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Foreign worker crackdown: Small mom & pop businesses suffering

A waitress takes orders at a street food stall in Bangkok's Chinatown. PATIPAT JANTHONG

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Big corporate hotels & restaurant chains want the small cheap mom & pop restaurants & guesthouses licensed or shut down.

MIGRANT LABOUR, LABOUR SHORTAGES & THE LAW

Small eateries reeling from labour exodus

New alien worker law creating shortage
17/07/2017
Suchat Sritama

Thailand's hotel and restaurant businesses, which employ millions of alien workers, are upset over the new labour law endorsed on June 23.

The controversial crackdown has forced scores of restaurants to close their doors, and many travel and bus companies to stop hiring illegal workers, many of whom handle tourist luggage, or work as cooks, waitresses or waiters in restaurants.

Labour shortage has forced small food shops like this to close. SUNAN LORSOMSAP

250,000 RETURNED TO COUNTRY ALREADY, MILLIONS STILL HAVE GRACE PERIOD

More than 250,000 illegal workers have returned to their home countries since the implementation of the new law.

Millions, however, are still in the country, since their grace periods have yet to expire.

This is according to Thai Restaurant Association (TRA) president Taniwan Koonmongkol.

GIVEN 6 MONTHS TO COMPLY OR 400,000 BAHT FINE PER WORKER

The government has given business operators six months to certify or re- certify their foreign worker's permissions and job titles.

Business owners who do not comply will be fined 400,000 baht per illegal worker.

SMALL SHOPS FORCED TO CLOSE, 30% DROP IN SALES

The labour shortage has forced small food shops, and food carts to close, said Mrs Taniwan.

Small shops still in operation have suffered a 30% drop in sales on average.

BIG COMPANIES NOT AFFECTED

Big food chains and financially robust companies, however, have not been affected.

There are more than 100,000 registered restaurants in Thailand, she said.

These restaurants hire about 300,000 alien workers, mostly from Myanmar (60% of the total), Laos, Vietnam and Cambodia.

FILIPINOS USUALLY HAVE WORK PERMITS

However, an increasing number of Filipinos are entering the country to work at luxury restaurants, hotels and language schools.

Most of them have proper work permits.

"Many foreign workers will return to Thailand after they realise they can keep working until their grace period expires at the end of the year," Mrs Taniwan said.

FOOD INDUSTRY CONTRBUTES 1.1 TRILLION BAHT TO ECONOMY

The food business contributes 1.1 trillion baht into the economy.

Tourist consumption accounts for 600 billion baht.

The TRA estimates that there are some 3 million registered foreign workers in Thailand out of a total 10 million foreign workers.

Most of them work in the manufacturing, fishing and farming sectors.

NON-REGISTERED HOTELS, ILLEGAL WORKER CONNECTION?

Non- registered hotels are said to run the largest risk.

The crackdown will probably have little impact on registered hotels, since they are said to only hire certified workers.

"Registered hotel operators prefer to employ local people."

"Only 5% of their staff is from overseas, and they all have work permits," according to Thai Hotels Association (THA) president Supawan Tanomkieatipume.

ONLY 8,000 OF 18,000 HOTELS IN THAILAND ACTUALLY HAVE OPERATING LICENCE

There are more than 18,000 hotels in Thailand, but only 8,000 of these have operating licences.

These leaves more than 10,000 hotels with a combined 400,000 rooms operating illegally in what could be likened to an informal hotel sector, said the THA.

There are more than 300 illegal hotels in Bangkok, said Mrs Supawan.

This includes properties like serviced apartments, guest houses, condominiums, houses and other private properties that provide accommodations for tourists.

BENEFITS OF A LARGE INFORMAL HOTEL SECTOR

Of course, there are also benefits to having a large informal hotel sector, such as a large supply and variety of rooms for tourists to choose from, which ultimately results in happy tourists who want to return to Thailand.

One might even argue that Thailand would not have become the tourism force that it is without informal sector hotels. Take tourist meccas such as Koh Samui or Koh Phangan, for instance, which started out very informally. In other cities of Asean (e.g. Cebu, Philippines) it is often difficult to find a cheap hotel room nearby.

Of course, the formal hotel sector wants the informal hotel sector eliminated and will only provide reasons why it should be eliminated.

Laws may be laws, but sometimes laws remain unenforced for a reason, signaling clearly that the law should be changed to correspond with business reality.

ILLEGAL HOTEL LAW NOT REALLY BEING ENFORCED

Only 20 illegal hotels had been charged since 2014, even though the THA provided a list of properties that violate the law to the police.

Each operator was fined between 3,000-10,000 baht. Many have been charged multiple times, but continue to operate under different names.

Non-registered hotels, tourist accommodations and small independent hotels are required to consult with the Interior Ministry's Department of Provincial Administration (DPA) -- the unit that approves hotel licences, she said.

HOW TO AVOID GETTING PENALTIES UNDER FOREIGN LABOUR LAWS?

The TRA suggested that in the long term, business owners, especially restaurants, can avoid the foreign labour crackdown by issuing work permits, and group medical insurance to their staff.

That is, if the crackdown lasts, because this is not the first time this has happened and business and economic reality has triumphed in the end, in the past.

"Many illegal immigrants will return in search of higher wages in Thailand."

"The number of registered workers will also increase in step," declared Mrs Taniwan expressing her opinion on the matter.

ADVICE FROM THE FORMAL HOTEL SECTOR

Restaurants would do well to keep their margins high, especially in the tourist sector.

Higher profit, of course, supports higher wages, and lower turnover rates, but in highly competitive markets such as Thailand's tourism sector, this is often easier said than done.

According to the formal sector, the government should regulate street food quality and up its crackdown on illegal workers.

However, the informal sector street restaurants feed millions of low income earners acorss Thailand, thus fufilling a crucial that is only ignored at the government's peril (elections are coming soon). 

Authorities have ignored the problem of illegal labour in street food shops for far too long, continued Mrs Taniwan, expressing her personal opinion on the matter. .

"Thailand is an open country, it allows illegal workers stay. Poor law enforcement is the root of our problem," she said.

Thai Labour Minister Sirichai Dithakul recently met Myanmar Labour Minister U Thein Swe to discuss cooperation on the labour problem.

Gen Sirichai asked his Myanmar counterpart to certify or recertify workers within the next six months, before allowing them to return to Thailand. On its part, Myanmar asked Thai officials to keep them informed about the new labour act.

The crackdown on foreign labour is also hitting the transport industry. Many tour companies now lack both registered and non-registered foreign workers, said Wasuchet Sophonsatien, president of the Thai Transportation Operators Association.

"The government should help operators keep moving tourism forward," Mr Wasuchet said.

http://www.bangkokpost.com/news/general/1288619/small-eateries-reeling-from-labour-exodus

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