Thailand orders lingerie maker to compensate workers in rare case

by Nanchanok Wongsamuth | @nanchanokw | Thomson Reuters Foundation
Wednesday, 24 March 2021 13:53 GMT

ARCHIVE PHOTO: A woman uses a sewing machine in Bangkok, Thailand March 9, 2020. REUTERS/Chalinee Thirasupa

Image Caption and Rights Information

More than 1,200 Thai garment workers are entitled to 242.22 million baht ($7.81 million) in severance pay and wages owed

By Nanchanok Wongsamuth

BANGKOK, March 24 (Thomson Reuters Foundation) - A Thai lingerie manufacturer has been ordered by authorities to compensate more than 1,200 workers who were dismissed without severance pay and wages owed to them when the factory shut down.

Brilliant Alliance Thai Global (BAT) closed its factory in Samut Prakan province on March 10 citing financial losses caused by the COVID-19 pandemic, and workers and unions said they were given no warning or information about their wages or severance.

The company was this week told to pay 242.22 million baht ($7.81 million) to about 1,237 workers within 30 days or face a criminal lawsuit, according to Phongthep Petchsom, head of the Labour Protection and Welfare Office in Samut Prakan.

Under Thai labour law, companies that cease operations are required to give one month's notice and settle their financial commitments to workers, including wages, bonuses and severance.

"Since the start of the pandemic last year, this is probably the first case we have seen of a company suddenly closing down without severance pay and not providing payment to cover their notice period," Phongthep told the Thomson Reuters Foundation.

Thailand is fast returning to normalcy having recorded about 28,346 COVID-19 cases and 92 deaths to date, but government officials expect a slow economic recovery.

BAT, which is owned by the Hong Kong-based garment manufacturer Clover Group, said on Wednesday that it would settle all outstanding payments owed and severance pay with workers in monthly instalments starting by the end of April.

"It is not and has never been BAT's intention to walk away from the legal care and entitlement of employees," the company said in a statement.
BAT had supplied lingerie to major global brands including Lululemon, Torrid and Victoria's Secret, according to former workers and a list of buyers provided by the factory's union.

The three brands were not immediately available to comment.

Kornchanok Thanakhun, a union leader, said BAT asked workers in February to accept lower wages and benefits due to cancelled orders caused by the pandemic. Most rejected the plan, she said.

"As workers, we were exploited and stripped of our dignity," said Kornchanok, who had worked at the factory for 27 years.

Labour rights' activists globally have voiced concerns about companies capitalising on the pandemic as an opportunity to cut costs by coercing workers to accept worse terms and conditions.

The Solidarity Center, a U.S.-based workers rights' advocacy group, welcomed the compensation order, but said brands sourcing from the factory should contribute towards BAT's commitments.

"As the primary drivers of factory conditions, it's a legal fiction to say brands bear no responsibility to contributing to workers' legal entitlements when conditions they impose result in factory shutdowns," said its country director Dave Welsh.

Related stories:

Thai airport workers stage protest over labour conditions

Garment workers in Thailand receive full compensation after wages expose

Migrant workers suffer as coronavirus cases surge in Thailand

($1 = 31.0000 baht)

(Reporting by Nanchanok Wongsamuth @nanchanokw; Editing by Kieran Guilbert. Please credit the Thomson Reuters Foundation, the charitable arm of Thomson Reuters, that covers the lives of people around the world who struggle to live freely or fairly. Visit http://news.trust.org)

Our Standards: The Thomson Reuters Trust Principles.