A new type of employment, a new pressure? On the immense number of ‘workers’ in electronics factories.

Learn about the diverse changes in the employment system in the electronics industry which employs more than half a million people, like the ‘4 days on 2 days off’ case, where although workers lost this case in court, they still speak of its impact on their incomes, families and health. Or using large numbers of student interns as if they were workers but with low wages and welfare, where some accountancy graduates clean machinery. Or employing Cambodian workers through a system of MOUs with different welfare conditions, which is one of the reasons the labour unions are weak.

Thai electronics industry progresses to a global level

The electronics products industry in Thailand, including electrical appliances, has been developing for over 5 decades. Thailand was ranked as the world’s 14th largest exporter of electronics in 2016. In the same year it exported 30% of the hard disk drives on the global market.

In 2018, the Office of Industrial Economics[1] stated that Thailand exported US$38,841.5 million worth of electronics goods , a 6.4% increase from the previous year as a result of an overall increase in the export market to Japan, China, ASEAN, European Union and the United States. The Office expects that the production and export of electronic goods in 2019 will increase by 7.5% compared to last year.

This is a picture of the might of the electronics and electronic parts industry in Thailand. In the past we have only seen data and the potential for growth in terms of profit but the “labour” that built this might has been neglected and barely seen. What are their daily lives like? Are their conditions of employment fair? Has the might of this industry supported or exploited them? We will bring you the answers through a small number of examples.

Half a million workers

Data from the Electrical and Electronics Institute[2] show that in December 2018, the electrical, electronics, electronic parts and related products industries employed a total of 753,357 workers. In the electronics and electronic parts industries alone, there are a total of 559,237 workers.

Changes in employment conditions and quality of life, low negotiating power

Overall labour conditions in the industry have seen an increase in insecure employment. Companies tend to blame serious competition in the industry for a policy of reducing investment. At the same time more automation is replacing human labour so as to be able to increase production or machinery is being sought for new products. Manufacturers are using the method of not hiring new employees to replace retired workers or changing the working system to reduce costs and working days.

Apart from this, companies seem likely to reduce the number of regular workers by instead hiring subcontract workers and interns on a continuous basis. For example, in the Work-integrated Learning (WiL) project[3], Sony Technology (Thailand) Co. Ltd. hires Cambodian workers through a Memorandum of Understanding (MOU) on Employment Cooperation[4] between the governments of the Kingdom of Thailand and the Kingdom of Cambodia, as in the case of Dai Dong Electronics (Thailand) Co. Ltd., a supplier for Sony.

Case Study: “4 on, 2 off”

For this case we will take a look at a certain electronics company located on Chaeng Watthana Road, that produces integrated circuit boards used mostly in cars, such as the ABS (anti-lock braking system), and the sensor system. The company has around 3,200 employees of whom about 2,100 are day labourers. The monthly-paid staff includes only the office workers, supervisors, and technicians. In the past there used to be a total of around 3,800 employees, but after 2012 the number of workers has gradually decreased while the quantity of exports remains the same or has even increased.

Interestingly, there is a labour union that has been standing strong for 40 years, with 1,863 members. However, a union official said that the company has a ‘tradition’ where monthly-paid employees have nothing to do with the union.

The company started to change its employment system in 2012 with a demand to the labour union for changes to employment conditions,. reducing the number of working days from the original system of 6 days on and 1 day off, to 4 days on and 2 days off. The shifts were also changed from 3 8-hour shifts a day to 2 12-hour shifts.

This employment system reduced the income of day workers and also affected their daily lives since they could not interact normally with their families and society. So the union held an ongoing campaign to protest against the changes, including rallies in front of the factory, using the National Labour Relations Board mechanisms, complaints to the National Human Rights Commission of Thailand, etc.

Verdict No. 1/2013 of the Arbitration Board, the Department of Labour Protection and Welfare, announced on 20 June 2013, stated that the Labour Relations Board, acting as the Arbiter, judged the legal issue according to the bilateral agreement in the case of whether the 4 days on, and 2 days off employment system violated the law or not. Having considered the facts and laws, the Arbiter ruled that the 4 days on, 2 days off system where normal working hours are 7 hours per day, as proposed by the company, does not violate the Labour Protection Act, which is in accordance with the opinion of the Legal Affairs Division, Department of Labour Protection and Welfare, which said that according to the Labour Protection Act 1998, Article 28, Paragraph 1, “An Employer shall provide an Employee a weekly holiday of not less than 1 day per week, and the interval between weekly holidays shall not be more than 6 days. The Employer and the Employee may agree in advance to fix any day of the week as a holiday.”

This opinion is different from that of the National Human Rights Commission on 8 April 2010 that the changes in the employment system reduced employees’ income. This is a change in conditions of employment which is not beneficial to employees according to the Labour Relations Act 1975, Article 20, and forcing employees to work involuntary overtime is a violation of the Labour Protection Act 1998, Articles 23 and 24. It also impacts the employees’ rights to the opportunity for rest, as well as their daily lives in society, and the culture, traditions and religions that are tied to holidays. This includes the right to compensation for the decrease in employment since the daily pay of workers calculated according to Labour Protection Act, Chapter 11, Article 118, has decreased, including the right to benefits from the Social Insurance Act and right to receive compensation in cases where the compensation for an employee facing danger or injury or loss due to work under Section 18, is calculated on the employee’s pay.

Today, workers are still working 4 days on, 2 days off like before.

An attempt was made to contact the Human Resources Department of this company to ask the reasons for changing employment conditions but without success. The operator merely explained, “the information cannot be disclosed” (4 Feb 2019).

For the 4 days on 2 days off system, the shifts change every 6 days. One working day is divided into 2 shifts; the first shift works 11.00 pm to 7.00 am and the second shift 7.00 am to 3.00 pm. Overtime for the first shift is 7.00 pm to 11.00 pm with a 30 minute break before work. Overtime for the second shift is 3.00 pm to 7.00 pm with a 30 minute break before work. Annual holidays are 12-20 days under work regulations depending on length of service as determined in the regulations and the company has fixed 14 days holiday per year.

Anyone who is not familiar with factory working systems may be able to see the picture, and the allocation of time seems OK, but the viewpoint of those who really work that way is different.

A representative of the union further clarified the 4 days on 2 days off system. Originally the workers worked 6 days on and 1 day off, i.e. Monday to Saturday with Sunday off. But in this system, workers work in the morning for 4 days and have 2 days off, then change to working at night for 4 days then 2 days off. Workers are divided into 3 large groups according to shifts, swapping the work times throughout the day.

“You can think of it easily like this. In the past, we were daily labourers. We worked 26 days per month. When the system changed, we get paid for working 20 days. If we want the same income as before, we have to do overtime. Before it was 8 hours per shift, but in the new system, if we want the same income we have to work 12-hour shifts. This is like being forced to do overtime due to economic conditions, and we are not willing,” one of the union representatives said.

The representative also said that what was greatly impacted was the health of workers, which deteriorated from changing shifts all the time. This can be seen from the rate of welfare being used, group life insurance is increasing, and the rate of people asking for medicine at the factory’s sick bay is higher. There are also impacts on families since workers do not have time to meet their children or spouses because their holidays rarely coincide on Saturdays or Sundays. The rate of divorce has increased, and there have been colleagues that got into family arguments because their times wouldn’t match up. As for culture, they cannot take religious holidays off. If they ask for leave, then they get less money, while in the old system, workers could better choose whether to do overtime or not, and on what day to do it.

“Changing the work hours to morning then evening means we can’t adapt in time. Just when we’ve adapted, we have to change again. It makes our physical condition abnormal. Anyone that wants to go to a funeral needs to ask for permission, anyone that gets sick needs a medical certificate. We only want to rest and we can’t. If we insist, our participation points are deducted. When a lot of points are deducted, it affects our annual pay. For those with chronic illnesses such as allergies, changing shifts leads to them being susceptible to sinusitis. Some people working on night shifts have to sleep in the day but can’t fall asleep. Anyone with blood pressure problems will deteriorate very quickly,” the union representative said.

When their fight to change back to the old system didn’t succeed, the union then turned to demand measures that would help mitigate the impact, whether by increasing welfare, increasing the diligence allowance, increasing the canteens selling cheap food, increasing travel funds for pregnant woman, etc.

Student interns and migrant workers in the MOU system

A research group from the Kenan Institute Asia talked about data collected in the eastern industrial region and concluded that outsourced employment, as in the case where a vocational institution has a partnership agreement for students to intern at a factory, hoping to increase the students’ potential. But these students seem to enter the production line and become cheap unskilled labour, having to work 9-10 hours like any other worker.

These students confirm that these issues were reported to the educational institution, but because they still have to rely on the entrepreneurs, the problems are still not solved. This may not have become a problem if the students received benefits that were similar or equal to regular workers, but what they receive is less despite the same workload.

Sony’s student interns

Meanwhile Bunyuen Sukmai, a labour unionist who has researched labour rights and changes in employment conditions in the electronic products industry with the Asia Monitor Resource Centre (AMRC) said that an overview of conditions at the Sony Company in Pathum Thani shows a decrease in production. The factory has closed for up to 3 days due to the decrease in orders. That factory produces only circuit boards for phones. In the past a large number of student interns were hired but now the proportion has decreased. Presently there are around 2,000 workers, down from 3,500 with almost 1,000 student interns. The proportion of student interns to workers is 40:60.

Bunyuen Sukmai, a labour unionist

Bunyuen says that having students work on the production line has been going on for a long time but the intensive use of students started about 4-5 years ago before orders started to decrease. The system of taking students is a bilateral partnership under an agreement between the private sector and educational institutions for a fixed period of time; 7 months, 9 months or 12 months. If the fixed period is over and it is found that there are still many orders, then their work period will be extended.

Bunyuen said that students will receive the minimum wage but not other welfare benefits like workers. The shift pay is also less than for workers. For example, workers get 80 baht while students get 50 baht, etc. They don’t get any other benefits like bonuses, diligence allowance,s provident funds, etc. and since they aren’t employees, the students are not members of the union.

Presently there are students from around 60-70 institutions in this system in factories across the country. Each institution will send 20-30 students. Vocational certificate students will intern for 6 months while higher vocational certificate students intern for 12 months, depending on their programmes. The students work until their curriculum is complete, then the factories receive the next generation. Former students will not stay, since they need to go back to studying.

What is strange is that the work students are given is different from what they have been studying. Mostly it is no different from the production workers, but some have to brush the floor, mop the floor, or clean the machinery. According to the information Bunyuen has collected, he found that some people were studying accountancy or mechanics but had to clean machinery, mop floors or provide support to production lines carrying things for workers, etc.

For other problems such as illnesses or accidents at work, Bunyuen said that if we look at the MOU, we will see that it is written in a roundabout way for the company to get insurance so that the rights are no different from a compensation fund. But in reality it is difficult since they have to pay in advance. A problem then occurs because students that are from different areas can’t help themselves. The people who are supposed to look after the students, theoretically, are the teachers, but in reality it is usually found that there are none. Bunyuen believes that they should be included in the social insurance fund. At least these people should have rights no different to an employee’s.

When sick, they don’t have the right to sick leave. If they stop work because they are sick they do not get paid. If they have to go to the hospital, they will have to pay in advance first and get reimbursed later. In practice, when Bunyuen asked the students, they mostly answer that they don’t know which company their insurance is with, because those documents are with the employer. Nobody has ever seen their insurance card.

There are also complex power relations at work. Bunyuen said that many came as interns but did not pass, so they have to find new internships or in some cases there are problems of drugs, sexual intercourse, pregnancy. If they are tested positive for drugs, they are sent back. If they are pregnant, they are sent back. Then the educational institutions would retire them, or if there are problems concerning fights and they are sent back, then it’s also retirement. Being sexually harassed is often a problem that students keep quiet about and is difficult to even investigate seriously.

“They are students. If they make a fuss, they are sent back. Being sent back means not passing the internship. It’s become a situation of servitude. They’re squeezed in all dimensions and are forced to submit. It’s actually something quite worrying,” Bunyuen said and confirmed that this information is from interviews since they are not brave enough to complain and risk getting sent back immediately.

 

Chalee Loisoong, Secretary-General of the Confederation of Thai Electrical Appliances, Electronic, Automobile, and Metal Workers (TEAM)

Chalee Loisoong, Secretary-General of the Confederation of Thai Electrical Appliances, Electronic, Automobile, and Metal Workers (TEAM), reflected on the case of Mitsu Air Company, which also uses the student intern system. There are around 2,000 students in a total of 6,000 employees. Students intern for 6 months. They think about using student interns from one perspective, that it reduces costs. The students receive a daily wage according to the minimum wage which is the agreement. If students join correctly under the system, then it’s fine, but if not, then when there is an accident the students lose their future.

Chalee’s analysis is that hiring a large number of students affects the stability of the union because when the number of the workers goes down, the negotiating power of the union also decreases, making it more difficult to move for negotiations. If a worker who is a member of the union stops work, they still have the subcontractors and interns that can do the work.

As a solution to this, Bunyuen proposes that the agreement between the Ministry of Industry, Ministry of Labour and Ministry of Education needs to have a broader definition of “employee”. It can be written in the provisions that internship students must receive the same rights as employees, including social insurance and compensation funds.

Dai Dong’s MOU migrant workers

Charumon Wilairait, 38, has worked at Dai Dong Electronics Co. Ltd. Chonburi, for 21 years and is currently the Secretary-General of the Dai Dong Thailand Labour Union. She told us that currently there are around 400 workers (295 Thai and 100 foreigners) at the company.

Charumon Wilairat, a worker at Dai Dong Co. Ltd., and Secretary-General of the Dai Dong Labour Union

The company started accepting migrant workers in 2016, including both Thai and Cambodian subcontracted workers. The Cambodian workers are subcontracted for 2 years from a company called Rujimin Asia Supply Co. Ltd.  The subcontracted workers get only the minimum wage, unlike normal workers. In January 2019, the relationship with Rujimin was changed from a subcontract to an MOU. Cambodian workers under the MOU get 2 year contracts, while Thai workers have no time limit and no assignment. The approximately 100 Cambodian workers receive the same benefits as Dai Dong employees but no bonuses, no special holidays, and no danger allowance (30 baht per day for permanent workers). They also have to pay for their uniforms, but they receive food allowances and travel expenses. Under the former contract they got a 15 baht per day food allowance (permanent workers get 50 baht), 40 baht per day for shift pay, and no travelling expenses because there is a shuttle service (permanent workers get 600 baht), etc.

The Union was founded in 2009. After the subcontract and MOU systems were implemented, the negotiating power of the Union decreased drastically since regular workers were originally as many as 80% of all workers, but numbers decreased from 700 people to 296 people in 2014-2015 by subcontracted replacements . Then in 2016, the company expanded the number of subcontracted Cambodian workers.  This reduced the number of union members because subcontracted workers cannot become members of the Dai Dong Labour Union since they are employed by a different judicial entity.

On the problem of migrant workers in the MOU system joining unions, Bunyuen noted that on International Workers’ Day, he led about 100 migrant workers to march at Din Daeng. Now they have been sent back to their country, so MOU workers have since been afraid to join union activities. MOU workers are employed for a fixed period of 2 years but if there is a problem, they are sent back, and that’s also a problem.

The proposal to amend the law to reduce the restriction on subcontracted workers joining a union may have a problem with employers being different judicial entities. Allowing migrant workers to become union members, and also student interns, as Bunyuen has suggested, requires the agreement between the Ministry of Industry, Ministry of Labour and Ministry of Education to redefine the meaning of “employee”, possibly with provisions that interns must receive the same rights as other employees, including access to social insurance, compensation funds, etc. These may be basic proposals to help reduce the unfairness among increasingly diverse employment systems.

Thanks to Patchanee Khamnak and the Good Electronics Thailand network for providing information for this special report.


[1] Office of Industrial Economics.  Industrial Economic Conditions Report 2018 and Trends for 2019.  Available online at http://www.oie.go.th/sites/default/files/attachments/industry_overview/annual2018.pdf

[2] Electrical and Electronics Institute.  Number of businesses and workers http://www.thaieei.com/eiu/TableauPage.aspx?MenuID=35

[3] This happens through a schools-in-factories project, officially known as the Work-integrated Learning (WiL) project which the National Science Technology and Innovation Policy Office (STI) (see http://www.sti.or.th/wil.php) explains as a collaboration between the STI, the Ministry of Science and Technology and the industrial sector. The project aims to increase the country’s competitiveness by producing and developing technical and technological manpower (higher vocational certificate and bachelor’s degree level) with skills and knowledge that truly match the needs of the industrial sector and to solve the workforce mismatch between the industrial and educational sectors. All parties, especially “human resources” that participate in the program receive effective benefits.

[4] Memorandum of Understanding on Employment Cooperation. According to the explanation of Pruek Taotawin and Sutee Satrakom in “MOU for Transnational Employment, Neoliberalism, Labour Protection and Strategic Adjustments to State Regulation” in the Journal of Mekong Societies, Vol. 7 No. 3, September-December 2011, pp 1-26, the MOUs between Thailand and its neighbouring countries, namely the Lao People’s Democratic Republic, Cambodia and Myanmar, came about between 2002-2003 in a context where labour from neighbouring countries flooded into Thailand. Meanwhile the state mechanisms for managing migrant workers were ineffective, as seen by the many illegal migrant workers in Thailand who could not be managed or stopped. Under these circumstances, the MOUs were initiated.