Unemployment fears on the rise

Unemployment fears on the rise

Economic slump hurting workers, writes Penchan Charoensuthipan

Former employees representing more than a thousand workers laid off by the Pongpara Codan Rubber and Mizuno Plastic companies submit a petition at the Labour Ministry on Friday complaining of unfair treatment. (Photos by Somchai Poomlard)
Former employees representing more than a thousand workers laid off by the Pongpara Codan Rubber and Mizuno Plastic companies submit a petition at the Labour Ministry on Friday complaining of unfair treatment. (Photos by Somchai Poomlard)

Labour rights advocates have questioned the government's claim of more businesses opening shop as opposed to closing down, insisting that new companies may not be hiring as many workers as expected.

Prime Minister Prayut Chan-o-cha earlier countered concerns about a stagnant economy saying that more than 2,000 companies were ready to do business, which exceeds the 1,686 factories which went under this year.

The former employees bring documents to support their complaint.

Chalee Loysung, the chairman of the Thai Labour Reconciliation Committee (TLRC), said on Friday that there was no credible information regarding where the new businesses have been established or whether they were recruiting workers or not.

This is despite figures released by the Department of Labour Protection and Welfare (DLPW), which stated that 3,219 new firms applied to open business between Jan 1 and Dec 25.

Mr Chalee said that some new companies may have registered as part of the massive Eastern Economic Corridor (EEC) project. However, there has been no confirmation of whether the businesses were employing Thai workers in substantial numbers.

For instance, Chinese businesses setting up in the EEC do not plan to hire local workers as they are likely to introduce machines in their operations.

"The critical question is what are we going to do with more and more people losing their jobs," he said.

The economic slowdown is forecast to continue into next year. "What is the government doing to help struggling businesses and the vast number of unemployed?" he added.

According to the DLPW, the three industries most affected by closures this year are agro, metal producers, and vehicle and parts manufacturers.

Mr Chalee said the government should prioritise the assistance it gives to ailing companies, judging from the drops in orders from customers and the number of workers being laid-off.

These businesses must be classified as those with the potential to survive or those that are unsalvageable, he added.

The authorities must also see to it that companies provide fair compensation to workers they lay off.

Manas Kosol, the chairman of the Employees' Labour Development Council, has predicted that 2020 will be another tough year for businesses.

Those most at risk of becoming unemployed are workers of companies which request invocation of Section 75 of the labour law. The section permits firms to suspend operations due to a liquidity crunch although they must carry on paying their workers at least 75% of their wages.

"The government needs to come up with measures to cushion risk for these workers," he said.

Meanwhile, Ms Apinya has denied that there has been a significant rise in the number of laid-off workers this year. Of the 174,082 unemployed workers this year, only 27,859 were made redundant while 126,384 resigned and 19,839 were out of work because their employment contracts had expired.

She said that employment next year is likely to improve as the national budget is on course to being disbursed which would spur the economy through development and stimulus projects, leading to job creation.

This month alone, three large companies have reportedly announced their closures, leaving at least 1,200 workers out of jobs.

The three companies are Seishin Co in Chon Buri which manufactures automotive spare parts, Mizuno Plastic Co in Ayutthaya and Pongpara Codan Rubber Co in Samut Sakhon, according to DLPW director-general Apinya Sujarittanont.

Mizuno shut down on Dec 19, Seishin on Dec 21 and Pongpara on Dec 23.

Seishin has distributed severance pay to 13 workers while 50 are still waiting for the payments. Mizuno employed 32 workers while Pongpara had 997 workers, 299 of whom have received compensation, Ms Apinya said.

She said that the department was looking into claims that some companies closed down only to reopen later in the hope of dismantling the labour union in the old company.

Ms Apinya said if this was true, the companies would be in breach of ethics and damage their corporate credibility.

In the meantime, Mr Manas said that dumping a company to get rid of unions would be easier said than done because the law attaches importance to workers' rights. Moreover, workers of the new firm can also form a new union.

Labour unions are useful for negotiations between employers and workers

Ae (surname not given), who has worked for Pongpara for more than 20 years, said he and his wife, who was also an employee at the company did not expect the firm to close for good.

"There were no warnings, no signs," Ae said. The workers felt quite secure because the firm always had enough money to pay workers three months worth of bonus around Chinese New Year every year.

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