Labour disputes to surge as businesses slash more jobs

EMPLOYMENT CRISIS

The Labour Court is expecting to handle more than two-thirds as many disputes from retrenched workers this year as the economic crisis forces businesses to lay off staff.

Last year it dealt with more than 12,000 cases, but Central Labour Court chief judge Boon Thapanadul believes that figure will rise to at least 20,000 and more.

Mr Boon said a rise in labour disputes was inevitable during an economic downturn.

Unemployment began to rise in the middle of last year and took a turn for the worse towards the end of 2008.

Mr Boon predicted more than 20,000 labour dispute cases, with most involving demands for compensation, unpaid wages and severance pay.

In 2007, 12,240 labour dispute cases were brought to the Central Labour Court. Last year, the number of cases increased to 12,282.

Labour Minister Paitoon Kaewthong said the ministry would do its best to prevent lay-offs.

Mr Paitoon spoke during a seminar on the impact of the economic crisis on employment. Representatives from commercial banks were invited to attend the seminar at the Central Labour Court.

The minister urged banks to join the ministry's scheme to provide low-interest loans to business enterprises in a bid to delay lay-offs.

Pan Wannapinit, secretary-general to the Social Security Office (SSO), said the SSO would deposit money with commercial banks joining the loan scheme and charge an interest rate of only 1% while banks must charge businesses interest rates of not more than 5%.

Enterprises seeking loans would be required to comply with an SSO condition which expects them to delay retrenchments. The loan scheme is expected to help defer 200,000-300,000 lay-offs.

A bank representative said loan interest rates now stood at 8%. Any decision to join the scheme rested with bank executives, he said.

Although the SSO was offering deposits for only 1%, the banks joining the scheme would have to be responsible for collecting debts if firms failed to heed the SSO's condition and had to be removed from the scheme.

A source said many banks were not willing to give loans if loan applicants under the SSO scheme wanted to use the money to refinance high-interest loans.

The Labour Ministry yesterday said it would impose a regulation requiring subcontracting firms to place a sum of money as a guarantee with the state.