Labor Management in Southeast Asian Countries
November 2, 2016
Mr. Akira Yamada
Managing Partner,
MIYAKE & YAMAZAKI
I was based in Bangkok, Thailand, from 1994 to 1997 as the first Resident Partner when Miyake & Yamazaki Law Firm opened its office. You might associate 1997 with the Asian Financial Crisis that spread throughout Southeast Asian countries from Thailand. Let me talk about the state of labor management in this region, based on my legal expertise.
We must bear in mind that Southeast Asia consists of countries with diverse historical backgrounds, religions and political systems. Consequently, labor conditions vary greatly from country to country, calling for tailored management.
Looking at the wage levels in this region, figures show an enormous gap with Japan. If we compare with Yokohama, the wage level for factory workers in Singapore is about one-third, Beijing is around one-tenth and Phnom Penh or Yangon is merely a fiftieth. The so-called “white-collar” office workers are paid double in general. While wage levels are rising by 10-20% each year in these countries, they are still remarkably lower than in Japan. Difficulties often faced by Japanese companies are to secure personnel with the necessary level of technical capabilities and expertise. Even when they succeed in recruiting one, competent and qualified employees tend to make a career move quickly. Japanese companies, therefore, should not apply a Japanese-style wage system in this region based on life-long employment and seniority.
Let me touch upon overtime work, currently a hot issue in Japan. Southeast Asian countries also stipulate conditions for overtime work but they are relatively lax. For example, the statutory working hours in Thailand is 48 hours per week or 8 hours per day, but workers are granted 36 hours overtime per week at the same time. While employees in Japan are entitled to overtime pay at the rate of 125% of regular pay, the rates in Thailand are 150% for overtime, 200% for holiday work and 300% for holiday overtime. Overtime is duly compensated in Southeast Asian countries and Japanese companies are encouraged to learn from their practice.
The Japanese government is currently promoting “dynamic engagement of all citizens” to enhance its economic policies. But scores of obstacles remain and hinder women’s social advancement. In Southeast Asian countries, female employees account for more than half of the workforce in the office, with many in managerial positions. Children come to offices in the evening, turning companies into a nursery that provides a warm and caring environment for children. Countries in this region also take an inclusive approach to minorities, including LGBTs (lesbian, gay, bisexual and transgender), an area where Japanese companies are less experienced.
I must say not a few companies in Japan tend to think work environment in Europe and the USA is more advanced than in Southeast Asia, which is not always the case. I think companies are encouraged to create a new work environment by putting together all the good practices regardless of the region to stimulate growth in Japan.