Report in which the committee requests to be kept informed of development - Report No 329, November 2002

Case No 2181 (Thailand) - Complaint date: 18-FEB-02 - Closed

Allegations: The complainant alleges that the Government cancelled its registration and dissolved it as a result of a change of status, from public to private company.

1. 740. The complaint is set out in communications dated 18 February and 10 May 2002 from the Bangchak Petroleum Public Co. Ltd. Employees’ Union (BCPEU).
2. 741. The Government submitted its reply in communications dated 17 May and 7 October 2002.
3. 742. Thailand has not ratified the Freedom of Association and Protection of the Right to Organise Convention, 1948 (No. 87), the Right to Organise and Collective Bargaining Convention, 1949 (No. 98), nor the Labour Relations (Public Service) Convention, 1978 (No. 151).

A. The complainant’s allegations

1. 743. In its communication of 18 February 2002, the BCPEU alleges that it had been formally registered on 25 January 2001 (Registration Certificate No. SorRorRor 54) as a legal trade union of Bangchak Petroleum Public Co. Ltd., under the State Enterprises Labour Relations Act, 2000 (SELRA 2000), with Mr. Sobhon Thamrongpholtheeraphap as President. Its registration was revoked by the Department of Labour Protection and Welfare (DLPW) of the Ministry of Labour Protection and Social Welfare (MOLSW) on 26 December 2001. The complainant describes the sequence of events as follows.
2. 744. On 11 September 2001, the management of the Petroleum Authority of Thailand – Exploration (PTT-EP) asked the DLPW whether it would still be considered a state enterprise under article 6(2) of SELRA 2000, when its parent company, the Petroleum Authority of Thailand (PTT), would be changed into a private company on 1 October 2001. On 4 October 2001, the DLPW replied that PTT-EP was no longer a state enterprise, covered as such by the SELRA 2000, and would be covered by the law governing private sector enterprises, i.e. the Labour Relations Act of 1975.
3. 745. On 12 October 2001, the Acting Managing Director of the Bangchak Petroleum Public Co. Ltd. wrote to the Ministry, asking: (1) whether the company was still considered a state enterprise covered by the SELRA 2000; (2) if not, which labour law applied, and from what date; and (3) whether the BCPEU was still considered as a union under the SELRA 2000 and, if not, its effective date of dissolution.
4. 746. On 28 October 2001, the President of the BCPEU wrote to the Ministry, arguing that the union should be considered as a state enterprise union, given the intent of the SELRA 2000. The President of the company, Mr. Narong Boonyasaguan, also stated publicly on 22 April 2002, in the context of a request for a 3 billion bahts bail-out/debt restructuring addressed to the Government, that “… as the company was state-owned, he was certain the Government would never let it collapse”.
5. 747. On 3 November 2001, representatives of the company and of the BCPEU, along with officials of the Ministry, met to discuss a labour dispute arising from the collective bargaining demands made by BCPEU under the SELRA 2000 on 1 October 2001, at which time a copy of the demands had been sent to the authorities. The management of the company refused to bargain collectively with the union, stating they wanted first to know whether the union had the right to submit such demands and whether the company was still considered a state enterprise. The meeting concluded with government officials present stating they would seek a legal opinion from the Council of State.
6. 748. On 28 November 2001, the Ministry of Finance informed the Ministry of Labour that it still viewed the company as a state enterprise under the Budget Procedures Act of 1959. However, on 24 December 2001, the Council of State informed the Ministry of Labour that the company was not covered by the SELRA 2000 and that the registration of the BCPEU should therefore be revoked. On 26 December 2001, the registration of the BCPEU was revoked as of 1 October 2001. That decision was notified the same day to the President of the BCPEU, stating further that the union would have to be newly organized, under the Labour Relations Act of 1975.
7. 749. The BCPEU submits that its right to exist should not be tied to the status of the employer as a public or private concern since its representational activities and duties have not changed in any way. It argues that the intent of the Ministry is to use the legal classification of employers to destroy this union and perhaps, in the future, other state enterprises in Thailand. The revocation of BCPEU’s registration had a direct impact on collective bargaining efforts under way with the employer, as shown by the management’s refusal to bargain at the meeting on 3 November 2001. Furthermore, it is now unclear whether the previously negotiated terms and conditions of employment are still in force, and the workers are greatly concerned that the employer will take unilateral action to reduce wages and benefits without negotiating with the union.
8. 750. In its communication of 10 May 2002, the BCPEU adds that, on 7 January 2002, it complained about this situation to the Parliamentary Committee on Labour and Social Welfare, thereby initiating an investigative process. On 30 January 2002, the Chairman of that Committee met with representatives of the BCPEU and of various government agencies concerned with the issue. The two main conclusions of the Committee, issued on 10 April 2002, were that the change in shareholders at the company did not impact on its status as a state enterprise and therefore, that there should be no change in BCPEU status as a state enterprise union.

B. The Government’s reply

1. 751. In its communication of 17 May 2002, the Government confirms that the BCPEU was registered on 25 January 2001 under the SELRA 2000, as a legal union of employees of the Bangchak Petroleum Public Co. Ltd. The shareholders of the company were then: the Ministry of Finance (47.87 per cent); the Petroleum Authority of Thailand (PTT, 24.29 per cent); the Krung Thai Bank Public Co. Ltd. (7.86 per cent); and “others” (20 per cent). As the Ministry of Finance and the PTT held together more than 50 per cent of the stock, the company had the status of state enterprise under article 6(2) of the SELRA 2000.
2. 752. On 25 September 2001, the Cabinet adopted a resolution creating the Thai Petroleum Public Company Ltd. The Cabinet also approved the conversion of PTT’s capital into shares of the newly created Thai Petroleum Public Company Ltd., which was registered on 1 October 2001 as a limited public company, the sole shareholder of which was now the Ministry of Finance. Under article 24 of the State Enterprise Capital Act of 1999, all rights, assets and liabilities of PTT, including its 24.29 per cent share capital of the Bangchak Petroleum Public Co. Ltd., were transferred to the Thai Petroleum Public Company Ltd., effective 1 October 2001. As a result, from that date, the shareholders of the Bangchak Petroleum Public Co. Ltd. were as follows: Ministry of Finance, 47.87 per cent; Thai Petroleum Public Company Ltd., 24.29 per cent; Krung Thai Bank Public Co. Ltd., 7.86 per cent; “others”, 20 per cent.
3. 753. According to the Government, the State Council has considered that the Petroleum Authority of Thailand (PTT) was completely privatized and became the Thai Petroleum Public Company Ltd. on 1 October 2001. As a result, the PTT was not a state enterprise under article 6(1) of the SELRA 2000, and the Bangchak Petroleum Public Co. Ltd. automatically became a private company which did not have the status of state enterprise any longer. The Government adds that the conversion of the company from a state enterprise to a “private public company” automatically ended BCPEU’s status of state enterprise trade union on 1 October 2001. This was officially announced by the Registrar on 26 October 2001.
4. 754. The former President and the executive committee of BCPEU were then invited by the Department of Labour Protection and Welfare (DPLW) to meet the competent officer to obtain information on the right to organize and register under the Labour Relations Act of 1975.
5. 755. On 18 March 2002, a group of 12 workers led by a person other than the former President of BCPEU (a Mr. Sthaphorn Mesa-Ard) filed a registration application with the DLPW, which the Registrar approved and announced on 5 April 2002 (Registration Certificate No. KorThor 785).
6. 756. In its communication of 7 October 2002, the Government indicates that the former executive of BCPEU are entitled to organize a trade union under the Labour Relations Act of 1975. The Government considers that the revocation of BCPEU’s registration and its dissolution are legitimate, and that BCPEU’s rights to organize and to bargain collectively are fully sustained, under the Labour Relations Act of 1975 and the 1997 Thai Constitution.

C. The Committee’s conclusions

1. 757. The Committee notes that this complaint concerns a situation arising out of a purported change of status of a state-owned oil company, from state to private enterprise, as a result of which the complainant organization (BCPEU) was automatically dissolved and prevented from bargaining collectively.
2. 758. The Committee notes at the outset that the intended change of status is not all that clear, since two government agencies or bodies (the Ministry of Finance on 28 January 2001, and the Parliamentary Committee on Labour and Social Welfare on 10 April 2002) stated that the change in shareholders did not impact on the status of Bangchak Petroleum Public Co. Ltd. as a state enterprise, and that there should be no change in BCPEU status as a state enterprise union. Secondly, the President of Bangchak Petroleum himself stated publicly on 22 April 2002 (more than seven months after the purported change) that “the company is state-owned”, when requesting a government bail-out to restructure the company’s debt.
3. 759. Whatever the current legal status of the company (which is not for the Committee to decide) and whether or not the conversion was a bona fide one, the crucial issues from the Committee’s point of view are that the BCPEU was dissolved, its registration was cancelled, it is prevented from bargaining collectively, the application of the previously negotiated agreement is unclear, and the representational gap may ultimately affect the working conditions of the workers.
4. 760. The Committee recalls that:
   • – Measures of dissolution by administrative authorities constitute serious infringements of the principles of freedom of association [see Digest of decisions and principles of the Freedom of Association Committee, 4th edition, 1996, para. 664].
   • – The dissolution of trade union organizations is a measure which should occur only in extremely serious cases, and only following a judicial decision so that the rights of defence are fully guaranteed [see Digest, op. cit., para. 666].
   • – The cancellation of an organization by the Registrar of trade unions is tantamount to the dissolution by administrative authority [see Digest, op. cit., para. 669].
   • – Deregistration measures, even when justified, should not exclude the possibility of a union application for registration to be entertained once a normal situation has been re-established [see Digest, op. cit., para. 671].
   • – Legislation which accords the Minister complete discretionary power to order the cancellation of the registration of a trade union, without any right of appeal to the courts, is contrary to the principles of freedom of association (see Digest, op. cit., para. 672).
5. 761. The Committee notes that all these principles were violated in the particular circumstances, notably as regards the administrative dissolution of BCPEU and the automatic revocation of its registration and legal personality. It therefore requests the Government to take appropriate measures so that the legal personality and registration of BCPEU be restored immediately, if necessary by transferring these rights under the new legislation covering the Bangchak company, and to keep it informed in this respect.
6. 762. As regards the current trade union situation in the company, the Committee notes that a new union, led by another president, has been registered by the authorities. It is unclear however whether that registration in practice prevents BCPEU from applying for registration, and what are the practical consequences, in terms of preferential bargaining rights, for instance, etc. The Committee therefore requests the Government and the complainant to provide further updated information on the trade union situation in Bangchak Petroleum Public Co. Ltd., including the number of trade unions present in the company, their representativity, whether the previous collective agreement is being applied and the situation of collective bargaining rights. It also requests the Government to clarify the status, public or private, of the company in question.
7. 763. In view of the serious consequences that the existing legislation may bring about for the existence of workers’ organizations in such cases of conversion from state to private enterprise, the Committee requests the Government to take appropriate measures so that this situation will not arise again in future and trade union successors’ rights are safeguarded.

The Committee's recommendations

1. 764. In the light of its foregoing conclusions, the Committee invites the Governing Body to approve the following recommendations:
   • (a) The Committee requests the Government to take appropriate measures so that the legal personality and registration of BCPEU be restored immediately, if necessary by transferring these rights under the legislation covering the Bangchak company, and to keep it informed in this respect.
   • (b) The Committee requests the Government and the complainant to provide updated information on the trade union and collective bargaining situation in the Bangchak Petroleum Public Co. Ltd. It requests the Government to clarify the status, public or private, of the Bangchak Petroleum Public Co. Ltd.
   • (c) The Committee requests the Government to take appropriate measures so that this situation will not arise again in future.