Labor standards or labor codes of conduct in Thailand have been under scrutiny and acknowledged by exporters for the past 10 years. The implementation of labor standards for trading is carried out by two major parties: the government and multinational companies in trading with local exporters. The actions taken by both parties in management of labor standards for trading, however, seem not intensive enough, as further explained below.
Implementation of Thai Labour Standards (TLS-8001)
The Thai Ministry of Labour, in collaboration with the private sector, produced the Thai Labour Standards (TLS-8001) in 2006 under the name “Thai Corporate Social Responsibility.” This labor standard is similar to other important standards of the International Labour Organization and other labor standards for trading, especially Social Accountability 8000 (SA 8000). The TLS-8001 focuses on voluntary commitment from companies performing export business with the United States and European countries. The standards consist of 12 categories: 1) general rules, 2) management system, 3) forced labor, 4) remuneration, 5) working hours, 6) discrimination in the workplace, 7) discipline, 8) child labor, 9) female labor, 10) freedom of association and collective bargaining, 11) health and safety in the workplace, and 12) workers’ welfare (more information can be found at www.labour.go.th
A number of TLS-8001 standards are higher or more intensive than the standards of Thai labor laws, including those having to do with remuneration, promotion, fringe benefits, and discrimination on the basis of nationality, gender, age, skin color, disabilities, and union membership. For instance, under TLS-8001, workers are not allowed to work more than 12 hours of overtime per week, with a three-year adjustment period for employers, compared to 36 hours per week in Thai labor law (although workers often prefer longer overtime over better working conditions due to the higher standard of living overtime pay generates for themselves and their families). Employment of children less than 15 years of age and interference with workers’ representatives are also prohibited.
The Ministry of Labour has been encouraging Thai export firms to implement TLS-8001 standards for over four years. Throughout this period, the government has offered financial support to firms to improve (about 75,000 baht), inspect and certify (about 75,000 baht) their standards. Currently, there are 650 firms that meet the standard and are certified at the basic level
(certified as being in compliance with the TLS-8001 at the minimum prescribed level) and at the completion level
(in compliance with all requirements of the TLS-8001). See the attached pdf, Notification
of the Department of Labour Protection and Welfare,
for more information about these levels. Despite the relatively small number of certified firms, compared to more than 20,000 existing export firms, the ministry is setting a higher goal each year.
The TLS-8001 standards reduce the burden on government to carry out inspections to verify compliance because firms must carry out their own inspections. Participating export firms are therefore more familiar with and prepared to comply with other labor standards for trading that they must follow when receiving orders from multinational companies in the future. Moreover, their workers will receive better treatment in terms of working conditions.
Problems gaining industry support for the TLS-8001
There have been a number of problems in implementation and adherence to the Thai labor standards:
Implementation of standards or codes of conduct by the private sector
The TLS-8001 do not meet international requirements. Most
Thai firms disregard them because the standards and management system do
not meet the labor standards or codes of conduct of multinational firms’
home countries. Local firms still need to follow the labor standards of the
client company, so compliance with the Thai standard is a further unnecessary
During the initial promotion of the TLS-8001, the government
offered financial support to help firms improve and qualify for the standards. However,
in the future, firms will be responsible for the cost of maintaining
the standards, and firms do not find this cost worthwhile.
The unpopularity of TLS-8001 is also due to over-limiting standards
such as employee welfare and the decrement in overtime hours from 36
to 12 hours per week in three years. When firms need to increase their production suddenly
due to the amount of orders they receive, they often have insufficient
overtime hours to meet the orders.
The government and Ministry of Labour do not provide sufficient incentives
to encourage the use of the standards, both in terms of taxation and
problems in the government sector include a limited
budget, limited experts, and limited ability to improve the standard due to rules and regulations. Also, the change of governments causes the improvement
process to slow down or come to a stop.
Neither labor union leaders nor employers pay enough attention to the
TLS-8001, even though they cooperated with the government to
create the standard.
Many export firms are not owners of the brand that they produce. They receive
orders from brand owners abroad. Therefore, these firms need to follow the labor
standards set by multinational companies who are under pressure from consumer
protection movements and labor unions in their own countries.
Over the past 10 years, firms that have implemented labor standards or codes of conduct are primarily in the fabric, sport apparel, toys, and furniture industries, and to a lesser extent in the food, electronics, and automobile industries.
Firms are also required to comply with Thai labor laws; however, these laws are only minimum requirements. The labor standards or codes of conduct of international brands reach beyond the minimum requirements of Thai laws. The Thai government is also considering improving the inspection of labor conditions, which will guarantee better law enforcement and encourage firms to meet international labor standards, which are often barriers to trade for Thai firms. The government will also be able to study how the private sector is systematically conforming to the labor standards.
Cross-sector Issues of compliance with exporter codes of conduct
The following industries are commonly found to have issues with adhering to labor standards or codes of conduct for trading: 1) electrical appliances and electronics, 2) automobiles, 3) food and beverages, 4) ceramics, 5) nongovernmental organizations, 6) educational institutions, 7) state enterprises, 8) services, 9) international freight, 10) fabrics, 11) steel, 12) stationery, 13) sports equipment, 14) plastic products, and 15) other. These issues are as follows:
The labor standards or codes of conduct are not considered to be an important factor for a sustainable business because they do not directly relate to the prosperity of the business itself.
Most firms comply with labor standards or codes of conduct only when they are inspected by their clients or the standard organizations. Continuous controls are not carried out voluntarily by those firms.
The involvement of workers and labor unions in the labor standards or codes of conduct is limited or nonexistent, especially in nonunion firms.
Common problems of workers’ treatment found in many exporting firms are as follows: Workers do not want to reduce their overtime hours because much of the labor force in the country receives an already low income. Workers are discriminated against on pay raises and promotions. Performance appraisals are not carried out according to regulations. Contracted workers do not receive benefits and compensation equal to those full-time workers receive, even though they perform the same work at the same level of performance. Leaders and members of labor unions may be discriminated against in terms of promotion, training, and intimidation. Firms fail to manage workers’ safety, due to lack of safety equipment, lack of attention to safety procedures, and inadequate safety training programs. Firms also do not educate their workers about labor law and their rights.
The situation of migrant workers receives even less attention. There are many
areas in which the treatment of migrant workers contradicts the labor standards.
For instance, many migrant workers are paid lower wages than the minimum
required by law. The documents and work permits of many of them are confiscated
by their employers, and performance appraisals of many migrant workers are
not fair in comparison to the evaluation of Thai workers. These issues arise due to
the migrant workers’ lack of knowledge and inability to make a petition.
Labor standards for trading in Thailand are generally becoming more accepted, but slowly, due to issues in both the public and private sectors. Therefore, the collaboration between all parties—labor unions, government agencies, companies, and consumer protection movements at both the local and international levels—are necessary to strengthen the implemention of labor standards for trading in Thailand.