Both sides say their actions are taken out of economic necessity. What would be the best way to settle disputes between employers and employees in this time of crisis?

It was no fun, said Koon, a young man from Khon Kaen province, to stand outside his workplace at the Michelin Siam Company in Chon Buri late last month with around 380 workers and demand that the company not make a large cut in salaries.

'I want to go back to work, but how can I survive if my salary is cut by 13%? Even if I live simply, what I earn now isn't enough to have a decent life,'' said Mr Koon, who has always considered himself a good, loyal employee of the company. The company did not make clear if it would honour a promise to pay a bonus in April.

His salary was 7,750 baht a month in January this year, but his March salary slip shows a salary of 6,740 baht, a net decrease of 13%. After taxes and other deductions he took home only 5,556.75 baht.

Mr Koon pays about 2,000 baht a month for a rented room, plus electricity and water. He also sends about 2,000 baht to his parents back home in Khon Kaen. He would like to send them more.

Normally he relies on overtime payments and other incentives to take care of his food and other daily expenses, but the company has also put a halt to overtime.

''Sometimes, I want to have a second plate of rice, but it will cost me another 30 baht, so I often tell myself to stop,'' said Mr Koon, whose plight is shared by millions of workers in Thailand who have seen their earnings slashed in the current economic downturn.

This includes many workers at Canadoil Asia Company, a Canadian-owned company which before a recent agreement was reached locked out 480 workers from its factory (from Jan 23 to April 27) in Rayong because of a decision by management to cut overtime and a failure to pay the year-end bonus.

The company dismissed 78 of the workers who it said organised a separate protest inside the factory. A court decision on their dismissal is pending.

Both Michelin Siam and Canadoil have released similar statements to justify their payroll cost-saving measures.

Clearly, the workers and employers stand on different sides of the issue.

Both companies say this is the wrong time for workers to make demands, citing economic reasons. Both companies can make compelling arguments about the worldwide economic crisis _ resulting in plummetting sales of their products and higher marketing costs _ to defend their decisions to cut payrolls.

Workers at the two companies, on the other hand, maintain that falling sales are not as drastic as management claims and cannot justify the companies' actions.

Canadoil workers formed a union in 2005; Michelin Siam workers organised a similar body, but the effort was aborted many years ago. Recently, after there was no agreement in initial negotations over the pay cut, Michelin workers registered their new union on March 29 at the Chon Buri Labour Provincial Office.

It took more than three months for Canadoil and its employees to be able to settle their differences and more than a month for any agreement to be reached between Michelin Siam employees and employers. What has gone wrong with the process of labour dispute management in Thailand?

COMMUNICATION BREAKDOWN

In principle, the collective bargaining mechanism should begin when a dispute first emerges, and both unions and employers' representatives must play their roles in the dialogue and honour their agreements.

The reality for Canadoil workers is that they were forced to protest outside their own company for months before any level of dialogue was achieved. They made many attempts to make their voices and demands heard.

Candadoil, for its part, exercised its right to lock-out employees, as is allowed by relevant laws on labour relations.

An initial agreement was reached on March 13 through a tripartite dialogue witnessed by an adviser to the labour minister. However, the owners of Canadoil later stated that the managing director, the company representative at the tripartite meeting, was not authorised by the company to make the agreement, citing Articles 5 and 13 of the 1975 Work Relations Act (see box).

Workers pointed out that the MD had the power to dismiss workers and sign memos in the factory.

In an interview with Spectrum Giacomo Sozziits, CEO of the Canadoil Group, said the MD's agreement in the tripartite meeting was not legally binding. He said his company intended to bridge the gap between employers and employees and affirmed that the company would stop the lock-out on April 28. He also wanted the workers to give up their strike as well.

The company did lift the lock-out on April 28, and agreed to pay the workers from March 16. There will be no overtime and there was no mention of last year's bonus. Basically, the workers withdrew their demands so they could go back to work, but many are bitter at the failure of Canadoil to make concessions. The agreements were written up and signed by each individual worker.

During the initial Michelin negotiations which began on April 20 at the Department of Labour Protection and Welfare, workers were also yielding, proposing that the 13% base salary cut should remain until October 2009, at which time a revision of the performance of the company would determine whether the cut should stand. The employers then proposed a 35% pay cut for workers who participated in the protest, resulting in a failure to reach an agreement.

The workers were disheartened. Feeling their collective bargaining rights were undermined by such a proposal, they became determined to go on strike.

Namthip Sampaoprasert, Michelin Country communication manager, explained the reasoning for the 35% pay reduction proposal was derived from a calculation that worldwide the car-making business would decline by 35% to 40%.

The company filed legal charges against protesting workers for blocking the entrance to the factory and 20 workers were jailed on April 27. A new round of negotiations was started on April 28, and an agreement was reached the same day. It was agreed that the pay cut would last for six months, and the company agreed to pay a two-month bonus as promised. The company also agreed to reinstate the workers and not pursue civil and criminal charges against workers.

Workers are afraid the employers may have fixed ''loopholes'' into the agreement, such as allowing individuals within the company, though not the company itself, to file charges against workers.

CHANGING RELATIONSHIP

Since the onset of the latest economic meltdown, Thailand has seen an increase in strikes and other demonstrations of labour dissatisfaction due to unfair lay-offs and pay cuts, incentives and overtime, usually without prior notice to workers. The strikes have resulted not only in more lost wages for the workers, but also lost productivity for the companies involved.

Both sides of the equation seem set in their positions and insist on their rights, which often results in failed negotiations.

The nature of labour-related actions also appears to be changing, and many employers say protesters are becoming more aggressive. ''How could gentle Thai people turn to violence?'' asked one.

The protesting employees themselves are likely to say this is because of untreated structural problems in society and the flaunting of the concerned labour laws through the use of loopholes.

Some employers, on the other hand, along with some government officials, feel there is ''someone pulling the strings'' behind the relatively recent emergence of labour conflicts in the country.

''Some employers, particularly in the Eastern region, believe that 'certain people' are behind the labour disputes,'' said Arthit Isamo, deputy director-general of the Labour Protection and Welfare Department. He said that sometimes the problems in that region have escalated because some workers insist too much on their rights.

''I want workers to know not only their rights, but their duties,'' he said, adding that even if Thailand ratifies International Labour Organisation convention Articles 87 and 98, it won't necessarily improve labour dispute resolution in the country.

''What good is it if we ratify the convention but cannot put it into practice?'' he asked.

He feels the disputes could be solved if both sides respect the other's rights and know when to compromise in the Thai style.

''Employers want their workers to have the traditional Thai consideration known as nam jai.''

Others, however, feel that the saga of labour dispute resolution reveals the current state of development of Thai society and people. Labour experts such as Voravit Charoenlert and Narong Pectprasert firmly believe that disputes can and should be solved through the mechanisms of dialogue, mediation and conciliation _ the indicators of properly developed labour relations. Collective bargaining is a means to promote peaceful and just solutions for all concerned parties.

However, say the labour experts, many employers refuse to settle their labour disputes through negotiation, but choose lawsuits instead.

Mr Narong, a Chulalongkorn University lecturer in economics, expressed his concern over this strategy. ''Pushing the disputes to court marks the demise of work relations,'' he said, adding that it is prohibitively costly and time consuming for workers to fight in court.

He pointed out that most labour organisations have no lawyers of their own, whereas the employers are equipped with all manner of resources to fight against workers, and added that the chance for workers to win a court battle is very slim.

He said that in Thailand the labour movement has been weakened because of a lack of education of workers as to their rights.

''Apart from state enterprise employees, the majority of the workers are engaging in very long work hours. They would not earn enough to make ends meet if they relied on their base salary.

''Therefore, many of them depend on overtime payments. They do not have enough time to get organised and study the labour laws.''

Mr Narong said there are many loopholes in labour laws due to the inequalities inherent in society. Among them is the legitimacy of acceptable advisers.

''Well intentioned people who want to help workers must officially register with the Ministry of Labour or else they won't be accepted by all concerned parties.''

Regarding advisers, he also remarked that ''the voice of those who have 10 baht and 10 million baht is different''.

Both Mr Narong and Mr Voravit share concerns over the system of company-based unions. They want the labour laws to allow people who work in different companies but in a similar line of business or industry to register under an inclusive union, much like the steelworkers or electricians unions in the United States.

Industry-wide unions are commonplace in the West. With many more members such unions can obviously collect much more money, which helps in strengthening the labour movement and in providing financial and educational programmes for union members.

As well, said Mr Narong: '''You can hire many good lawyers and union workers.''

A wider membership also means more negotiation power and a stronger leadership for blue collar workers, who make up the majority of the workforce in Thailand.

''Presently we have too many small unions, and unfortunately many of these are inactive,'' said Mr Narong.

Mr Voravit, a lecturer in economics at Chiang Mai University, said the lack of industry-wide unions is a structural problem in Thailand that has crippled both the workers' power of negotiation and power to amend the laws.

''This is the way to strengthen the power of the labour movement,'' he said, adding that labour unions benefit both employers and employees.

Good work relations are a social tool to smooth the operation of a workplace. They bridge the gap of understanding between employers and employees through two-way communications.

The other party in labour relations is the government.

''Our government should have a far-sighted vision in promoting the operation of labour unions and effective work relations; this will build a new image for investment in the country,'' said Mr Voravit.

Unfortunately, he remarked, many government officials do not understand why it is crucial that workers be allowed to unite. Many have the mentality that social and political stability means a lack of dissent and that workers should yield to the demands of employers, as this will please the investors.

''But social security for workers is also crucial. Workers deserve to have a decent living through the strength of their unions and negotiation,'' Mr Voravit said.

He said it was a paradox that the government encourages spending for economic growth but lacks measures to assist workers who are facing lay-offs and pay cuts. It also fails to provide incentives for workers.

''How can people spend when they have no income or when their wages are reduced,'' he asked, adding that the major portion of domestic spending is derived from working people. Good work relations, he said, will facilitate social justice for both employers and employees.

''This will bring understanding and create a better workplace, and finally yield a high performance.''