Component of Thai National Policy on Homebased Workers   Suntaree  Saeng-ging Homenet Thailand

1)  Overview of the informal economy in Thailand

Studies conducted by the National Economic and Social Development Board (NESDB) find that the informal economy is very large, contributing almost as much to GDP as the formal economy (not including illegal activities). In 2001, the informal economy generated value amounting to 2.33 billion baht or 45.6 percent of GDP. Part of this contribution, about 33.3 percent, is accounted for in the GDP while the remaining 12 percent is unaccounted for.

There are an estimated 34.67 million employed persons in Thailand. Around 22.10 million persons—67.8 percent of all employed persons—work in the informal economy and outside the protection of the social security law. Of these, 42.1 percent work in the agricultural sector and 31.2 percent are employed off-farm.

Ministry of Labour ( MoL) statistics report that there were 8.52 million  workers employed in the country. The Social Security Fund (SSF) covers establishments with one or more workers. In January 2005, it had registered 7.84 million workers under its coverage.
A survey on the demand for social security for the year 2003 conducted by the National Statistical Office estimated that 24.9 million informal workers—about 70 percent of all employed persons—were outside social protection.

The legalised informal economy refers to the unregulated sector with limited protection; it is distinct from the illegal economy. The majority are small establishments such as household enterprises. Small farmers rely mainly on family labour and constitute a major source of employment and income for many of the underprivileged groups in society, especially those with less education, low skills and no capital.

Though these informal activities are not considered very productive, their numbers have recently swelled and are now growing rapidly. For example, the number of commuter motorcyclists in the Bangkok Metropolitan Area has increased over sevenfold in the past 20 years, i.e. the increase from 16,000 motorcycles and 1,570 stations in 1984 to 108,506 motorcycles and 4,440 stations in 2003. The number of street vendors has increased from 24,192 in 1986 to 25,653 in 1998. Entry into this business is quite easy as it does not require much capital. Between 1999 and 2001, the number of home workers has increased by about 80 percent, from 226,473 to 406,473 households. The majority of home workers are engaged in manufacturing, especially of textiles and garments. Community enterprises such as those the government supports through the One Tambon One Product (OTOP) policy generate employment and income for rural and urban communities.

Activities in the informal economy play an important role in the increase in production and employment for a large part of the population, around 50 percent of all employed persons. They are part of supply chains, providing labour, raw materials and intermediate products in the economic system, the starting ground of new entrepreneurs, and the provider of cheap, consumer products.

2)  Homenet Thailand, Network of and for Home-based Workers

Homenet Thailand consisting of home-based workers Network and Foundation for Labour and Employment Promotion of which is advocacy and movement NGO on informal workers, has been established in June 1992. Presently, the Network of Home-based workers composed of 151 groups of member, in 24 provinces all over Thailand, 80 are self employed groups, 31 are sub contracted workers groups, 14 are contact farming groups and 3 service sectors groups. The members included 6,637:  5,031 women and 1,606 men

            From the real situation of problems homebased workers encountering are being invisible bodies in society, lack of labour laws protection to get labour right standard, not access social security scheme, working with highly risk from irregular job, unfair wages, long hours of working and poor working conditions of which caused the problems and constraints on occupational safety and health (OSH), limitation of social protection system providing from the state and  the Lack of bargaining power

            On the Principle of  The ILO Homeworkers Convention No. 177 and Recommendation No. 184 declared in the Assembly Conference of International Labour Organization 83rd session in June 1996 at Geneva, Swisszerland   cited labour standard treat and desirable work condition adopted at homeworkers and the principle of Decent Work in the Informal Economy of (ILO) was presented at the annual International Labour Conference in 2002.It stated four fundamental areas of the ILO’s efforts to promote decent work.They are: labour rights, productive employment, social protection and socialdialogue

3)  Component of Thai National Policy on Homebased Workers 
           
            For a decade, Homenet Thailand works to advocate and promote the rights of homebased workers and informal workers in other sectors to make these marginal people visible to society wide and create movements to advocate Thai State on the issue solution policy including formulate pro-active protection policies and concerned laws issued for homebased workers and informal workers in every sectors. These are some of fruitful movement found in Thai National policies and legislation:
           
            3.1. Informal labour rights stated in 2008 Kingdom of Thailand Constitution:
            In Part 7 Economic Policy Article 84 as followed
            (7) Promoting people of working age to obtain employment, protecting child and woman labour, providing the system of labour relations and tripartite which entitling labours to elect their representatives, providing social security and ensuring labours working at equal value to obtain wages, benefits and welfares upon fair and indiscriminate basis.
     

       And in Part 6 of the Constitution Rights and Liberties in Occupation in Article 44 stated: A person shall enjoy the right to work safety and welfare and to living security irrespective of whether he is employed or unemployed in accordance with the provisions of the law.

          3.2   Policy of Government  and Minister of Labour  
            In the present Thai’s government and Minister of Labour declared on February 18, 2008 concerning informal labour in the next four year term as followed:
          No. 1 Policy on Social and Life quality  
                          1.2 Labour policy
                       (3) Labour protection in Thai Labour standard stress importantly and emphasizing on safe working environment and labour welfare by covering comprehensively to informal labour .
            In addition the current Minister of Labour has underlined the policy to Ministry of Labour’s officials to better and develop Thai labour in compliance with ILO essences and principle of Decent Work including having informal labour  added in No. 6 of the 16 ministerial policies. The No. 6 stated that: There is a need to accelerate to include informal labour into rights protection system to have social welfare, social security and proper remuneration equal to formal labour and extension social security to several types of occupations.

            3.3 Thai Occupational Safety and Health Policy
            According to Universal Health Care Acts 2002, the first people sector policy ad law advocated successfully with 20,000 petitions to propose for the policy in 1997. The Acts important principle is standard health care service for all Thai equally or Universal Coverage at no expense or free of charge. In the advocacy to issue this Acts, Workers is one of the nine Networks in People sectors. Homenet Thailand participated in administration of this Universal Health Care Acts and development of the Primary Care Unit (PCU) in her operational area. These PCU are pilot program to provide Occupational Safety and Health (OSH) by co-working with Environmental and Occupational Diseases Office, Department of Disease Control, Ministry of Public Health. In 2008 OSH policy is formally and officially adopted into this Office policy and working plan and become an indicator of  PCU operation and working standards.

3.4 Local Policy on Informal Labour
 In parallel and compatible with  PCU pilot establishment, Homenet Thailand work with Sub-district Administrative Organisation (SAO), Thai’s local administration to advocate for local policy and found the pilot SAO has understanding and envision to work with informal workers with working plan, budget allocation to support informal labour system for example; OSH, Clean Technology (CT), welfare for informal workers. In advocacy in national policy is still in Homenet Thailand vision and future advocacy plans.

3.5 Ministerial Regulations to provide protection to home workers
Based on the specific authorisation in the Labour Protection Act (LPA), the Ministry of Labour has drawn up Ministerial Regulations to provide protection to homeworkers and agricultural workers, effective 8 August 2004 and 13 April 2005 respectively. The protection given to these two groups of workers will need a different approach to that taken by the LPA.

The homeworkers to whom the 2004 Ministerial Regulation refers to are:
1. Workers who receive work contracts from an employer to produce,  
     assemble, repair or process;
2. Those who work at a location that is not the establishment of the employer;
3. Those who work to earn a wage;
4. Workers who use all or part of raw materials or production instruments of
     the employer;
5. Those who work, contracted to be performed at home, are a part or a whole
     of the production process or business in the responsibility of the employer.

This Ministerial Regulation has divided homeworkers into two main groups. These are first, those who use raw materials or tools of the employer will be employees under protection of the ministerial decree, and second, homeworkers who buy raw material or tools on their own, who will not receive protection from the Ministerial Regulation.
The Ministerial Regulation establishes certain protection for homeworkers. Employers who contract work to be performed at home must make a declaration to the labour inspectorate according to the requirements set by the Director General of the Social Welfare and Labour Protection Department. The employer must report by sending a letter seven days before delivering work and every time work is delivered thereafter. The report must contain the names and number of employees, the types of work performed the date of delivering work, the method of payment, and the workplace of the employees, the raw materials or instruments provided.

An employer who contracts work to be performed at home must make a written employment contract that must be signed by both the employer and the employee, and a copy of the contract must be given to the employee. The work contract must contain at least eight specified items. Any other items will depend on the agreement between the employer and employee and mentioned in the contract. The employer has the responsibility to pay the employee the wage according to time and location specified in the work contract within 15 days after the completed work is delivered. The employer has the right to deduct money from an employee’s wage in the following cases.

1. To pay personal income tax of the employee;
2. To pay debt to credit cooperative or welfare fund this benefits the employee, provided that the deduction is accepted by the employee;
3. To compensate for damages to machinery, equipment or raw materials of the employer caused by negligence of the employee, but with written agreement from the employee.
For 1 and 2, deduction cannot be over 10 percent for each item, and for all items must not be above 20 percent of wages unless with the agreement from employee.
Employers are prohibited from giving hazardous work to the employee, including work related to explosives or fi reworks, dangerous chemicals or poisonous materials, or cancerous substances, including 13 items under the supervision of the Minister of Labour and Social Welfare, such as benzene, chromium, etc.
Employers have the duty to oversee safety of the workplace by providing safety equipment and setting safety standards for home workers.

The Regulation also upholds home workers’ rights according to the LPA.
For example,
1. The employer must provide equal treatment of employment between men and women employees.
2. The employer must provide the same wage for the same work between men and women.
3. Sexual harassment of women and young workers by the employer, foreman, or supervisor is prohibited.
4. The employer has the duty to provide safety equipment as required by law.
5. The employment of children less than 15 years of age is prohibited.
6. The employee has the right to make a complaint with labour inspectors for disputes concerning wage payment or file a complaint in court.

Analysis of the Ministerial Regulation on Home Workers and ILO Convention No. 177

The ILO Homeworkers Convention No. 177 and Recommendation No.184, 1996, establish a definition for home workers and the perimeters for their protection. Home work is defined in the Convention, and can be summarised as:
1. Work carried out by a person, where:
■ The workplace is in the worker’s home or a place chosen by the
   homeworkers, but not the workplace of employer; and
            ■ Payment is received.No account is to be taken of who provides equipment,
                raw materials or other inputs for the work.
2. Homeworkers does not include:
■ Employees who occasionally take work home rather than working at the 
   Factory or establishment of the employer.
■ Persons who have the degree of autonomy and economic independence
   necessary to be considered self-employed under national laws.
3. “Employer” refers to an ordinary or legal person who contracts out
                work, directly or through an intermediary.

The scope of Thai law has at least two shortcomings as compared with Convention No. 177.

First, it defines the employer as one who provides raw materials and working equipment; the ILO Convention does not set this requirement, specifically conveying homeworker status “irrespective of who provides the equipment, materials or other inputs used”.
Second, Thai law does not define the employer to include an intermediary; Convention No. 177 defines the term employer as “a person, natural or legal, who, either directly or through an intermediary, whether or not intermediaries are provided for in national legislation, gives out home work in pursuance of his or her business activity”.

In order to protect the rights of homeworkers, Convention No. 177 proposes that a national policy on home work be formulated to promote equal treatment between homeworkers and other wage employment, especially with respect to:
(a) the rights of homeworkers to establish or join organizations of their own
     choice and to participate in the activities of such organizations;
(b) protection against discrimination in employment and occupation;
(c) protection in the field of OSH;
(d) remuneration;
(e) statutory social security protection;
(f) access to training;
(g) minimum age for admission to employment or work; and
(h) maternity protection.
An examination of the Ministerial Regulation and the Social Security Act (SSA) reveals that Thai law does not provide home workers with protection in the areas of remuneration, training, social security or maternity leave. Indeed, the bulk of the Ministerial Regulation’s content does not enhance the protection of homeworkers.
Discussions with homeworkers reveal a lack of understanding about the objective of the law, as some homeworkers see this law as a way to register home workers just so that taxes or social security contributions can be collected. This is perceived to be the overriding objective since in practice employees may not comply with the particular requirements under the written contract because it is complicated and the employer is not accustomed to the requirements. If the employer refuses to make written contracts, the employee or home worker may well not demand them, fearing that the employer will retaliate by reducing or ending work orders. Finally, most homeworkers cannot find their employer so that written contracts can be made, since most homeworkers get orders through an intermediary and not directly from the factory.

In December 2004, a training workshop for labour inspectors was organized by the Department of Labour Protection and Welfare to prepare for enforcement of the new Ministerial Regulations. The following problems and obstacles in labour inspection among homeworkers were identified at the training workshop:
1. The labour inspector will potentially have a problem deciding whether he or she has the authority to act if an employee comes to file a complaint since authority is based on geographic jurisdiction to issue an order or bring a case to court
2. Labour inspectors lack knowledge about and an understanding of home workers, and guidelines for enforcement are unclear. For example, it is unclear whether or not intermediaries are employers of the employee, or whether labour inspectors have the power to go and inspect the workplace since the residence and workplace are identical.
3. Homeworkers’ workplaces are difficult to access. They are often very far away and widely dispersed; working hours are very irregular. These factors prevent labour inspectors from carrying out their duties effectively.
4. Employers do not cooperate. They prohibit their employees from revealing information on employment, suspecting that the authorities will use this information to collect taxes and/or social security contributions, or for trade competition.
5. Employers may feel that these provisions increase administrative burdens by, for example, requiring the preparation reports to inspectors or written work contracts. Employers are also obliged to have permission before sending hazardous work out to home workers.
6. Not wanting to be bound by written contracts which may be used in court, employees do not cooperate in preparing them. They wish to avoid having to pay taxes on the basis of such contracts.
7. Target groups do not understand the benefits found in labour protection rights and feel that a written contract puts them at a disadvantage.
8. There is currently no information on employees and employers. Individual employees have no information about their employer benefiting from their work, and homeworkers do not give information about their activities.
9. Inspection processes need to be conducted twice since employers and employees are situated in different locations and current inspection forms are inapplicable.
Finally, the Labour Protection Bureau of the Labour and Social Welfare Department is responsible for the enforcement of the law. Without close cooperation with the Employment Department of the Ministry, the work of the Bureau protecting rights in line with the Ministerial Regulation may have an impact on homeworkers’ employment security and organization; that is, employers and home workers might find it difficult to maintain the employment for fear that compliance with the Ministerial Regulation will increase the cost of labour (e.g. OSH equipment) as well as taxation. Therefore, the work on employment promotion e.g. orders, marketing, skills development and loans, will be necessary for both home workers and employers.

4)  Homenet Thailand and demand for extending of the Homeworkers Protection law

            Although Homenet Thailand successfully pushed to have 2003 and 2004 ministerial regulations for homeworkers and agricultural labour as the two first laws, but limitation is still high. In case, there is no clear, particularly, the definition of ‘homeworkers’ and the regulations cover only workers whom working on employer’s raw materials and tools, in case of  ministerial regulations for homeworkers and not cover ‘contracting farmers’ in case of ministerial regulations for agricultural labour.  There are also important elements, for instances, unfair pay and access to Social Security Fund (SSF) that not protect by these ministerial regulations. Including to no effective implementation comply the ministerial regulations.
Homenet Thailand and their alliances see the needs and demands and continue advocate for improvement of the ministry implementation and law amendments.

4.1 Draft and advocate on Homeworkers Protection and Promotion Act.
Based on Decent Work, the ILO Home Workers Convention No. 177 and Recommendation No.184, and fundamental rights of labour to eliminate all limitations of ministerial regulations for homeworkers, These are the essences of the Act, Homenet Thailand’s Draft:
- Redefinition of homeworkers to cover their family members who be workers’ assistances and improve the definitions of employer or hirer in order to clarify and classify all forms of hiring or job hand on in case work-hand-on persons who do not aim to earn monetarily from the business and on the purposes of work distribution and occupational assistances and promotion. Definitions must as well cover patterns and types and contract of home work, for instances; raw material supplying to homeworkers, sale the raw material and buying product, or the same or similar types of contract made to those.
- Stipulate fair wage payment administration based on decent work principle. In order to have administration and re-classify and re-scaled the payment of same decent work to have the same and similar in value and quantity.
- Stipulate conceptual and principle of protection, promotion and development within the labour law. The concept of the Promotion and Development must include access to information, technology, skills, credit loans, capital funds and organisation development, in order that homeworkers are being strengthened through their occupations and resulting in security work and quality life.
- Stipulate more responsibility from employer side on health and safer working environment and on any sickness, disability and death caused from work, besides prohibition of hazardous material and chemical substance delivery and preparation of personal prevention equipment that already indicated in the 2003 regulation.
- Stipulate and set up two committees as national mechanisms, in order to work out at policy level and supervise law enforcement, and a local committee to work on labour conflict and bargain. The local committee must compose of homeworkers representatives, employers, attorney, lawyer, academia, Non-Governmental Organisation and related authorities.
           
            Movement on the Act demanded:
            In the same time, when  Homenet and are drafting demanded Amendment , MoL as well has their draft. The difference is concept and major principle. MoL’s draft still have unclear definition of employer and pattern of work. There is no fair pay protection and promotion and development of homeworkers, no labour bargain and conflict mechanism. Thus Home Net and the Working Group on Law  organised series of  the exchanging forums with MoL’s Office of Secretary on November 29, 2006, February 19, March 20 and April 3, 2007  and also two meetings with the Minister  on February 28 and March 18, 2007.
           

In the mean time, Thai’s temporary Constitution 2007 has stipulated the submission of the new law to National Council (NC) in three channels to issue new laws:
            - Ministry who authorise the law issue propose the Draft to the Cabinet for principle acceptance and the NC work on it before announce the effective date and enforcement of the law of which MoL has processed and the Cabinet accept the law since April 24, 2007
            -  At minimum NC member number 25 propose the Draft law to NC to review and announce the effective of the law.
            - The Commission of Labour and Social Welfare submitted the Draft to the Parliament of which Homenet Thailand utilize this channel through the Commission Chair since April 25, 2007 for considering and effectiveness of the law.
            After May 21, 2007, the Meeting of the Commission appointed the sub committee to work on the Draft since June 18 and 20, 2007 with the meeting of the Homenet representatives and the MoL representatives to integrate and modified the two Drafts on August 1, 2007. However the Homenet representatives and had a meeting with the Decree Committee whom considering the Drafts and agree to support the Homenet’s Draft on decent work principle and confirmed their support to the Cabinet.
In the mean time, the Decree Committee and NC and all the law issuing procedure have been stopped and suspended by the election law according to Thailand 2007’s Constitution the new parliament, Now both of representatives and senators, just start working this month March 2008. Homenet Thailand and its’ alliances, movement on the informal labour law demanding must plan on the further movement in the new parliament and might have MoL and the former Decree Committee in the process. Or by applying the new Constitution’s citizen’s rights to perform the 10,000 petition procedure to advocate the laws.

4.2 Demand on extending Social Security Scheme to informal labour

Extending of law proposed by Homenet Thailand
Homenet Thailand keep on co-working on the demand to fix the extending part on these following concepts:
1.  Based on fundamental principle of equally shares of all happy and suffer of workers, included all informal workers from every occupational groups in to the Social Security Scheme (SSS) and rate the contribution by income-based basis and receive social protection and welfare in their worst time.
2. State and employer must be responsible for another contribution parts to SSS.
3. Based on equal treat and non discrimination among labour, formal and informal. Workers of all occupational categories working in the informal economy should be covered by the amendment of the Social Security Act. The social security system must provides cover all seven types to informal workers;  sickness, disability, death, maternity leave, child allowance, pension and unemployment including to work-related injuries and diseases, must included in the compensation fund. Contribution rate must not over 5 percent of income.
                4. Homeworkers and contracting farmers and other informal workers  who are facing challenging from risks, from no social security must be the first few groups that should access to the socials security system.
5. Social Security Office must design funding administration of the fund to establish, emphasizing on participation of the informal workers as the true owner of the fund.
            6. Social Security Office, Ministry of Treasurer and concerned authorities must support community welfare system as another social security system for the informal workers and citizen.

Present situation of the extended law

From non-stop movement of Homenet Thailand, Social Security Office has prepared for the extending law since 2004 and set up two sub-committee to work on the extending law; 1) A sub-commitee for feasibility study on the extending social security law,  and 2) A sub-committee for drafting the extending law, respectively. Both sub-committees have Homenet Thailand’s representatives’ participation.  The sub-committee draft all about privilege, rate of contribution to the SSF and open to get the voice heard and participation from parts of the homeworkers. Draft has been revised several times. The first draft contained details contradicted to some fundamental concepts of social security according to politic influences over policy formulation, for instance, 1) voluntary enter which trend to have a risk that the only poorer economic status of informal workers group would see the importance to enter the SSS. 2) Only the informal workers would send their contribution to the SSF but none from the state and employers, and 3. Start implementing in case of elderly case in the form of financial management on informal workers saving, in fact the informal workers have the same risks as formal workers have now.
The political changes in September 2006 open a new opportunity for the second sub-committee to develop the latest draft as detailed 1) agreed to recruit all informal labour into the formal social security and SSF system on the principle of equal treat and non discrimination. 2) Contribution rate to SSF on income-based basis at about 4.5-5 percent of the income and certainly based on the study of groups/ sectors of estimate income of informal labour, 3) Contribution from government and 4) The concept of compensation of earning deficit from sickness, maternity leave of which a very progressive concept at this stage.

Because of worry about government budget allocation on the contribution, sustainability of the fund and the convenience in funding administration and management, these lead Social Security Office go back to adopt the extension and promotion of social insurance to informal workers stated in Article 40 in the former Social Security Acts 1990. The former Acts opened to insured person voluntarily as referred to person whom are not define as employee by 1998 Labour Acts. Insured persons must pay his/her contribution at 3,360 baht annually. This is in order to have protection in cases of death, disability and maternity/ child delivery. These are not really cover and respond to the real situation of the informal workers. Yet this has made the several years work of Social Security Office and People Sector movement gone waste. Homenet Thailand must determine future movement and advocacy strategy with her partners; informal workers in every sectors

5.  Conclusion
       

   It could say that all of the present major Labour Acts of Thailand; Labour Protection ACT 1998 , Labour Relation ACT 1975, Workmen Compensation Act 1994  และ Social Security Act 1990,  do not cover informal workers in informal economy. They get struck fast within the old fashioned labor relation concepts, for instance, considering controlling and supervision and administration of employer, considering production inputs ownership, i.e. tools, equipments and raw material, and considering the purposes of the production for wages. In the present, the relationship has been shifted to other complicate forms to avoid responsibility and take advantage on the weakest and the gap of labour laws. These four laws are outdated and excluded more than half of Thai’s labour from the protection of the law and society.
            From their own awareness and demands to help each others, these in formal workers set up their own groups and network. They demand on nothing more than the fundamental rights of labour, with strong support from academia, labour lawyers, NGO and ILO.  The movement of labour protection alliances has brought about the great changes in labour protection concept in Thailand and in the progress of pushing the new draft to legislation procedure and law issue.
            However, the capacity of state mechanisms is still limited with the new vision, concepts and put-into-practices by concerned authorities i.e. MoL, Social Security Office and the Parliament. The questions on how the new draft, after the amended law effective, how it could be efficiently and effectively implement concretely and tangibly. Homenet Thailand and her alliance must work harder on that movement in putting this new law on the ground serving their purposes.

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