Firms Go To Court Against Thai Govt Bt300-Wage Order

[webfact]

DAILY MINIMUM WAGE

Firms go to court against govt Bt300-wage order

Petchanet Pratruangkrai,

Thanongsak muennoo

The Nation

BANGKOK: -- About 42 companies from various industries have lodged a complaint with the Central Administrative Court over an official order requiring employers to raise their daily minimum wages.

The move is a lastditch attempt by 42 Thai and Japanese firms to block the big pay hike, which they believe the government has pushed for without any appropriate reason.

Their petition may affect more than 5.4 million workers who are hoping to get the higher pay from next month, according to Labour Ministry permanent secretary Somkiat Chayasriwong.

"They have claimed the order issued by the Central Wage Committee [CWC] is illegal," Somkiat said, in his capacity as the CWC chairman. "But I have already explained to the court that we have taken all relevant factors into account."

According to him, the CWC is a tripartite panel. Excluding its chairman, the panel has five representatives from employers, five representatives from employees, and four from government agencies.

"The 14 CWC members voted unanimously to raise the daily minimum wage across the country by 40 per cent," Somkiat said.

Many employers suspect that the decision came under government pressure as the ruling Pheu Thai Party made it an election policy to raise the daily minimum wage to Bt300.

With the 40percent pay hike scheduled to take effect from April 1, workers in Bangkok, Phuket, Samut Prakan, Samut Sakhon, Pathum Thani, Nakhon Pathom and Nonthaburi will earn at least Bt300 a day.

Kamol Trevibul, deputy secretarygeneral of the Electrical, Electronics and Allied Industries club under the Federation of Thai Industries, said that the industries needed a clarification from the government on the need for increasing the daily wage to Bt300 per day, as this policy was not based on fair reasoning.

"The unreasonable increase in minimum wage will prompt both foreign investors and local enterprises to relocate to other countries. Investors will have low confidence to do businesses in the country as the government has full authority to raise the wage without discussing with involved parties," Kamol said.

The petitioners against the wage hike come from various industries. Most are electronics and electricalappliances makers, who employ more than 700,000 workers in seven provinces.

Among them are Murata Electronics (Thailand), Star Polymer Corporation, L&E Manufacturing Co, Kulthorn Kirby, Kulthorn Metal Products, Kulthorn Steel, Nippon Super Precision, Racha Chu Rot and Vanda Preserved Food.

Enterprises are worried that they would face huge losses since labours efficiency have not been developed in accordance with the payment.

If the government increases the daily minimum wage in keeping with its electioncampaign pledge, Thai labour costs would soon soar, Kamol said.

"The daily minimum wage may increase to Bt500 because political parties will compete with each other to promise higher wages during election campaigns," he commented.

Somkiat yesterday told the Central Administrative Court that the government policy was just a factor in the decision to order a significant pay hike.

"The CWC has also considered cost of living, economic conditions, prices of consumer goods and the rate of inflation," he said.

Thai Labour Solidarity Committee chairman Chalee Loysoong said he disagreed with the employers' petition to the Central Administrative Court.

"Workers are now struggling hard with the rising cost of living," he said.

He said if the Central Administrative Court issued an injunction putting the wage hike on hold, workers would appeal against the injunction.

If necessary, workers would also stage rallies to pressure the government to keep its promise on the Bt300 minimum daily wage, Chalee said.

-- The Nation 2012-03-16

[Buchholz]

pay hike scheduled to take effect from April 1, workers in Bangkok, Phuket, Samut Prakan, Samut Sakhon, Pathum Thani, Nakhon Pathom and Nonthaburi

While workers in 70 other provinces will have to wait as late as 2015 before Yingluck's 2010 promise is delivered to them.

Protesters rally to pressure the government to honour the Pheu Thai Party's campaign promises of a Bt300 minimum wage for labourers and a Bt15,000 monthly wage for recent graduates. They carry party campaign posters featuring pictures of PM Yingluck Shinawatra promoting the policies.

The Nation / 2011-10-08

[pipo1000]

Enterprises are worried that they would face huge losses since labours efficiency have not been developed in accordance with the payment.

The true statement and the biggest problem in this country.

[Pib]

It costs money (for someone) to get elected.

[chrisinth]

Massive problem, I am just surprised that the companies lodging the complaint have left it so late.

In an ideal world, it would be great for all workers to be paid more and improve their quality of life (even if only a little), but the reality to that runs much deeper, especially when the pay rise is almost double what an average labourer is receiving now. I understand that this is not all cases, but for sure some.

The increase will mean product price increases in an already extremely competitive market as the company owners will have to find the monies to cover the wages.

And all this based on a political promise!

"The daily minimum wage may increase to Bt500 because political parties will compete with each other to promise higher wages during election campaigns," he commented.

That is a very astute observation.

[belg]

fake promises to win an election might hurt the economy badly, but hey, at least the thaksin family is getting their beloved money and brother back, that is the most important agenda anyway

[givenall]

They are cutting it very close. Why they waited to do this last min?

[uenjoymaiself]

Relative wages is the real story here. In an organization where the lowest worker gets 9000/m, every other worker relative to that baseline will demand higher pay. It will mean pay increases across the board which will in turn drive up the cost of labor significantly. Expect higher prices, especially in service, in the near future. Living in Thailand couldn't stay cheap forever! Sigh.

[bangkockney]

Only 42 companies have joined the law suit, says it all really.

And complaints about no increase in efficiency in the labour market? Again the companies' fault - must invest in training for their staff not expect the state to do it for them.

[OzMick]

Relative wages is the real story here. In an organization where the lowest worker gets 9000/m, every other worker relative to that baseline will demand higher pay. It will mean pay increases across the board which will in turn drive up the cost of labor significantly. Expect higher prices, especially in service, in the near future. Living in Thailand couldn't stay cheap forever! Sigh.

Don't panic! The natural effect of the rise will be an inflationary spiral and devaluation of the baht, and just like magic, we are back where we started. Markets naturally respond to artificial intervention so as to nullify the changes.

[OzMick]

Only 42 companies have joined the law suit, says it all really.

And complaints about no increase in efficiency in the labour market? Again the companies' fault - must invest in training for their staff not expect the state to do it for them.

Just what training do you give the sweeper, the shoveller or the driver to increase his/her productivity by 40%.?

[Thai at Heart]

I presume they will proteat the corporate tax cut. Bizarre case

[anterian]

I expect to see increased sales of Chang and Leo.

[FangFerang]

Its a delaying tactic from the companies. If 5.4 million are actually affected, then they will have a combined savings of over 500 million baht a day. I would appeal and appeal and appeal when faced with an inevitable expense, which is what is being done. I think that is the reason for the timing.

Not good or bad to me, except the upcoming price increases.

I don't have an opinion on this one, just an observation.

[rotary]

This raise in minimum wage will cost many folks their jobs and do more harm than good.

[Thai at Heart]

How does it happen that they can challenge it? Perversely this would mean all 5mn workers can sue back? How does a company challenge this type of LAW.

[Thaddeus]

This raise in minimum wage will cost many folks their jobs and do more harm than good.

As I said in a different thread, once the government dabbles with the basic economic principles of companies that it doesn't own, you get a train wreck.

[Rosco911]

I presume they will proteat the corporate tax cut. Bizarre case

There is no tax for BOI companies for 7 years. The wage rise will force companies to close or move, simple.

[Rosco911]

This raise in minimum wage will cost many folks their jobs and do more harm than good.

Very true, our company has already cut staff to the minimum required to allow the foreign investors to stay in Thailand.

[WackySomchai]

The fugitive thinks, his puppets act. While normal people suffer the Puea Thaksin party and their cronies are laughing all the way to the bank.

[bigbamboo]

Only 42 companies have joined the law suit, says it all really.

And complaints about no increase in efficiency in the labour market? Again the companies' fault - must invest in training for their staff not expect the state to do it for them.

Just what training do you give the sweeper, the shoveller or the driver to increase his/her productivity by 40%.?

Teach him the techniques required to use a bigger broom or maybe just insist on shorter naps.

Edited March 16, 2012 by bigbamboo

[Thaddeus]

Only 42 companies have joined the law suit, says it all really.

Law suits cost money.

Many smaller companies will either not adhere to it, downsize, relocate or close down completely.

[OzMick]

Only 42 companies have joined the law suit, says it all really.

And complaints about no increase in efficiency in the labour market? Again the companies' fault - must invest in training for their staff not expect the state to do it for them.

Just what training do you give the sweeper, the shoveller or the driver to increase his/her productivity by 40%.?

Teach him the techniques required to use a bigger broom or maybe just insist on shorter naps.

I thought of a strap-on device that sends an electric shock when stationary for a minute.

[hyperdimension]

The fugitive thinks, his puppets act. While normal people suffer the Puea Thaksin party and their cronies are laughing all the way to the bank.

Before announcing them as election promises, I am certain that the Shinawatra clan made their calculations such that their businesses (e.g. SC Asset) will benefit overall from all the big changes. e.g. the extra savings that they make from the lowered corporate tax rate is probably immense compared to the extra labor expenses. I can't imagine this government making decisions that cause net losses to the Shinawatra clan's businesses.

[edwinchester]

Only 42 companies have joined the law suit, says it all really.

Law suits cost money.

Many smaller companies will either not adhere to it, downsize, relocate or close down completely.

Agree entirely. My Thai wifes aunt runs a small restaurant. Her staff get 150 bht a day. When I asked her when they will get 300 she laughed out loud. She actually said they either stay at 150 bht or half of them go as there was no way she can afford to pay more.

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[tlansford]

I scratch my head in dismay watching people rant against the idea of someone making 300B / day as a minimum wage.

[whybother]

I scratch my head in dismay watching people rant against the idea of someone making 300B / day as a minimum wage.

The problem isn't that they're getting 300 baht. It's simply not economical to increase it by so much so quickly.

[WackySomchai]

I scratch my head in dismay watching people rant against the idea of someone making 300B / day as a minimum wage.

The Puea Thaksin government is doing more than scratching their heads. This is just another election promise they deeply regret and trying to find ways to back-track from ...

[tlansford]

I scratch my head in dismay watching people rant against the idea of someone making 300B / day as a minimum wage.

The problem isn't that they're getting 300 baht. It's simply not economical to increase it by so much so quickly.

I respect your opinion, and your post is not part of the ranting from the first page, either.

As for the timing, both campaigns promised to raise the minimum wage, so businesses have known this was coming for almost a year.

Additionally, it is not everywhere at one time (other posters point to that as "breaking" a campaign promise... )

And not all companies are affected, but all get a lower corporate tax rate. Looks to me like they got a pretty good deal.

People are worried about companies relocating from Thailand because of the raised minimum wage, but Toshiba recently confirmed they will stay in Thailand (flood-related announcement) and mentioned that the minimum wage did not affect them.

Then there is the CEO of the food processing company, which will be affected by the increase, who not only supported the new rate, but offered his opinion that the minimum wage could be higher.

[Thaddeus]

I scratch my head in dismay

Good, it's probably the only exercise your head gets.