The electronic parts and component manufacturing industry has started in Thailand since 1972. The investment in this sector was promoted by the Thai government via trade privileges granted to investors by the Board of Investment. The exemption from duties on imported machines and components as well as the low wage rate have attracted increasing foreign investment into this economic sector of the country. The production is mostly based on assembling the imported components for export to overseas markets or for supplying either their mother or main buying companies abroad.
The electronics component manufactured for export mainly include power supply cord and computer peripheral equipments, semiconductors, printed circuit boards, transformators and adapters, power cords, cable and wire, spindle motors etc,. el electrical
It is estimated that there are around 800 manufacturers of electronic appliances and components in Thailand, with the capital investment accounting estimately to 300,000 million baht .The industry has also been employing a large number of employees namely altogether around 520,000 workers. The rapid inflow of foreign capital investment has made electronics an increasingly important contributor to the Thai economy, in terms of manufacturing value added, exports, and employment. Indeed, "computers and parts" constituted the largest category of Thai manufactured exports. The total export value of electronic products has recently been the highest of all industries, and has been growing all the time e.g. from the total export value of 319,127.2 million baht in 2002 to 339,939.4 million baht and 373,649 million baht in 2003 and 2004, growing from 6.5% to 9.9 % respectively.
Hard disk drive is the electronic product which is highly significant for the export sector of Thailand, with the total export value of 200,000 million baht per year. In fact, Thailand is the world’s second largest producer of hard disk drives after Singapore. The disk drive industry is now one of Thailand's major exporters.. Hard drive production is a significant part of the country's overall electronics industry. Its production accounted for 17% of the electronics industry in 2003 and was expected to rise to 31% in 2004. Based on figures cited above, disk drives constituted a significant portion of Thailand's electronics exports. This is because the country contains clusters of big multinational firms producing large volumes of drive assemblies, head-related products, and spindle motors. Of the 12 manufacturers all over the world, four out of five world largest manufacturers of hard disk drive have their plants in Thailand. They are Fujitsu, IBM/Hitachi, Western Digital (WD) and Seagate.
Essential Labour Issues in the Electronics Industry.
Due to the fact that the basic wage, which is only 175-200 baht per day, is insufficient to meet the basic needs of a family as it is lower than the cost of living , workers are forced to accept long hours of overtime work in order to earn enough income to feed themselves and their families. Yearly increments are also based on workers’ performance ranked in three different grades of ABC. The workers’ performance is appraised according to their time devoted to work and their cooperation given to the company. Such measure is the way to mobilize workers to contribute as much as possible to the company’s workload to meet their deadlines. Working time is divided into three shifts in a month. Workers are all the time subjected to change of workshifts and suffer from having to adjust to different working times. Nightshifts start at mid-night and end at 8.00 a.m. Workers earn very little extra money for night time working. The shift benefits account to only 30-50 baht. Basic welfare is supposed to be provided generally as prescribed by the Labour Law. Working clothes and transportation are also provided for workers. Annual recreation activities are organised for workers as well. Bonus of 10-15 working days is also paid as an incentive for workers to cooperate with the management and devote themselves fully to the companies’ workload to meet deadlines.
2. Contracted Labour
Many companies tend to keep only a number of employees on permanent contracts. They must normally be longer in service with more experience than others. The ongoing trend is to let the job placement agencies or recruitment companies or labour suppliers hire workers for them. The wage for these contracted workers is not paid directly to the contracted worker, but to the recruitment companies who keep a part of the workers’wage for themselves. For example, if the recruitment firm gets 250 baht per worker they supply to the manufacturer, they will pay the worker only 175 baht, the rate which is prescribed by the labour law.
In electronic plants, there are thus two kinds of workers i.e. workers on a permanent contract who are employed directly by the manufacturing company, and the contracted workers who are hired on a short term basis by the contractors or sub-contractors who supply them to the manufacturing plants . The contractors earn a nice commission from the wage they get per head of worker they suppplied, while the contracted workers are placed at a disadvantaged position. The situation is that there are two groups of workers who are employed to do the same work but have unequal rights and benefits.
Letting the recruitment agencies supply workers to the manufacturing companies allows the manufacturers to cut cost and deny responsibility to comply with the collective agreements and the labour law.
Generally, contracted workers are not paid due social welfare and employment benefits e.g.they do not get any paid leave, annual bonus ,wage adjustment or increment as enjoyed by regular workers. Moreover, without job security, they are in a vunerable position. As they are hired on a temporary basis, they can be dismissed easily any time. Such hiring system is not different from the use of slave labour in those days, as workers are indirectly forced to work under very unfair conditions. It is thus a clear violation of human rights. Hiring contracted labour to do the same work as the regular worker has also weakened trade unions. The issue has developed into a labour dispute in several firms and ended up with the firm’s recruitment of an even increasing number of contracted labour for its production. As a consequence, more regular workers and especially those who are members of the trade union have lost their jobs and become unemployed. Under this situation, trade unions increasingly find it difficult to survive. Employment via contractors has become a priority issue of campaign by the labour movement for its legal prohibition.
As the electronics industry is normally based on cheap labour, it tends to be in the process of outsourcing which goes hand in hand with relocation to low wage economies. Wage rates have provided incentives for companies looking for a “lower cost” location and a competitive advantage. As a result, a large number of workers have been laid-off, in many cases without severence payment as prescribed by the labour law. The laid-off workers have found it dificult to find new employment as most companies prefer to recruit mainly young workers.
Employers tend to pursue the policy of preventing workers from organising into a trade union. A Joint Consultation Committee in a workplace is the employer’s preference. Therefore, workers’ committees like the “ Welfare Committee” or the “Joint Consultative Committee” are promoted by the employer instead. It can be said that the workers’ rights of organisation and collective bargaining have not yet been effectively recognised in the electronics industry. This can be seen from the fact that there are very few unions in this sector. Quite a number of unions among these few are often the unions which the employer back up or the unions which are not active in promoting the rights and benefits of workers. Real efforts by workers in this direction have been blocked in time by companies to prevent the rise of a trade union in their respective firms. Employers are usually unrelenting in their efforts to anticipate and forstall workers’ genuine collective action. While the enforcement of the labour laws is still not effective and workers are not securely protected , most workers are thus afraid to organise into a union for fear of being kicked out.
Basing on the above- cited reasons, it can be seen that setting up more trade unions in the electronics industry and strenghtening them in the struggle for their due freedom and rights and for improvement of workers’ standards of living are the priority tasks of a trade union movement. To create sufficient workers’ bargaining power, coordination and networking at all levels to establish an international solidarity is necessary. The international campaign for the adoption and proper application of the firms’ code of conduct as well as the establishment of an effective monitoring mechanisim is a crucial step of the labour movement, at least in order to secure the protection of labour rights.
Provided by
Somyot Pruksakasemsuk
Center for Labour Information Service and training
166/23 Nattangan 3 paholyothin 52 Klongtanon Saimai Bangkok 10220 Thailand Tel 66+2+9727035 66+1+8229477
Email : clist@loxinfo.co.th