Report in which the committee requests to be kept informed of development - Report No 381, March 2017

Case No 3180 (Thailand) - Complaint date: 15-JAN-16 - Follow-up

Allegations: The complainant organizations allege judicial and disciplinary harassment of four leaders of the TG Union. They further allege that the conduct of the company in the dispute that prompted the complaint, exposes a number of failures in Thai law to protect workers’ and trade union rights, as well as that the disputed ruling highlights a number of inconsistencies between the law and the principles of freedom of association and the right to collective bargaining

1. 549. The complaint is contained in a communication from the Thai Airways International Union (TG Union), the State Enterprise Workers Relations Confederation (SERC) and the International Transport Workers’ Federation (ITF) dated 15 January 2016.
2. 550. The Government provided its observations in communications dated 14 March 2016 and 24 February 2017.
3. 551. Thailand has not ratified either the Freedom of Association and Protection of the Right to Organise Convention, 1948 (No. 87), or the Right to Organise and Collective Bargaining Convention, 1949 (No. 98).

A. The complainants’ allegations

1. 552. In a communication dated 15 January 2016, the complainant organizations, the TG Union, SERC and ITF allege that the conduct of Thai Airways International Public Company Limited (hereinafter; the company) in the dispute that prompted this complaint exposes a number of failures in Thai law to protect workers’ and trade union rights, for which the Government is responsible as a member of the ILO. While this complaint focuses on the Government’s failures to adequately respect trade union and workers’ rights in accordance with the principles of freedom of association as set forth in ILO Conventions Nos 87 and 98, the complainants also contend that the Government does not meet the minimum requirements contained in Conventions Nos 135, 151 and 154 on workers’ representatives, public sector labour relations and collective bargaining, respectively.
2. 553. The complainants indicate that the company, originally founded in 1960 as a joint venture between an international airline and Thailand’s domestic carrier, was launched on 1 April 1988 and is a publicly traded company with 51 per cent of its shares owned by the country’s Ministry of Finance. From its hub at Suvarnabhumi Airport, the company flies to 78 destinations in 35 countries using a fleet of 89 aircraft. It is a founding member of Star Alliance. As of 2015, almost 30,000 workers are working at the company, of which 21,600 are directly employed by the company.
3. 554. The TG Union was first founded in 1979. It was dissolved by the military junta in 1991 following a blanket ban on trade unions in the public sector. After operating as an employees’ association for nine years, the union was re-established following labour law reforms. Today, it represents 13,000 members in all categories of the company (out of an eligible pool of 19,000 workers). The TG Union represents the voice of labour in the company’s Bipartite Labour Relations Committee. Nationally; the TG Union is affiliated to SERC, where it plays a leadership role. Founded in 1980, SERC brings together 45 public sector unions which represent 70 per cent of organized labour in the Thai public sector. It joined the International Trade Union Confederation in 2008. Internationally, the TG Union has been an affiliate of the ITF since 1996.
4. 555. The complainants allege that on 2 January 2013, the company’s chairperson announced bonus payments amounting to no less than one month’s pay for all employees (including managers) to be paid before the end of that month. On 17 January 2013, following two weeks of silence from management and spurred on by its members, the TG Union sent a letter to the company’s chairperson calling for a 7.5 per cent salary increase and bonus payments equivalent to two months’ pay for all employees. The List of Demands was re-submitted on 18 January 2013 to the company’s chairperson and the Minister of Transport ahead of a board meeting scheduled for later that day. That afternoon, the board announced that it had agreed to give all employees a bonus equivalent to one month’s pay, but that there were to be no salary increases.
5. 556. According to the complainants, following this announcement, around 1,000 disgruntled employees, who were either off duty or on rest breaks, spontaneously assembled at the ground equipment service centre at Suvarnabhumi airport. The gathering called on the TG Union to explain the board’s decision. These employees protested the board’s decision, called on the company’s chairperson to honour the commitments made on 2 January 2013 and requested him to address the crowd in person, but he failed to do so. The employees continued their spontaneous protest until the evening of 19 January 2013, with many joining before or after work. The complainants underline that, during both days, some TG Union leaders attended the protest to appease employees and explain the union’s requests and the board’s decision, and that at no time did the TG Union or its leadership instigate or encourage the protestors.
6. 557. The complainants state that, around 11 p.m. on 19 January 2013, the management and the TG Union leadership signed a memorandum of agreement (MoA), with a view to the Union calling on employees to end the protest. The TG Union made it clear at the time that it played no part in organizing the protest, but that it would use its position to encourage employees to end the action in the spirit of cooperation and social partnership. Among other things, it was agreed in the MoA that the TG Union would have further meetings with management to discuss the salary and bonus issues, and that no reprisals would be taken against employees who took part in the protest. The MoA explicitly states that: “It is deemed to be normal performance of the works. Therefore, no disciplinary transgression exists and the management shall not initiate legal proceedings, either in a civil or criminal matter, against the related employees who join in the assembly in good faith.”
7. 558. The complainants indicate that, at a meeting on 21 January 2013, management and the TG Union discussed the company’s economic performance and whether it could fulfil the List of Demands. It was agreed by both parties that the company could not pay a two-month bonus, but that it was in a position to make a special incentive payment to all employees in addition to a one-month bonus. On 22 January 2013, the TG Union met with the company’s chairperson and agreed on the outcomes of the previous day’s meeting. According to the complainants, on 7 February 2013, a further meeting was held between the TG Union and management where it was finally agreed that a recommendation would be made to the board for a 7.5 per cent salary increment, a one-month bonus and a special incentive payment of 300 million Thai baht (THB) to be shared by all employees. On 8 February 2013, the board approved a resolution to, among other things, agree to management’s recommendation.
8. 559. The complainants denounce that, on 20 January 2014, the company filed a lawsuit against four leaders of the TG Union in the Central Labour Court (CLC) seeking damages over alleged losses directly attributable to the protest. The four defendants and their roles within the TG Union at the time of the protest were as follows: (i) Ms Chamsri Sukchotrat, President (now retired); (ii) Mr Damrong Waiyakanee, Vice-President; (iii) Mr Somsak Manop, Secretary; and (iv) Mr Suphorn Warakorn, Chairperson of the TG Union Subcommittee.
9. 560. On 3 August 2015, the CLC ruled in favour of the company and ordered the four defendants to pay THB303,619,865 (circa US$8.6 million) in damages with interest accruing from the date of the protest. The Court took the view that the List of Demands signed by all four defendants amounted to a demand for an agreement relating to conditions of employment; that the protest amounted to industrial action contrary to the outright ban on strikes under the State Enterprise Labour Relations Act (SELRA); that the collective bargaining demand failed to comply with the procedure under the SELRA, thereby making it an unlawful collective bargaining demand; that the MoA was void ab initio due to it being signed by unauthorized signatories (this was despite five senior executives executing the document in apparent good faith); and that, as the List of Demands was deemed to fall outside the scope of the TG Union’s remit, the Court held that the four defendants should be jointly liable in their personal capacities for the following damages: (i) damages resulting directly from the protest: THB499,677.50 for hiring replacement workers on 18 and 19 January 2013; and (ii) damages for loss of image/reputation THB157,640,671.84, and for negative coverage in print and television media THB142,500,401.
10. 561. The complainants add that the four defendants filed an appeal to the Supreme Labour Court on 29 October 2015. The appeal concerned the following points of law: (i) the company did not obtain the requisite authorization of its board to file a case against the union leaders; (ii) the List of Demands did not constitute a collective bargaining demand under SELRA; (iii) the case was filed one day after the expiry of the limitation period for appeals; and (iv) the damages sought by the company were improperly calculated. The Supreme Labour Court only allowed the appeal on the issue of requisite authorization. Following a second appeal by the TG Union, the Supreme Labour Court decided that it would entertain all four grounds of appeal if the union paid in to the court as security the full claim amount. The TG Union has since filed a complaint against this decision.
11. 562. According to the complainants, management opened, in addition to the court proceedings, disciplinary investigations against the three defendants still employed by the company. Following a conciliation meeting organized by the Labour Ministry in November 2015, the company agreed to suspend the disciplinary process pending the outcome of the appeal to the Supreme Labour Court.
12. 563. In the complainants’ view, ordering the TG Union leaders to pay $8.4 million in damages is an act of judicial harassment amounting to a gross violation of the rights to freedom of association and collective bargaining as set forth in Conventions Nos 87 and 98; in particular, the judgment highlights inconsistencies between national law and the principles of freedom of association and the right to collective bargaining.
13. 564. The complainants believe that sections 25–27 of the SELRA governing public sector collective bargaining only offer limited collective bargaining machinery to the social partners. Indeed, the TG Union’s List of Demands calling on the company to honour previous commitments relating to pay and bonuses was considered by the court to fall foul of the SELRA. The Committee on Freedom of Association (CFA) has held that: the right to bargain freely with employers constitutes an essential element of freedom of association, and trade unions, including those representing public sector workers, should have the right through collective bargaining or other lawful means to seek to improve the conditions of their members; that any interference by public authorities in this regard constitutes a restriction on that right; and that, in the context of Convention No. 151, a degree of flexibility can be afforded in the choice of procedures to be used in the determination of the terms and conditions of employment.
14. 565. Therefore, in the complainants’ view, sections 25–27 the SELRA, a breach of which can result in exorbitant fines or damages, do not conform to the principles of freedom of association. Furthermore, the complainants believe that, by accepting the company’s claim that the MoA is void due to its defective execution, the court fails to recognize the importance of the social partners’ obligation to negotiate in good faith. The complainants feel that the Government has failed to take measures to encourage and promote the full development and utilization of machinery for voluntary negotiations between social partners as per Article 4 of Convention No. 98.
15. 566. The complainants recall that section 33 of the SELRA imposes a general prohibition on industrial action in the public sector, and section 77 stipulates penalties for strike action: up to one year of imprisonment or a fine, or both, for participation in a strike; and up to two years of imprisonment or a fine, or both for its instigation. The complainants underline that the TG Union denies having instigated the protest, and that the protest was lawful, as it did not amount to industrial action under the SELRA. Consequently, the Court’s designation of the protest as a strike could not have been supported by national law. Furthermore, the complainants believe that, even if the protest did constitute prohibited industrial action under the SELRA, it is clear that Thai law is not in conformity with the principles of freedom of association.
16. 567. The complainants stress that, in recognizing the right to strike, the CFA has stated that it regards the right as constituting a fundamental right of workers and of their organizations and one of the essential legitimate means through which workers and their organizations may promote and defend their economic and social interests. According to the complainants, while it would appear that the Government recognizes this fundamental right for private sector workers, it clearly does not hold the same view for public sector workers. The CFA has held that the right to strike may only be restricted or prohibited in the following cases: (i) in the public service only for public servants exercising authority in the name of the State; (ii) in essential services in the strict sense of the term (that is, services the interruption of which would endanger the life, personal safety or health of the whole or part of the population); or (iii) in the event of an acute national emergency and for a limited period of time. It is clear from the jurisprudence of the CFA that aviation workers employed by state owned air carriers would not count as public servants exercising authority in the name of the state. Too broad a definition of the concept of public servant is considered to result in a very wide restriction or even a prohibition of the right to strike for these workers. The CFA has held that air travel does not constitute an essential service in the strict sense of the term. The same applies to transport services and public transport services generally.
17. 568. The complainants conclude that, while it is clear that the Thai prohibition on strikes in the public sector cannot be justified by any of the reasons cited above, it also fails to give compensatory guarantees for workers deprived of that right. The CFA has held that such protection should include, for example, impartial conciliation and, eventually, arbitration procedures which have the confidence of the parties. In this regard, the complainants wish to highlight the TG’s Union’s complete lack of faith in the national bipartite and tripartite structures available to them. While the protest was designated as a strike in a civil law context and the TG Union leaders were not subject to penal sanctions, the complainants submit that the excessive penalties contained in section 77 of the SELRA contravene the principles of freedom of association.
18. 569. As the CFA has previously concluded in similar cases, penalties of this nature can have an intimidating effect on trade unions and inhibit their legitimate trade union activities. Furthermore, by targeting individual trade union leaders, rank and file members and activists are discouraged from seeking leadership positions within their unions. In the complainants’ view, the damages awarded to the company could lead to the bankruptcy of the four defendants and possibly the dissolution of the TG Union.
19. 570. The complainants indicate that the TG Union can only appeal the Court’s decision on points of law. They allege that the Court relied heavily on the company’s version of events and its dubious damages calculations, so that the defendants have effectively had to accept an inaccurate set of facts. For example, the defendants vehemently deny that the company hired replacement workers during the protest. Furthermore, the complainants denounce that the presiding judge refused full disclosure of the company’s documents to the TG Union in contravention of civil procedure rules. In the complainants’ view, the Court’s judgment is a political decision aimed at intimidating trade unionists. As the CFA has previously stated, the absence of guarantees of due process of law may lead to abuses and result in trade union officials being penalized by decisions that are groundless. This in turn can also create a climate of insecurity and fear which may affect the exercise of trade union rights. For these reasons, the complainants contend that the Government has failed to apply in practice the safeguards of normal judicial procedure embodied in Thai law.
20. 571. Given the serious nature of the violations of trade union rights set out in the present complaint, the complainants respectfully request the Committee to find the Government to be in breach of the principles of freedom of association as set out in Conventions Nos 87 and 98 with a view to restoring the full exercise of those rights, and to urge the Government to consider the appeal filed by the TG Union to have a suspensive effect with regard to the payment of damages.

B. The Government’s reply

1. 572. In a communication dated 24 February 2017, the Government confirms the facts alleged by the complainants and indicates, in addition, that: (i) the protesting employees prevented employees who did not join the assembly from entering to perform duties in substitution for the employees who had joined the assembly; (ii) one of the four defendants, Mr Somsak Manop, was terminated with the permission of the judiciary upon an intentional, criminal offense against the employer; (iii) as to the MoA dated 19 January 2013 referred to by the court, its negotiation and conclusion between the company and the TG Union took place under the bipartite system without any interference from the Government; (iv) as to the demand submitted to change the agreement of conditions of employment, it must be considered as accomplished, since the company agreed on 8 February 2013 to pay working benefits as demanded by the TG Union (salary increase of 7.5 per cent and bonus equivalent to 1 month’s pay); (v) on 8 October 2015, the Government received a letter dated 6 October 2015 from the TG Union regarding the labour rights abuses committed by the company, the lawsuit for damages filed by the company and the judgment in favour of the company, urging it to settle the dispute between the parties, to attempt to withhold the enforcement of the judgment, to prevent the disciplinary punishment and to reform labour relations; and (vi) negotiations aiming to resolve the conflict between the company and the trade union have taken place on 28 October and 27 November 2015.
2. 573. In its communications dated 14 March 2016 and 24 February 2017, the Government specifies that the conciliation led to the following result: (i) regarding the damages compensated by TG Union leaders at the order of the CLC, the parties agreed to await the verdict of the court as appealed by the TG Union; whether the appeal court will uphold the verdict of the CLC or not, the company will propose this issue to be an item on the agenda of the Relations Affairs Committee, the bipartite body in the State enterprise, in order to seek a mutual solution; (ii) regarding the disciplinary punishment to be imposed on two out of four members of the TG Union committee, while awaiting the court verdict concerning reinstatement, the company decided to suspend the inquiry until the end of the procedure in the appeal court; the parties agreed to propose this issue to be an item on the agenda of the Relations Affairs Committee after the end of the appeal proceedings in order to seek a mutual solution; and (iii) regarding the labour relations reform, the parties agreed to communicate more among themselves and to hold the Relations Affairs Committee meeting at least once a month for consulting with each other on any concerns raised and for mutually seeking labour solutions.
3. 574. The Government states that the Memorandum of Negotiation was signed by representatives of the company and the TG Union on 27 November 2015.
4. 575. In its communication dated 24 February 2017, the Government underlines that the CLC’s order on payment of damages is not a sentence against the labour organization but rather concerns the individual leaders and, in addition, the lawsuit is not finalized yet. The parties mutually agree to await the judgment of the appeal court and agreed to conduct a consultation seeking resolution when the judgment is handed down. The Government recalls that the CLC is an independent body, and that no one has influence over the jurisdiction of the court.
5. 576. Lastly, the Government announces that the tripartite working group for revising the SELRA already made a proposal to delete sections 33 and 77. The tripartite working group also proposed to include the right to strike for State enterprise employees in the revised draft of SELRA. The revised draft of SELRA will be submitted to Cabinet for approval in principle and will be approved in content and wording by the Council of State. Then, the revised draft will be proposed to the National Legislative Assembly in accordance with the national legislative process.

C. The Committee’s conclusions

1. 577. The Committee notes that, in the present case, the complainants allege judicial and disciplinary harassment of four leaders of the TG Union and that the company’s conduct in the dispute that prompted the complaint, as well as the disputed ruling, highlight a number of inconsistencies between the law and the principles of freedom of association.
2. 578. The Committee observes that, according to both the complainants’ allegations and the Government’s reply, following the management’s rejection of the List of Demands, the employees gathered to protest against the refusal of a wage increase of 7.5 per cent and a two-month bonus. The Committee also observes that, despite the signing of a MoA, pursuant to which the union was to end the protest (which it did) and the management was to continue discussions on the List of Demands (which it did) and to refrain from initiating legal proceedings due to the protest, one year later the company lodged a claim for damages over losses allegedly attributable to the protest. In this regard, the Committee regrets the Central Labour Court’s (CLC’s) finding that the MoA was, due to a formality, invalid ab initio, and emphasizes that, in line with the principle of bargaining in good faith, agreements negotiated in good faith create the expectation of the parties that commitments will be honoured.
3. 579. The Committee further observes that the CLC held that, after advancing a demand on conditions of employment to the employer, the union committed a wrongful act by violating the strike prohibition in section 33 and disregarding the procedure set out in the SELRA, and consequently ordered that the four trade union leaders compensate the damages inflicted upon the company through the protest, which were evaluated in the amount of THB303,619,865 (circa $8.6 million). The Committee recalls that, in the framework of previous cases concerning Thailand, it had repeatedly noted with regret that section 33 of the SELRA imposes a general prohibition of strikes in the public sector [Case No. 3022, 372nd Report, para. 614; Case No. 1581, 327th Report, para. 111]. The Committee has always recognized that the right to strike is one of the essential means through which workers and their organizations may promote and defend their economic and social interests [see Digest of decisions and principles of the Freedom of Association Committee, fifth (revised) edition, 2006, para. 522]. Reaffirming that section 33 of the SELRA is not in conformity with the principles of freedom of association, the Committee notes with interest the Government’s indication that the tripartite working group revising the SELRA proposed deleting section 33 (strike prohibition) and section 77 (corresponding prison sentence and fine) of the SELRA and proposed granting the right to strike to state enterprise employees. The Committee further notes that the draft will be submitted to Cabinet and the Council of State for approval, and will subsequently be proposed to the National Legislative Assembly. The Committee trusts that the abovementioned revision process will result in the abrogation of these provisions without delay and requests the Government to keep it informed of the progress made in this regard.
4. 580. Furthermore, the Committee recalls that sanctions should only be imposed as regards strikes where there are violations of strike prohibitions which are themselves in conformity with the principles of freedom of association. In light of the above, the Committee reiterates that the decision against the four union officials to pay damages was based on strike prohibitions which are themselves contrary to the principles of freedom of association. Moreover, the Committee recalls to the Government that the use of extremely serious measures against workers for having participated in a strike, implies a serious risk of abuse and constitutes a violation of freedom of association. For instance, the Committee has repeatedly emphasized that fines which are equivalent to a maximum amount of 500 or 1,000 minimum wages per day of abusive strike, may have an intimidating effect on trade unions and inhibit their legitimate trade union activities. The Committee observes with deep regret that the damages of approximately $8,6 million ordered by the court against the four union leaders for a two day strike that it deemed unlawful, correspond to more than 30,000 minimum wages, and considers that damages of such an amount are disproportionate and excessive and are likely to have an intimidating effect, regardless of whether they are imposed against the union itself or against its leaders. Noting in addition with great concern the complainants’ indication that the court decision could lead to the bankruptcy of the four individuals concerned and the dissolution of the TG Union, the Committee trusts that the Supreme Labour Court will be informed by the Government of the Committee’s conclusions concerning the principles of freedom of association. The Committee requests the Government to keep it informed of developments in this regard and to provide a copy of the Supreme Labour Court’s decision once it is handed down. In this context, the Committee, welcoming the conciliation meetings held between the parties and facilitated by the Ministry of Labour and the resulting Memorandum of Negotiation signed by representatives of the company and the TG Union on 27 November 2015, notes in particular that the parties agreed, with regard to the damages compensated by TG Union leaders at the order of the CLC, to await the verdict of the court as appealed by the TG Union and, whatever the ruling, to submit the issue to the bipartite Relations Affairs Committee.
5. 581. Lastly, the Committee welcomes the agreement reached by the parties on the suspension of the disciplinary measures imposed by the company due to the conduct of the protest pending the outcome of the appeal lodged by the union before the Labour Court. With reference to its foregoing conclusions, the Committee again considers that the disciplinary measures against the trade union officials have been imposed in response to violations of strike prohibitions, which are themselves contrary to the principles of freedom of association, and trusts that the Labour Court will be informed by the Government of the Committee’s conclusions concerning the principles of freedom of association. The Committee requests to be kept informed of developments in this regard.

The Committee’s recommendations

1. 582. In the light of its foregoing conclusions, the Committee invites the Governing Body to approve the following recommendation:
   • (a) Noting with interest the Government’s indication that the tripartite working group revising the SELRA proposed deleting sections 33 and 77 of the SELRA, the Committee trusts that the revision process will result in the abrogation of these provisions without delay and requests the Government to keep it informed of the progress made in this regard.
   • (b) Considering that, upon the claim for damages lodged by the company over losses allegedly attributable to the protest action, the damages ordered against the four union officials are based on violations of strike prohibitions which are themselves contrary to the principles of freedom of association, and that their excessive amount is likely to have an intimidating effect on the TG union and its leaders and inhibit their legitimate trade union activities, the Committee trusts that the Supreme Labour Court will be informed by the Government of the Committee’s conclusions concerning the principles of freedom of association. The Committee requests the Government to keep it informed of developments in this regard and to provide a copy of the Supreme Labour Court’s decision once it is handed down.
   • (c) Considering that the disciplinary measures imposed by the company against officials of the TG Union due to the conduct of the protest have been imposed in response to violations of strike prohibitions, which are themselves contrary to the principles of freedom of association, the Committee trusts that the Labour Court will be informed by the Government of the Committee’s conclusions concerning the principles of freedom of association and requests the Government to keep it informed of any developments in this regard.