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Published on July 29, 2007

Experts believe the Thai Silp fiasco that saw almost 5,000 textile workers suddenly out of work stemmed from inadequate labour-safety measures and the country's "slow" response to global change.

Professor Lae Dilokvidhya-rat, director of Chulalongkorn University labour and management development centre, said: "The case reflects how poor our system of protecting labour rights is."

"It's worrisome. Workers could be out of a job without compensation, even though the law says otherwise. In the end, we're at the mercy of company-owners to dig into their pockets to pay for some of the compensation."

Unpaid workers are ranked behind other commercial creditors if compensation claims are taken to court.

Bandit Thanachaisethavut of the Arom Phongpha-ngan Labour Research Centre said industrialists, as evidenced by Thai Silp, had failed to adapt to new global trade and labour standards.

"In the past, product standards were the only requirement of importers. Now these have expanded to cover manufacturing processes. For instance, they won't buy from sources using slave or child labour."

On July 11 Thai Silp Southeast Asia Import Export of Bang Phli in Samut Prakan closed without notice. Owners claimed they were out of business because of a financial crisis triggered by the rapid appreciation of the baht.

Attempts to reopen were unsuccessful, and wages owed were paid with proceeds from the sale of company equipment and machinery.

"There has been no guarantee all workers will get compensation. We're not sure if the money will be available, even though the payment is very important to the well-being of some 5,000 workers and their families," labour activist Wilaiwan Saetia said, adding it was difficult for those over 40 to get new jobs.

Lae said legal protection was inadequate. Workers, as creditor, are ranked third in bankruptcy litigation. They get paid after banks and other creditors.

"That means there is a very small chance compensation will be paid, since the sale of assets is unlikely to generate enough money for all creditors. That's a tragedy," he said.

In the late 1980s there were plans to establish a mechanism, such as provident funds, to help labour. It was put off and overtaken by the economic crisis the following decade.

A Labour Ministry emergency fund is too small with only Bt200 million available, experts said. In principle it pays in cases where it can recoup money from employees.

Activist Wilaiwan said it was time for the country to turn to labour insurance in cases of immediate business and factory closings.

Labour Ministry permanent secretary Chuthatawat Indrasuksri warned that industry was failing to respond to global changes.

"While I still believe enterprises can adapt, some of them are just resisting the trend. We need to adopt new trade and labour standards that give more importance to safety, occupational health and labour rights. Otherwise we will lose our international competitiveness," he said.

In this context, the country should adjust its position in the global market to reduce dependence on competing in "labour-intensive" products currently dominated by lower-wage China and Vietnam.

"Yes, we should head towards more value-added, technology-based products," said Chuthatawat.

Lae said: "Today, labour training focuses on the jobless with the objective of helping them to get odd jobs. In fact, training and retraining should be expanded and should be done in conjunction with enterprise."

Bandit agreed with urgent training and retraining programmes.

Migrant workers from Burma, Laos and Cambodia largely occupy unskilled jobs, he pointed out, and as a result domestic labour is in semi-skilled and skilled jobs, but training is inadequate due to the lack of effective programmes to help industries take on global challenges.

Kamol Sukin

The Nation