Labour Day brings little cheer for Thailand’s 20 million informal workers
While workers’ demands always make headlines on Labour Day, more than half of working Thais have nothing to look forward to since they are “informal workers”. Even if those demands are fulfilled, they will not share the benefits.
According to the National Statistical Office, informal workers numbered 19.6 million last year or 52 per cent of the country’s total workforce.
And that figure has swelled during the economic fallout from COVID-19, which has tipped more workers into the informal sector.
Somwang Sangsantia, 44, is among those who lost their job due to the crisis. Last August, while she was isolating at home as a high-risk person following her husband’s infection, she received a LINE message from her boss telling her not to bother returning to work.
“There was no explanation or mention of severance pay,” she recounted. “I heard later that six of my colleagues were also dismissed abruptly like this.”
Somwang’s story reflects the daily insecurity that Thai workers, even those in the formal economy, can face. Her struggle over the past year also shows what it is like to be an informal worker.
Legal protection for workers
Somwang said her employer, a cable manufacturer in Chon Buri’s Sri Racha district, refused to pay any compensation even though she is legally entitled to it.
“So, I decided to sue,” she said. It took seven months of battling at Chon Buri’s Labour Court to get her severance pay of 36,000 baht, which is equivalent to four months of her salary.
Now earning her living as a small vendor, Somwang explained that the money meant a lot to her, especially since she has to support her son and mother.
Pimai Ratwongsa, 50, said she thought her job was secure after working at the Body Fashion (Thailand) Co Ltd factory in Samut Prakan for nearly 30 years.
“I thought I would retire happily with a large enough nest egg to invest as a micro-entrepreneur in my home province of Bueng Kan,” Pimai said. “But that was just a dream.”
After 28 years at the firm, she was dismissed in late 2020 without any severance money.
“Not only am I struggling to survive, but I’m also fighting for my right to severance pay,” Pimai said.
On Friday, she and her former colleagues rented a van to attend the final hearing at a labor court in Ayutthaya province. The court ruled in their favor because nobody showed up from Body Fashion to put up a defense.
“But we have not got anything yet. We will have to check what assets our former employer has and ask the Legal Execution Department to enforce the court order,” Pimai explained.
Life as an informal worker
Pimai now earns about 3,000 baht a month working part-time sewing bags. She gets 2 to 3 baht for every bag she sews.
Asked if she was being paid an unfair rate as an informal worker, she said: “Of course. I have no bargaining power. Employers never offer a pay raise. Instead, they always ask for a discount. I really want to ask for a higher wage given the soaring living expenses, but I’m worried about losing my job.”
Pimai also no longer has state protection or social security.
In a 2021 report, the Bank of Thailand said informal workers were vulnerable because of their low, unstable income, lack of state protection and welfare, as well as scant savings or large household debts. Due to this vulnerability, informal workers have also suffered more than most from the fallout of COVID-19.
Move Forward Party’s party-list MP Wanvipa Maison, a former labor leader, said that a worker laid off at the age of 40 or so has little chance of getting a permanent job again.
“When these people lose their job, many more lives are affected because they are usually their family’s breadwinner,” the MP said.
To address this situation, the Cabinet late last year approved in principle a bill to protect informal workers and improve their quality of life. Once this legislation goes into effect, it will offer legal protection and some form of security for people working as street vendors, taxi drivers and other informal occupations.
However, Wanwipa says new problems are emerging for workers even before the old problems have been tackled. Falling from the formal into the informal sector is one of those problems.
“We also have to think about migrant workers. They are not treated as equals in the Thai labor market,” she said. “If Thais face unfair labor practices, foreigners suffer even worse.”
Wanwipa explains that employers often evade legal obligations to workers by hiring people for just 11 months at a time. If these people want to keep working, they have to reapply.
Under the law, people who have been employed for more than 12 months can receive extra benefits if their job is terminated.
Fair minimum wage?
Labour groups are now pushing for a hike in the daily minimum wage, saying it should be increased to 492 baht a day. The daily minimum wage currently ranges between 313 and 336 baht, depending on where the workers are based. These rates have been in effect since 2020.
Observers say there has not been a significant increase in daily minimum wages since the Yingluck Shinawatra-led government introduced the 300-baht daily minimum in 2013. Since then, the hikes have been tiny.
For instance, the hikes approved in 2017 ranged from 300 to 310 baht, followed by 300 to 330 baht in 2018. No changes to the minimum wage were made in 2019.
The Thai Labour Solidarity Committee and State Enterprises Workers’ Relations Confederation insist that a daily minimum wage rate of 492 baht should apply across the country. According to a nationwide survey in 2017, people need a minimum of 14,700 baht per month to cover rent, child support, parental support, and daily living costs.
By Thai PBS World’s General Desk