New Wage Means Fall In Income, Workers Complain: Thailand

[Soutpeel]

It takes a highly unethical company to turn a wage hike into lower labor costs in this fashion.

Companies breaking the labor laws - such as this one - should be charged and held accountable.

Period.

Actually at this point in time the company concerned has broke no laws....it has been accused of breaking laws by its employees...

[moe666]

The usual poor management by the company, instaed of figureing out away to get more from their workers and rewarding them they alienated there work force. As someone said earlier the good ones will leave and the poor workers will stay.

The support of companies here sometime is taken to the extreme, just because it is a company many seem to think they can do no wrong in the persuit of profit. Not all companies are created equal there are some really good ones who understand people and strive to get the most from there employees, while others seem to be hell bent on making there employees 8 hours at work living hell. The failure of most companies seems to be more about management or the lack of it than there workers.

There have been many studies done over the years and wages on most ocassions is not the deciding factor of employee loyality, or motivation.

[BigJohnnyBKK]

The really stupid thing here though is that normally when a company offers performance related pay or bonuses, it means the workers....well..perform! If you take that pay principle away, they will find that the workers stop performing. What's the point of going the extra mile for an employer who takes the reward away. The company will go downhill in the longterm.

Actually I'm amazed at how little influence pay-for-performance schemes actually have on Thai worker productivity.

It seems 95% of them would like to have predictable, comfortable, low-stress friendly atmosphere rather than making even significantly more money.

More power to them, AFAIC it's a great attitude for lifestyle, but very frustrating from management's POV.

[bangkokrick]

It takes a highly unethical company to turn a wage hike into lower labor costs in this fashion.

Companies breaking the labor laws - such as this one - should be charged and held accountable.

Period.

Actually at this point in time the company concerned has broke no laws....it has been accused of breaking laws by its employees...

Agree, how can companies foreign or Thai owned break the labour laws when implementing the wishes of the current government?

[phl]

The really stupid thing here though is that normally when a company offers performance related pay or bonuses, it means the workers....well..perform! If you take that pay principle away, they will find that the workers stop performing. What's the point of going the extra mile for an employer who takes the reward away. The company will go downhill in the longterm.

Thats one way of looking at it, but there is also another.

Company was forced to increase the wages by 30%, it is company's choice then to cut the bonuses they paid.

Staff worked harder to earn the bonuses, but once got pay increase are less motivated because either way they will get that 30% more than they did before.

I am inclined to believe this is exactly what has happened, so company decided to cut all bonuses.

Bonuses paid by the company is sole decision made by the business and has nothing to do with the union or the government.

In their work agreements(i am sure), it did not have a clause that the government has the right to enforce bonuses.

[phl]

It takes a highly unethical company to turn a wage hike into lower labor costs in this fashion.

Companies breaking the labor laws - such as this one - should be charged and held accountable.

Period.

The company switched from performance-based incentives to average wage model.

We can suppose that before the minimum wage was introduced, about 50% of workers had average performance, 25% lower than average and 25% better than average.

Now everybody gets the same, the good workers are unhappy and will eventually move on, and the company is stuck with the low-performers who are now over-paid.

The OP states clearly that the company coerced the employees illegally into changing their contracts.

Basta.

By saying either sign the new contract or be out of job, what is so illegal here? Is there a law which states company must pay bonuses? if so i like to see a link to one.

Is there a law which states company can be forced to pay 30% higher salary and continue paying the same bonuses? i like to see a link for this one.

Perhaps you support another alternative, which is to fire all the staff-pay them out and employ all the new staff under new contract? or would you then be

advocating to boycott such company?

[h90]

It takes a highly unethical company to turn a wage hike into lower labor costs in this fashion.

Companies breaking the labor laws - such as this one - should be charged and held accountable.

Period.

The company switched from performance-based incentives to average wage model.

We can suppose that before the minimum wage was introduced, about 50% of workers had average performance, 25% lower than average and 25% better than average.

Now everybody gets the same, the good workers are unhappy and will eventually move on, and the company is stuck with the low-performers who are now over-paid.

no because they will fire the low-performer. Replacing the bonus for good performance with fear for being kicked out

[letitbe]

which is why the west is slowly but surely going down the drain Its called being competitive. Theirs plenty of countries with educated people and quite good infrastructure willing to work hard for less than west which is why Asia is and has caught up and overtaking the west. Thailand has had it easy for a long time for many reasons and is slowly but surely throwing away its great potential. Of course most thais wont understand its their hero's policies which will push them further down the chain. We have a really good hardworking maid who we pay well above average but even she was unhappy when we got 4 or so burmese and pay then 300 baht a day which is much less than she gets and its only day rate not permanent but no thai here was willing to do it for only 300 baht a day and we live in the sticks. Burmese work very hard for 1/2 what we pay and a lot of Thais and forang exploit that but soon they will find its burmese who have cars and houses and the rest and of course Taksin and his henchmen while most of their supporters will be driven even further into poverty.

[tlansford]

It takes a highly unethical company to turn a wage hike into lower labor costs in this fashion.

Companies breaking the labor laws - such as this one - should be charged and held accountable.

Period.

Actually at this point in time the company concerned has broke no laws....it has been accused of breaking laws by its employees...

I appreciate your role as grammar police. The correct statement, however, is that the company has not yet been found guilty of breaking any laws. Until then, it is not correct to say that they have not broken any laws at this point in time.

My point still being that if companies break the labor laws, then they should be prosecuted.

[bangkokrick]

Companies like Molnlycke Health Care will of course have consulted their lawyers before taking these steps. My thought is that they are well within the law. Their obligation is to cover a pre determined minimum wage and most foreign companies pay more than that minimum.

Edited June 12, 2012 by metisdead
: Bold font removed.

[tlansford]

- deleted -

The company switched from performance-based incentives to average wage model.

We can suppose that before the minimum wage was introduced, about 50% of workers had average performance, 25% lower than average and 25% better than average.

Now everybody gets the same, the good workers are unhappy and will eventually move on, and the company is stuck with the low-performers who are now over-paid.

The OP states clearly that the company coerced the employees illegally into changing their contracts.

Basta.

By saying either sign the new contract or be out of job, what is so illegal here? Is there a law which states company must pay bonuses? if so i like to see a link to one.

Is there a law which states company can be forced to pay 30% higher salary and continue paying the same bonuses? i like to see a link for this one.

Perhaps you support another alternative, which is to fire all the staff-pay them out and employ all the new staff under new contract? or would you then be

advocating to boycott such company?

"By saying either sign the new contract or be out of job, what is so illegal here?"

RIF - reading is fundamental :

According to Natnapas, the Labour Protection Act requires the company must have discussions with its labour union when it wants or needs to change employment conditions or reduce workers' welfare. "But the company's management has not followed the law. It has summoned the workers one by one to demand they sign the consent form," Natnapas said.

It might be a surprise to some that Thailand has worker-protection laws, but as most of TVF is not Thai, posters should be at least familiar with the basic concept.

When a company violates such laws, it is called 'illegal'.

[tlansford]

Companies like Molnlycke Health Care will of course have consulted their lawyers before taking these steps. My thought is that they are well within the law. Their obligation is to cover a pre determined minimum wage and most foreign companies pay more than that minimum.

I suspect that is a rather naive position. First, it is a huge assumption that this company had legal advice before taking the actions alleged above.

Additionally, if they did, that legal advice could have been very aggressive vis-a-vis the law : ie, what can the company attempt to do and what are the possible consequences. Often times companies purposefully break the law WRT labor, safety, or environmental issues.

[hellodolly]

The really stupid thing here though is that normally when a company offers performance related pay or bonuses, it means the workers....well..perform! If you take that pay principle away, they will find that the workers stop performing. What's the point of going the extra mile for an employer who takes the reward away. The company will go downhill in the longterm.

On the other hand they can pay it and go broke. Interesting three parties involved the worker (union) the government and the employer and the only one who dosen't get a say in what the employe makes is the employer.

[hellodolly]

"The company will go downhill in the longterm"

You have hit the nail on the head but since when do most businesses in this country look to the long term? When sales are down, raise prices to maintain profits. When sales are up, raise prices to make more, until they start down again and then raise prices again. Stick it to the employees to raise profits. I work in construction.It is very common for companies to hire people for 89 days and dump them to avoid severance pay. In the end, poor quality work and delays which cost the company money but they don't seem to care since they made a profit last month.

But you reallise that Molnycke is not a Thai company,do you?

They may be Swedish but they are acting a lot like most Thai companies, as do many foreign owned companies in this and many other Asian countries. One set of standards for their home country and another for overseas operations. You can bet they would not get away with intimidating workers into signing away their payment conditions and transferring out people who didn't sign in Seden, UK, US or where ever else they operate in the Western world.

Well I have seen unions take roll backs in Canada. If the companies had to do every thing the same here as back home they would not come here.

[hellodolly]

It takes a highly unethical company to turn a wage hike into lower labor costs in this fashion.

Companies breaking the labor laws - such as this one - should be charged and held accountable.

Period.

Actually at this point in time the company concerned has broke no laws....it has been accused of breaking laws by its employees...

I appreciate your role as grammar police. The correct statement, however, is that the company has not yet been found guilty of breaking any laws. Until then, it is not correct to say that they have not broken any laws at this point in time.

My point still being that if companies break the labor laws, then they should be prosecuted.

Using your logic if I rob a bank and the court finds me innocent I then would not have broken the law even though I did in fact rob the bank.

[DeepInTheForest]

Wow, who would have thought?....

'Government interference in business brings negative unforseen consequences'....

Thailand is not fundamentally strong enough to move away from a low wage model. The country is playing with fire now that the English speaking sleeping giant of Burma is awakening.

How novel it would be if TV posters were to occasionally moor their assertions to some kind of evidence: a link, a study, a statistic provided by a somewhat reliable agency...

If Burma’s approvals from this year are any indication, the country is slated for a number of large, high-profile investments in the extractive and power sector. Of the $20 billion, almost all of it was devoted to projects in these sectors – 58 percent for the extractive industries and 41 percent to power, mostly for a few large dams. The remaining 1 percent was in agriculture and manufacturing. Neither real estate nor hotels and tourism – nor any other sector for that matter – received any approved investments. And while the total amount of approved investments from last year was an aberration, their sectoral distribution wasn’t – over the last decade, 98.7 percent of the FDI went to the extractive and power sectors.

While last year’s heavy concentration of investment in the extractive and power sectors is normal for modern Burma, it’s significantly different from FDI worldwide. Figures from UNCTAD show that last year, only 9.6 percent of FDI was in the extractive sector and only 4.1 percent in power, yet these two sectors practically monopolized Burma’s investment approvals. Manufacturing, which accounts for almost one out of every four dollars of FDI worldwide, was only 0.3 percent of Burma’s totals, while finance, which takes one in five dollars of worldwide investment, received nothing in Burma.

.... Manufacturers, on the other hand, can invest almost anywhere they’d like, normally choosing a location that offers the lowest costs and greatest benefits – they search for comparative advantage. Countries often compete for manufacturing FDI by trying to offer the most competitive business environment, including reasonable tax and export regimes, efficient infrastructure, and a general ease of doing business. So why aren’t investors in these industries, especially those from Asian countries who don’t have investment sanctions, investing in Burma?

The answer is that Burma isn’t a competitive destination for most kinds of FDI. There are a number of problems, including poor infrastructure, high port costs, intermittent power supplies, currency convertibility issues, and a number of political obstacles to doing business. These challenges are only complicated by the recent and significant appreciation of the kyat, which has gone from around 1000k/USD to less than 700k/USD in the last year, exacerbating an already tough investment climate.

It’s fairly unlikely, then, that investment sanctions by Western countries have significantly hindered Burma’s economic development. Asian countries don’t restrict investment in Burma, yet there are almost no investments from these countries in manufacturing, real estate, or any other sector that is internationally competitive.

-- Jared Bissinger, The Diplomat, August 31, 2011

http://the-diplomat....mas-rising-fdi/

Edited June 12, 2012 by DeepInTheForest

[bangkokrick]

Companies like Molnlycke Health Care will of course have consulted their lawyers before taking these steps. My thought is that they are well within the law. Their obligation is to cover a pre determined minimum wage and most foreign companies pay more than that minimum.

I suspect that is a rather naive position. First, it is a huge assumption that this company had legal advice before taking the actions alleged above.

Additionally, if they did, that legal advice could have been very aggressive vis-a-vis the law : ie, what can the company attempt to do and what are the possible consequences. Often times companies purposefully break the law WRT labor, safety, or environmental issues.

It is you that is being naive. Most sizeable companies would consult labour lawyers before taking such a decision. In any case I doubt that they are breaking any labour laws.

[phl]

"By saying either sign the new contract or be out of job, what is so illegal here?"

RIF - reading is fundamental :

According to Natnapas, the Labour Protection Act requires the company must have discussions with its labour union when it wants or needs to change employment conditions or reduce workers' welfare. "But the company's management has not followed the law. It has summoned the workers one by one to demand they sign the consent form," Natnapas said.

It might be a surprise to some that Thailand has worker-protection laws, but as most of TVF is not Thai, posters should be at least familiar with the basic concept.

When a company violates such laws, it is called 'illegal'.

The very same strategy as in all your posts.

The keyword which you missed is "according to Natnapas" ie one man opinion or better yet a guess.

Workers welfare has not been changed, workers bonuses has been. Bonus is not part of welfare or a wage, it an incentive based extra, given at managers discretion.

It is NOT even a commission but a bonus for performance

[tlansford]

It takes a highly unethical company to turn a wage hike into lower labor costs in this fashion.

Companies breaking the labor laws - such as this one - should be charged and held accountable.

Period.

Actually at this point in time the company concerned has broke no laws....it has been accused of breaking laws by its employees...

I appreciate your role as grammar police. The correct statement, however, is that the company has not yet been found guilty of breaking any laws. Until then, it is not correct to say that they have not broken any laws at this point in time.

My point still being that if companies break the labor laws, then they should be prosecuted.

Using your logic if I rob a bank and the court finds me innocent I then would not have broken the law even though I did in fact rob the bank.

then you would not have been found not guilty of robbing the bank, correct.

That is what trials are about.

But that is all beside the point - Soutpeel is just using semantics to claim that the company has not yet broken any laws. That is incorrect. The correct statement is that the company has been accused of breaking the law and has not yet been charged & prosecuted. Soutpeels logic above is that if you robbed the bank but had not yet been convicted, then you have not yet done anything wrong. That is incorrect. It has not yet been proven that you have robbed the bank because a court has not yet rendered a verdict.

He is just stating the obvious (that the company has not been tried and convicted) in a way to make it look as though the company hasn't done anything wrong.

It is an irrelevant statement.

[tlansford]

"By saying either sign the new contract or be out of job, what is so illegal here?"

RIF - reading is fundamental :

According to Natnapas, the Labour Protection Act requires the company must have discussions with its labour union when it wants or needs to change employment conditions or reduce workers' welfare. "But the company's management has not followed the law. It has summoned the workers one by one to demand they sign the consent form," Natnapas said.

It might be a surprise to some that Thailand has worker-protection laws, but as most of TVF is not Thai, posters should be at least familiar with the basic concept.

When a company violates such laws, it is called 'illegal'.

The very same strategy as in all your posts.

The keyword which you missed is "according to Natnapas" ie one man opinion or better yet a guess.

Workers welfare has not been changed, workers bonuses has been. Bonus is not part of welfare or a wage, it an incentive based extra, given at managers discretion.

It is NOT even a commission but a bonus for performance

According the the OP it (the bonus system) is part of the workers contracts. The issue is changing the contract unlawfully.

And yes, it is just an accusation at this point. I purposefully said 'if the company has done what they are accused of, then they broke the law'.

And IMO, if companies use illegal processes to get around the minimum wage increases, then they should be prosecuted. Is that something we can agree on?

[Tanaka]

It takes a highly unethical company to turn a wage hike into lower labor costs in this fashion.

Companies breaking the labor laws - such as this one - should be charged and held accountable.

Period.

I agree with you. And this is what Molnlycke Health Care states on their website:

Code of conduct

As an international company, we have a particular duty to respect, promote, and comply with the principles of ethical and social responsibility associated with human rights, the workplace, and working conditions, not to discriminate, to maintain.

Apparently their directors in Thailand have not read this statement.

[Tanaka]

As far I have experienced, no one is ever satisfied. Every one always wants more. Owning and operating a small business in this age is fraught with difficulty.

What has your sentence to do with this thread? It is not about small businesses in Thailand. Molnlycke Health Care is a multinational company. And one that is not complying with its own stated conduct.