The fate of the aviation industry in the competitiveness system and pandemic era, Thai Airways International's rehabilitation plan implies massive layoffs.

The layoffs of outsourcing company to reduce costs

The layoff of 2,598 employees of Wingspan Services Co., Ltd., a subsidiary of Thai Airways International Public Company Limited (THAI), on August 31, 2020, shows us the true role of outsourced workers in the aviation business under the capitalism’s competitiveness and pandemic era.

In May 2020, Wing Span Co., Ltd. laid off 896 employees. That was the first time of its history. It claimed that it was hugely affected by the government's lockdown measure to contain Covid-19 causing the company to temporarily shut down since April. These dismissed employees already received compensation, Amphai Wiwatthanasathapat, a union president of the Wingspan and Aviation Workers Union of Thailand (WWU) said.

Ampai anticipated that sooner or later it would come again. The second wave of job termination of outsourced employees takes effect on September 1, 2020, just one day after employees received an online text from their coordinators (leader). Now, the company claims it is facing the severe lack of liquidity. But what is unexpected is that the company would delay paying compensation by expanding it a period of one year or until the company have sufficient liquidity. This measure will make dismissed employees and their families sink deeper and deeper into troubles. Wingspan workers union, therefore, calls for the government to finance the cash handouts for dismissed employees, not only using benefits under the Social Security System. The company must expedite to pay compensation so that the employees can utilize it in pursuing a new career. And when the airline can proceed with its rehabilitation plan, they should be granted the previous positions immediately. They have suffered from the outsourcing company’s costs-cutting measures for a long time. They are enduring unstable employment, discrimination, fewer benefits than permanent state-owned enterprise employees of Thai Airways. But when the COVID-19 hit the country, they are the first group as outsourced workers to make sacrifices as for the airline to carry on operation. That is why they feel it is unjust for them to bear these consequences of Covid-19 regarding lockdown.

While Thai Airways owes Wingspan for more than 200 million baht (6.4 million USD) from accrued wages since 2015, Ampai says Wingspan company argues that it cannot bear the cost even if employees furloughed receive 62% of their basic wages from the Social Security Fund for 5 months.

Workers union’s demand to involve the rehabilitation plan of Thai Airways

The interview of Mr. Sawit Kaewwan, Secretary-General of the State Enterprises Workers Relations Confederation (SERC) revealed that the layoff of 2,598 outsourced workers was aimed at cutting the cost of Thai Airways, which was holding shares in the Wingspan Services company. In fact, the downfall of Thai Airways was caused by mismanagement and corruption within this state owned-enterprise. The findings of investigation by his union correspond to those of a working group headed by Deputy Transport Minister Thaworn Senneam set up to investigate Thai Airways International’s management. Their findings showed that Thai Airways accumulated losses for many consecutive years beginning in 2008 with the purchase of 10 Airbus aircraft to fly to the United State, but they could not make a profit. It was also from setting up Thai Smile Airways to compete with other low-cost airlines and air ticket agents that Thai Airways had to share the market, but at the end it was unsuccessful and brought it to bankruptcy.

SERC, therefore, proposed their rehabilitation plan for Thai Airways in parallel with the plan of committees formed by the company. SERC proposed five strategies; one of them is to reduce business costs, tackle corruption in the management, harsh punishment on corrupted executives and reduce wages and positions of the senior management, and so on.

In addition, there are 6 proposals to the government: 1. To maintain Thai Airways as a national carrier for the sake of the country to promote tourism and stimulate the economy in times of crisis; 2. To maintain the right to the routes of Thai Airways; 3. To establish a good governance system in order to prevent political influence and intervention; 4. To build participation in safeguarding the interests of Thai Airways; 5. To remain the employment of Thai Airways workers and employees of Wingspan Services Company; and 6. Employees and their unions must be involved in THAI’s rehabilitation plan.

As for the Thai Airways State Enterprise Workers’ Union’s status at this moment, since the Ministry of Finance has withdrawn its shares in THAI that led to the end of the state-owned enterprise status, the Ministry of Labour revoked the union’s registration at once. SERC sees that the withdrawal of the union’s status does not comply with international labour standards. However, there are four Thai Airways workers’ unions. Sawit views that it is necessary to coordinate with each other to achieve unity for the public interest.

Challenges of Thai government

Regarding the world situation of the aviation industry amidst the pandemic, many companies have laid off employees and have been asking the government to provide financial assistance to airlines facing huge loss and bankruptcy and to prevent job cuts as many as possible. However, in laying off workers, airlines in Europe as in Britain have consultation protocol with trade unions before making a decision and ask the government to help pay workers’ salaries to delay the impact. While in Thailand, outsourced and contract workers are considered a top priority for job cuts and there is no consultation with the trade union, says Sawit. The aviation business’s rehabilitation can take four to five years; that’s why workers need the government’s urgent help.

Ampai reiterates that Wingspan Services have been founded in 2010 to supply human resources to Thai Airways. However, the form of employment, rights, and benefits are not equal to permanent state-owned enterprise employees. Yet the Wingspan employees always demand more stable jobs. In this COVID-19 epidemic crisis, it has impacted not only on the laid-off employees but also their families. A member of the Wingspan workers’ union says that if the compensation is calculated based on her 6-year term of employment, including one-month advance notice pay, she will get paid around 80,000 baht (2,567 USD) only. If there is a delay in payment, she will not be able to invest for her new job, or it will be more damage if the payment comes in installments. As she is old (50 years), there is probably no employer to recruit her to work. Therefore, she hopes to re-employed at Thai Airways when the airline resumes the operation.

Thailand’s aviation industry does not mean only Thai Airways but also all Thai airports. With respect to that, there are still outsourcing companies in other state-owned enterprises of those converted to public companies. There has been recently an unfair dismissal of a group of outsourced employees from a company which supplies airport personnel to Airports of Thailand Public Company (AoT), a female worker says. And Ampai has brought this group of hundred airport employees to file complaints to the Ministry of Labour and the Social Security Office because their employer has informed these government agencies that they have resigned from the company which is wrong, as it is actually the termination of the continuing employment contract and the employer has wanted to avoid paying compensation. All these issues challenge the government on how to tackle layoffs and protect people’s jobs.

The state-owned enterprises of those converted to public companies means that shareholdings by the Ministry of Finance were less than 51% and the private sector was allowed to manage the state’s affairs and bear risk. Consequently, state-owned enterprises reduced regular employees while they have hired more outsourced workers during 15-20 years due to the government's policy to increase competitiveness.

หมายเหตุ: เผยแพร่ครั้งแรกที่ Thai Labour Watch