strengthening the labor unions and feel no energy or

enthusiasm about participating in labor union activities (Napathorn & Chanprateep, 2011; Suthakavatin, 2005;

Hofstede, 1984). Without question, these inclinations affect the weakness of labor unions and the industrial

relations system in Thailand, as well as the failure to support labor unions in Thailand such that they can be the

true representatives of Thai workers.

Secondly, the authors have found that in several labor unions, such as the Thai Rayon Labor Union, the Bangkok

Bank Labor Union, and the Thai Carbon Black Labor Union, members of labor unions in Thailand tend to

believe in their leaders and committees instead of in the labor unions themselves. They believe that a specific

labor union leader will be able to help the labor union fulfill its goals. Thus, if the union leader changes, this

change may affect the confidence of the union‟s members. Some members will lose confidence in the labor

unions and resign, such that a new labor union leader will need to work hard to regain the confidence of the

union‟s members. It may take several years for him or her to do so.

Not surprisingly, many leading and powerful labor union leaders hold positions as presidents of labor unions in

Thailand for a long time (Thanachaisetthavut, 1996). Some presidents of labor unions in Thailand hold these

positions for over 30 years (see Table 7) because their members strongly believe in these people as their

representatives within the workplace. That is, the strength and power of several leading labor unions in Thailand

is partially the result of their leaders. These leaders accumulate knowledge, skill, and experience in the labor

movement in Thailand. Most of them possess strong negotiation skills, knowledge of labor law, and the ability to

apply negotiation tactics to achieve win-win solutions and gain the support and confidence of their members.

Research has suggested that there are several factors supporting the success of labor unions in many countries in

the world, including Thailand, such as the number of labor union members, the characteristics of the labor union

leaders, financial freedom and full-time labor union officers (Metochi, 2002; Chandravithun, 2001; Kelloway &

Barling, 1993; Thacker et al., 1990; Kuruvilla & Fiorito, 1984; Gordon et al., 1980). Labor union leaders should

pay attention to general interests instead of individual interests (Chandravithun, 2001) to support the labor

unions as powerful organizations responsible for protecting workers. In addition to labor union leaders, labor

union committees are also crucial to the strength and power of labor unions in Thailand (Thanachaisetthavut,

1996). If the labor union leaders and committees pay attention to their individual interests instead of general

interests, labor union members will lose faith in the labor union as the organization responsible for protecting

their interests within the workplace. Members may believe that the leaders and committee may corrupt the union

and spend the labor union‟s money in an inappropriate way. Members will resign and sometimes attack the labor

unions, using methods such as leaflets to persuade other workers to resign or convince new workers that they

should not be union members. Some labor unions in Thailand have found that over 30% of their members resign

from labor unions due to their lack of confidence in the labor union leaders and committees. They have also

discovered that it is difficult to regain lost confidence in the labor unions. Thus, it is important for labor unions

in Thailand to find ways to help union members pay attention to union missions, policies, and goals so that they

will have trust in the labor unions themselves, not simply in the labor union leaders. As a result, it is important

that labor unions further their missions, policies, and goals in the long term, even when their leadership changes.

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Finally, we have found that one of the most significant reasons for the weaknesses of most labor unions in

Thailand is the unions‟ financial structures. Research has suggested that the financial resources and properties of

labor unions play an important role in the strengths and weaknesses of the labor unions themselves (Napathorn

& Chanprateep, 2011; Chandravithun, 2001; Miller and Form, 1951; 1964; 1980). Often, the main sources of

income for most labor unions in Thailand are entrance fees and dues. Entrance fees are collected from members

only once, and dues are normally collected from members every month. However, the dues that the labor unions

collect from their members are rather low (Thanachaisetthavut, 1994; Thanachaisetthavut, 1996; Suthakavatin,

2005). We have found that the dues that each member pays to the labor unions mostly range from 50 to 150 Baht

per month. If the number of labor union members is high (more than 10000 members), as is the case with the

labor unions that are associated with state enterprises such as the Electricity Generating Authority of Thailand

Labor Union or the TOT Labor Union, as well as the labor unions for some multinational corporations (MNCs)

such as the Toyota Thailand Workers‟ Union or the Honda Workers‟ Union of Thailand, then the monthly dues

that the labor unions collect from their members are rather high, and these labor unions have sufficient funds to

pay to improve their efficiency and effectiveness and arrange any activities that will foster their strength and

promote positive labor-management relations within the workplace. However, most of the labor unions in the

country are house, plant, company or enterprise unions, for which the number of members is limited to the size

of the company or enterprise in question (Willawan, 2007). That is, the number of members of most labor unions

in Thailand is rather low, and some labor unions comprise fewer than 100 members or even just 20–30 members

(Chandravithun, 2001). Hence, it is impossible for the labor unions to collect a large amount of dues from

members to strengthen their efficiency and effectiveness, and this is one of the reasons why most of the labor

unions in Thailand are weak. Most of the members of Thai labor unions are low-skilled laborers who feel that

dues of 50–150 Baht per month should be sufficient, and it is difficult to increase the dues that labor unions

collect from their members. Thus, most labor unions have a poor financial status and cannot spend a large

amount of money to strengthen the roles of unions and arrange activities that foster labor-management relations.

5. CONCLUSIONS

This paper provides a better understanding of labor relations and the collective bargaining situation in Thailand

at the national, industry and workplace levels. Globalization as well as economic and financial liberalization

affects labor–management relations in Thailand with respect to various aspects, such as the application of

numerical and functional flexibility, which leads to mass layoffs, lower job security, and more confrontational

collective bargaining between employers and workers during the recent economic crisis, and the roles of mass

media, which broadcasts several cases in Thailand regarding unfair labor practices to people across the globe. In

addition, some issues in this paper, such as the fragmentation and lack of solidarity among labor organizations in

Thailand, have been considered as facts and situations existing in Thailand over time and have been mentioned

by several Thai and international scholars.

This research has some practical implications for the government and other scholars as well as any interested

parties. The government and any relevant parties should pay more attention to labor–management relations and

collective bargaining issues in Thailand and implement national policies, industrial policies, and workplace

policies to solve problems and foster a positive relationship between the employers and workers, especially

because workers are one of the important mechanisms driving the Thai economy and the nation as a whole. This

will help promote sustainable development within the country. With respect to the scholars in the field and any

interested parties, this paper will help them conduct further research in the field of labor relations and collective

bargaining in Thailand in the future.

6. ACKNOWLEDGMENTS

This work was supported in part by Faculty of Commerce and Accountancy, Thammasat University through

Business Research Center Grant (Mini Research Grant FY 2009).

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ic_no= 398&page=1&gaction=on

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case study of the electronics industry in Thailand. Retrieved February 20, 2011, from

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http://www.vitalstarclub.com/index.php? mo=14&newsid= 179908

62. Willawan, K. (2007). Labour relations. Bangkok: Winyuchon Press.

Table 1 Number of Labor Organisations in the Years 2007 and 2009

Labor Organization 2007 2009 No. of members

Employer Organization

Employers Associations 405 368 -

Employers Association Federation 2 2 -

Employers Councils 12 12 -

Employee Organization

Labor Union (Private Enterprise) 1,229 1,235 341,520

Public Enterprise Labor Union 43 44 175,000

Labor Union Federation (Public Enterprise) 16 18 -

Public Enterprise Labor Union Federation - 2 -

Labor Union Council 11 12 -

Source: Department of Labour Protection and Welfare (http://www.labour.go.th/webimage/images/load

/file/breefRelat51.pdf)

Table 2 Number of Enterprises and Employees in Thailand Classified by Business Size as of December 2008

Size of Enterprises Number of Enterprises Number of Employees

<10 persons 268,084 938,558

10-49 persons 87,547 1,777,378

50-199 persons 19,640 1,873,721

200-999 persons 6,130 2,448,295

> 1,000 persons 769 1,741,179

Total 382,170 8,779,131

Source: Adapted from Labour Situation Report (Translated from Thai Title) Prepared by Ministry of Labour

Interdisciplinary Journal of Research in Business Vol. 1, Issue. 6, June 2011(pp.66-81)

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Table 3 Structure of Thai Labor Force

Number of Labor Force GDP Per Capita (Baht/Year) Change

2009 (‘000) 1998 2009 (%)

Agriculture 14,693 37,189 71,612 92.6

Industry 5,374 354,718 630,359 77.7

Electricity, Gas & Water 102 825,368 2,807,807 240.2

Construction 2,303 109,592 105,989 (3.3)

Wholesale & Retail 6,048 188,643 211,591 12.2

Hotel & Restaurant 2,593 144,488 169,105 17.0

Transportation & Communication 1,141 365,961 569,340 55.6

Financial Institution 375 781,937 977,584 25.0

Real Estate 744 358,311 285,929 (20.2)

Public Administration & Defense 1,349 189,074 316,625 67.5

Education 1,133 193,186 346,860 79.5

Public Health 699 218,309 252,724 15.8

Others 1,154 84,835 115,390 36.0

Total 37,706 153,680 239,950 56.1

Source: Calculated by Phatra Securities Public Company Limited / Data from Office of the National Economic and Social Development Board and National Statistical Office

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Table 4 The thirteen Thai leading labor unions in six industries interviewed by the authors

Industry Labor Union Name of President or Ex-president Years in the position

Automobile industry Toyota Thailand Workers‟ Union Mr. Bhupan Samatha < 5 years

Honda Workers‟ Union of Thailand Mr. Uthai Luangthong 10 years

Isuzu Engine and Parts Worker‟s Union Mr. Wanwin Wangsirisakul 10 years

Petroleum and Chemical Industry Thai Bridgestone Labour Union Mr. Boonleat Carbutdee 12 years

Thai Carbon Black Labour Union Mr. Suphoj Jaruwanbumrong 19 years

Food and Beverages Industry Siam Foods Labour Union Mr. Tosaporn Kumtako 10 years

Foremost Thailand Workers Union Mr. Prayong Em-oat 15 years

Garment and Textile Industry Thai Rayon Labour Union Mr. Sripo Wayuphak 31 years

Teijin Polyesters Workers Union Mr. Sompong Khamnil 10 years

Finance and Banking Industry Bangkok Bank Workers Union Mr. Chaiyasit Suksomboon 30 years

Thai Farmers Bank Labour Union Mr. Suphoj Jaruwanbumrong 16 years

State Enterprises The Labour Union of EGAT of Thailand Mr. Sirichat Maignam 7 years

TOT Workers‟ Union Mr. Phongthiti Pongsilamanee < 5 years