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How will the law curtail the impact of some practices of employment outsourcing?

The Labour Protection Act (LPA) (second edition) B E 2551 brings, in effect, few minor points.

The most crucial part is in Section 11(1), which states, "The entrepreneurs shall see to it that the indirectly employed workers who perform the same work with directly employed workers are given fair rights, interests and fringe benefits without discrimination."

It is the same as Sections 5 and 12 of the LPA B E 2541 put together. The second paragraph requires employers to bear the extra cost of providing fair compensation (rights, interests and fringe benefits) to indirectly employed workers who are assigned work of similar nature. To some people, savings on labour cost disappear. But fair compensation does not necessarily mean equal or same wages. Many workers performing work of similar nature may be given greater rights, interests and fringe benefits because of their longer service years, or because of their higher classification based on work experience rather than education level.

Reactions to Section 11(1) of the law vary. For instance, Western Digital has revised the positions of all 9,000 indirect workers and made them its directly employed staff. Other companies are adjusting outsourced work to be done separately by directly employed personnel, reducing the number and shortening contracts with their labour suppliers.

Some work will be subcontracted out and performed by freelancers or subcontractors in separate work places.

  Active trade unions in the Eastern Seaboard area have been demanding that their employers treat indirectly employed workers at par with their members. This will be particularly difficult for the automotive, electrical and electronics industries, where outsourced labour far exceeds the number of directly employed workers.

The cost of providing fixed  four to six months' bonus for everyone may be difficult to bear. The next six months will see tough negotiations.

Only good industrial-relations practices will allow sufficient time for adjustment.