Daikin Bonus Dispute: Gold Price Surge vs Employment Contract – Offering 3 Baht of Gold for Long-serving Employees
Daikin faces a labor dispute over a gold bonus with employees, as gold prices surge. A work stoppage has been announced after failed negotiations.
- The labor dispute at Daikin stems primarily from the bonus contract offering 3 Baht of gold to employees with over 10 years of service, which led to a work stoppage after failed negotiations.
- The company offered 40,000 Baht in cash as a replacement for the gold promised in the contract, but the labor union rejected the offer, citing the high surge in gold prices, making the value of 3 Baht of gold worth nearly 200,000 Baht.
- The rise in gold prices in Thailand has been significantly influenced by the global gold price and the weakening of the Thai Baht, key factors driving the higher-than-expected value of the bonus.
Daikin Industries (Thailand) announced a work stoppage on December 6, 2025, after failing to resolve the labor dispute. The issue centers on the value of 3 Baht of gold that was agreed upon in past employment contracts.
Economic Complexity of the Dispute
The dispute is further complicated by the rise in gold prices over the past decade, especially from 2021–2025, during which time gold prices in Thailand surged steadily.
Factors Driving the Price Surge:
- Global Gold Price: The gold spot price entered a "supercycle phase," driven by concerns over financial stability and central bank demand.
- Exchange Rate: The weakening of the Thai Baht has accelerated the surge in gold prices, as there is a strong positive correlation between the value of gold and the Baht/USD exchange rate.
As a result, the value of 3 Baht of gold, as specified in the employee contract, has significantly increased compared to when the agreement was originally made.
Calculating the True Value of Gold in the Current Context
To demonstrate the cost challenges Daikin faces if it adheres to the original contract, the value of 3 Baht of gold at current market prices has changed significantly when compared to the 40,000 Baht cash offer.
- Gold Price in 2025 (average December price): 63,550 Baht per Baht of gold, making the value of 3 Baht of gold approximately 190,650 Baht.
- If we use the 2025 highest gold price, 67,400 Baht per Baht of gold, the value of 3 Baht of gold would be approximately 202,200 Baht.
This calculation highlights the significant gap between the cash offer of 40,000 Baht and the current market value of 3 Baht of gold, which could be worth as much as 200,000 Baht per employee with rights under the original contract.
Current Situation and Resolution Path
The employer has stated that the work stoppage is a legal action under the Labor Relations Act B.E. 2518 (1975), in accordance with the right to halt work when a labor dispute cannot be resolved.
Treenuch Thienthong, Minister of Labor, confirmed that the situation does not equate to a dismissal. As a result, the employer will not pay wages to the affected employees during the stoppage, as it is a legal exercise of rights.
Despite the work stoppage, the Minister of Labor has instructed the Department of Labor Welfare and Protection to intervene and facilitate a 12th round of negotiations on December 8, 2025, aiming to reach a fair resolution for all parties involved.
The Daikin dispute remains a case to watch closely as the economic dynamics have expanded the value of the previous contractual obligation far beyond the management’s initial offer, potentially complicating negotiations.
