Labour Affairs Q&A: Uneasy peace at GM (Thailand)

We read in MR&TS's monthly report "Thai Labour Chronicle" that General Motors (Thailand) concluded a new collective bargaining agreement effective only from October 15 to November 9. Will the three-week agreement soon lead to another round of bitter dispute?

If a collective bargaining agreement does not state a period of validity, it is binding for a year. On the other hand, the union and management cannot set a period of validity lasting more than three years. Thailand's Labour Relations Act of 1975 really promotes collective bargaining - demanding more of the same every year. In fact, a good agreement should enable the management and the union to concentrate on something else more constructive. The law also says a collective-bargaining agreement has a roll-on effect, one year at a time, if there is no new negotiation or agreement.

Peace returned to GM (Thailand) on October 15 after a strike and a lockout started 10 days earlier. We should not forget the agreement was the conclusion of a drawn-out dispute that began with the union's submission of excessive demands on October 22, 2008. It demanded a bonus of seven-and-a-half months' salary plus Bt30,000, wage increases ranging from 9-11 per cent and an average hourly wage rate equalling salary divided by 176 hours, among other things.

As the automobile industry suffered a 40-per-cent drop in business, about 800 GM employees took the financial offer under a mutual-separation programme and left early in the year. Half of the remaining 1,700 direct employees are union members and the other half salaried staff willing to cooperate with the management.

A new round of negotiations for more - based on the result of the company's operational performance this year - will start soon. Some analysts expect the tough stance taken by GM (Thailand) throughout the 12-months of negotiation may prompt the union to be realistic about the situation and appreciate the fact its members have good jobs.

On the other hand, November is the time each year when the strong Ford Mazda union - Auto Alliance Thailand (AAT) - puts up its often-impossible demands. Concerted union actions at AAT and GM simultaneously at the start of economic recovery may send a chill to all parts suppliers, but we will get used to these before long.

At least there will not be another road blockade. Locals in Rayong province, if not the government, have lost their patience with such tactics.