Conflict hurts FTI's standing

The reputation of the Federation of Thai Industries (FTI) has taken a serious beating as a result of a power struggle between two factions fighting for the chairmanship following conflict over the 300-baht minimum wage, which takes effect nationwide as of Jan 1.

The incident on Monday at Queen Sirikit National Convention Centre, which saw 182 FTI committee members holding a meeting on the staircase outside a meeting room after incumbent chairman Payungsak Chartsutthipol ordered the meeting postponed indefinitely over the weekend, was indeed an embarrassment. Some 139 members of the rebel group voted to unseat Mr Payungsak, who they accuse of failing to convince the government to delay the enforcement of the new wage rate until 2015. Concurrently, the group also chose former FTI chairman Santi Vilassakdanont to replace Mr Payungsak. The latter, however, refused to step aside, creating a ridiculous and messy situation for the powerful private sector organisation.

How this disgraceful saga will unfold is anybody's guess. A compromise solution seems to be out of the question now or in the foreseeable future as both sides remain adamant on their standpoints. But it should be borne in mind that the longer the conflict drags on, the greater the damage will be to the FTI and its 7,500 corporate members.

Here's something for the opponents of Mr Payungsak to consider: How can they expect the FTI under their new chairman to be able to persuade the government to delay the enforcement of the minimum wage while their organisation itself is split and there may be a legal problem about whether Mr Payungsak or Mr Santi is the legitimate chairman? The likelihood is that they will be told by the government that they should put their house in order first before the talks.

But back to the crucial issue of the minimum wage. The 300-baht wage appears to be a big deal for the FTI, and especially for the small- and medium-sized enterprises claiming that the new wage will put many of them out of business, or at least force them to lay off many employees and replace them with machinery.

But from the workers' point of view, earning 300 baht a day is not a huge amount but just enough to perhaps feed one mouth without any savings at all, let alone feed a family of three given the current prices of food, rent and so on. In practical terms, an employee who earns 300 baht a day has no future prospects.

Although the new wage rate has been branded a populist move by the Pheu Thai Party to garner working class support, the wage hike is justified as workers should be entitled to better pay and a better life, albeit a humble one. Further delaying the new wage would be unfair to workers.

As a matter of fact, workers have always been at the mercy of their employers, many of who are often not above using dirty tricks to avoid paying a minimum wage to their employees. The Labour Ministry and labour unions have received complaints about employers suspending fringe benefits for their employees to compensate for higher minimum pay, or deducting the pay of those already receiving more than the minimum wage to pay those who are underpaid.

The FTI would be well advised not to resist the new minimum wage or to seek its delay. It should help its members, SMEs in particular, boost cost efficiency, productivity and performance of their staff. Corporate tax cuts may help ease the financial burden. And last but not least, workers should also have the right to share a portion of the fruits of economic development and prosperity.