BANGKOK — Thailand’s Labor Ministry said Friday it will step in to mediate a labor dispute between Daikin Industries (Thailand) Co., Ltd. and a company labor union after 11 negotiation rounds failed, prompting the company to announce a lockout affecting 1,500 workers.
Labor Minister Trinuch Thienthong said the conflict does not constitute a “layoff,” but rather a breakdown in negotiations between the employer and the Daikin Amata Raksaree Labor Union. She said she has instructed the Department of Labor Protection and Welfare to act quickly to facilitate a resolution within the bounds of labor law.
The company announced the lockout at its Chonburi plant effective 8 a.m. on December 6, following the failure of the latest talks on December 4. Despite the announcement, the union said a 12th mediation session remains scheduled for December 8 at the provincial labor office.
Saroj Komkai, director-general of the labor protection agency, said he has been ordered to expedite the mediation. “The Minister of Labor is concerned for both employers and employees and hopes the negotiations will reach a fair conclusion,” he said.
Saroj emphasized that the lockout is legal under Thailand’s Labor Relations Act. “During a suspension of work, the employer is not required to pay wages. This action is lawful when employees go on strike or when negotiations fail to reach an agreement. It is not considered a layoff,” he said.
Union president Manit Piyang said on Dec. 4 that the union’s demands were reasonable. “We, the insiders, know what the company is able to offer. This is a negotiation. We’re saddened that people don’t understand us,” he said.
Manit added that the lockout applies only to the Daikin Amata Raksaree Labor Union at the Amata City Chonburi industrial estate, not to Daikin’s unions in Rayong or Map Ta Phut. He said the company must still pay legally required benefits — including an extended bonus of six months’ salary plus 12,000 baht ($375) and a 3% wage increase — to all employees, including those locked out.
The union still plans to participate in the December 8 mediation session, Manit said, adding that representatives from all three Daikin factories will meet over the weekend to determine their next steps.
The dispute began after workers rejected the company’s offer of a five-month bonus plus 12,000 baht and a 2% salary increase. Employees demanded higher compensation, citing Daikin Thailand’s nearly 6 billion baht ($188 million) profit and strong cash flow.
Workers were also angered by the company’s plan to change its long-standing practice of giving ten-year employees a gold gift. With gold prices rising, Daikin proposed replacing the gold with a 40,000-baht ($1,255) payment and reallocating the cost into the general bonus pool. Some employees opposed the change, prompting the company to offer a higher bonus of seven to eight months if workers agreed to end the gold-gift tradition or convert it to cash.
The disagreement led workers to protest outside the Chonburi factory in the Amata City industrial estate after 11 rounds of negotiations failed to produce an agreement.
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