Electronic companies, government must stop resisting recognition of trade unions

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Charles Hector asserts that Renesas must immediately recognise the workers’ union and reinstate workers’ leader Wan Noorulazhar and other workers who have been terminated.

Wan Noorulazhar
Renesas must reinstate Wan Noorulazhar, a human rights defender

Workers in the electronic industry have been long discriminated with regard to their right to form trade unions (TU). The Malaysian government still does not allow them to form a national union, something that workers in most other sectors already enjoy.

After years of struggle, the government finally conceded to allow the formation of not a national union, but four regional unions in Peninsular Malaysia. On 27 May 2009, the Cabinet decided that only unions at regional level would be allowed, unlike the national unions for the other industries. The Western Regional Union (covering Kuala Lumpur, Selangor and Perak) was registered on 1 December 2009 , the Southern Regional Union (Johor, Malacca and Negri Sembilan) on 11 March 2010 , the Northern Region (Penang, Kedah and Perlis) on 31 March 2010 and the Eastern Regional Union (Kelantan, Terengganu and Pahang) on 23 August 2010 .

After registration, these regional unions started work to form trade unions in the electronic factories in their regions, but to date only one trade union has successfully been recognised and formed in STMicroelectronics Sdn Bhd in Muar, Johor. Recognition is essential, for without it trade unions cannot enter into collective bargaining agreements with the employer.

Sadly, many electronic companies, that supply to major brand names, have been using various means to prevent recognition, including terminating worker leaders working towards the formation of unions. Pro-union workers are got rid of – something made easier by the existence of short-term employment contracts – by simply not renewing these contracts and getting new workers. Sadly, the Malaysian government through amongst others, the Director General of Industrial Relations (DGIR) can be perceived to be failing workers in the exercise of their right to form trade unions.

In this article, we shall be focusing on the struggle of the workers in Renesas Semiconductor KL Sdn Bhd [formerly known as NEC Semiconductors (Malaysia) Sdn Bhd] to form and get recognition of their trade union. Wan Noorulazhar bin Mohd Hanafiah, the president of the Electronics Industry Employees Union Western Region (EIEUWR) and leader of the workers in Renesas who have been seeking recognition of their union since January 2010, was terminated by the company on 26 August 2011.

TU: Of registration and recognition

In Malaysia, after registration, the more important matter for a trade union is to get recognition. It is only after recognition is obtained that a trade union can enter into negotiations with employers and get a collective bargaining agreement.

The law stipulates that the trade union has to submit an application to the employer for recognition, and within 21 days, the employer can accord recognition to the trade union or give reasons for its refusal to do so.

Now, if the employer does not respond or give some reasons why recognition will not be given, the trade union will have to notify the Director General of Trade Union (DGIR) within 14 days, and if late, that claim for recognition would be taken as lapsed.

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The DGIR will then take such steps or make such enquiries to ascertain:

(a) the competence of the trade union of workers concerned to represent any workers or class of workers in respect of whom recognition is being sought; and (b) by way of secret ballot, the percentage of the workers or class of workers, in respect of whom recognition is being sought, who are members of the trade union of workers making the claim. But alas, there is no stipulation as to the time period, and it is not uncommon that the DGIR delays the conduct of the secret ballot.

Nowadays, when many employers use short-term employment contracts, it is so easy to get rid of those workers who want to form a trade union – and when that day for a secret ballot finally arrives, there may just be not enough workers who want a trade union present. The Industrial Relations Act was amended in 2007 to effectively allow employers to terminate union leaders and workers from their short-term employment contract even after their claim for recognition. The protection against discrimination and/or termination against workers in the process of unionisation was effectively removed for short-term contract workers, and this is material as many employers today resort to these short-term contracts rather than according regular employment contracts with security of tenure until retirement.

Good employers would naturally just accord recognition to trade unions, hence respecting workers right to freedom of association and to form trade unions. But bad employers would try not just to delay recognition, but also kill the attempt by its workers to form trade unions using a variety of means. The latest of these strategies is the use of workers at their workplaces who are considered not employees. These workers are provided by ‘contractors for labour’ or outsourcing agents. These ‘non-employees’ effectively would not be able to benefit from collective bargaining agreements, which are in essence agreements between employers and employees.

Renesas Semiconductor KL Sdn Bhd

Since January 2010, attempts by Electronic Industry Employees Union Western Region (EIEU Western Region) to obtain recognition of the trade union at this factory have been thwarted, and the workers still have no recognised trade union. To date, there have been at least four attempts to gain recognition.

First attempt

On 18 January 2010, EIEU Western Region submitted the first application for recognition, which was refused by the company on the ground sthat there was an application for recognition by a pro-tem union of NEC workers, an in-house union, which was not even registered. Only a registered trade union can submit an application for recognition. The tactic of creating a pro-employer in-house union is one of the strategies employed by some employers to evade formation of a legitimate trade union of workers.

The Director General of Industrial Relations (DGIR) did not accept the employer’s reasons, and should rightly have proceeded with the secret ballot but he did not.

The company then claimed that they did not receive the application, which was odd as they did send a letter in response. In any event, the DGIR then called for a meeting with the union and the company, which the company did not attend.

Finally, the DGIR came out with a letter stating that the application was not properly served, and thus the claim for recognition had lapsed, and that the union needed to submit a new application for recognition. Now, the relevant Form A, being the application for recognition was hand delivered by Wan Noorulazhar, the president of the Union, and the Company’s manager had acknowledged receipt.

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Second attempt

The second application for recognition was made by the EIEU Western Region on 17 August 2010, and this application was sent by registered post that required an acknowledgement of receipt. Renesas did not respond within the statutorily stipulated 21 days, but unfortunately the union also did not receive back the acknowledgement of receipt card from the postal company. Hence, there was no proof of receipt. Renesas, naturally, claimed it did not receive the application for recognition of the union. And so the union had to make a third application for recognition.

Third attempt

The third application was made on 8 October 2010, this time using the courier Poslaju. A Poslaju letter confirms receipt by the company. The company later attempted to evade receipt of the application by sending the letter back to Poslaju. On 10 November 2011, the union informed the DGIR. Renesas again claimed that they did not receive the application for recognition; yet again, the DGIR seemed to be pro-the company. There was no action.

On 30 March 2011, the union then filed a case in the Industrial Relations Department asking that the Minister refer the matter to the Industrial Court for a determination that the Notice of Claim for Recognition by the Union dated 8 October 2010 was properly served on the company, and this was not acted on.

By reason of inaction by the DGIR, on 12 August 2011, the union held a picket in front of the Ministry of Human Resources in Putrajaya. Then the union was informed that the file had been misplaced, and they were advised to file another application.

Fourth attempt

The fourth application was made on 8 September 2011, and the notice was served on the company using Poslaju, which the company accepted, and made no attempt to return. The company strategy changed, and this time they challenged the registration of the trade union and the qualification of the union’s general secretary, Bruno Gentil Pereira.

The minister rejected the company’s contention on 9 April 2012, and Renesas filed a High Court case to challenge the minister’s decision on 8 May 2012. As respondents, it named the the Director General of Trade Unions, the Director General of Industrial Relations (DGIR), the Union and Bruno Gentil Pereira, the secretary of EIEU Western Region. In the High Court application, it also prayed that no action be taken with regard the recognition of the Union.

On 28 June 2012, the High Court dismissed Renesas’s application, and Renesas proceeded to file an appeal to the Court of Appeal on 20 July 2012.

Even though there was no court order after 28 June 2012 preventing continuation of the process of recognising the Union, mysteriously no action was undertaken by the DGIR.

The three judges of the Court of Appeal on 5 December 2012 unanimously dismissed Renesas’s appeal with costs. The company claims that they will beappealing to the Federal Court, and hence the recognition process should not be continued. There is no court order barring the DGIR from continuing with the process.

Would the workers of Renesas finally get their union recognised more than three years after they first submitted this claim, or will they still be denied this fundamental worker’s right?

Wan Noorulazhar and other workers

In January 2010, when the Union first submitted its claim for recognition, over 1100 of about 1600 workers in Renesas were members of the union. A secret ballot then would have been successful given that workers in favour of the union were about 70 per cent, which was more than the required threshold of more than 50 per cent.

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Although Malaysian law prevents employers from discriminating against or terminating workers due to the worker’s involvement in the formation of a union, that protection to workers was eroded by an amendment to the law in 2007. This amendment inserted new exceptions to how an employer can get rid of pro-union workers: “where a termination is due …. expiry of a fixed term contract, non-confirmation of a probationer or being medically boarded out.”

Thanks to government policy that allows employers to use fixed-term contracts, with no protection against abuse, employers readily can get rid of pro-union workers by just not extending their contracts or entering into a new contract even though the employer still needs a worker to perform the work that the said worker was doing; employers just get another new worker on a fixed-term contract. In Malaysia, migrant workers also can join unions; again delay means that the pro-union worker’s contract would also have expired.

In the Renesas case, Wan Noorulazhar himself was terminated by the employer on 26 August 2011, and his wrongful dismissal case is pending at the Industrial Court. Even if the courts do find that Renesas had wrongfully dismissed Wan Noorulazhar, the norm is that court would not order reinstatement but rather compensation in lieu of reinstatement. Hence, effectively Renesas may have successfully eliminated this workers’ leader from its factory.

The union has now lodged a complaint with the DG of Industrial Relations alleging that Renesas has violated the law that protects workers forming or participating in trade union activities. The complaint includes assertions of discrimination relating to promotions, amongst others.

Renesas must respect workers’ right to unionise

A perusal of Renesas’ website shows that its major shareholders include Hitachi (30.6 per cent), Mitsubishi Electric Corporation (25.0 per cent) and NEC Corporation (16.7 per cent).

Both the Renesas Electronics Group CSR Charter and the Renesas Electronics Group Code of Conduct clearly state that the Renesas Electronics Group will respect human rights in hiring, human resources development, employee treatment and all other aspects of employment.

Hitachi subscribes to the UN Global Compact, which clearly states: “Businesses should uphold the freedom of association and the effective recognition of the right to collective bargaining.” Being a Japanese MNC, it is also bound by the OECD Guidelines, which clearly says, “Respect the right of their employees to be represented by trade unions…”

All these pronouncements about commitment to human rights and worker rights, including the right to form trade unions and enter into collective bargaining agreement, seem not to be adhered to in the case of the Renesas Semiconductor KL Sdn Bhd workers’ bid to get their union recognised. To be true to these commitments of the company and its owners, the company must stop resisting and immediately accord recognition of the union, and further reinstate Wan Noorulazhar and other workers who have been terminated.

Likewise, this Malaysian government must change its attitude and ensure speedy registration and recognition of trade unions in Malaysia, with particular reference to the trade unions of workers in the electronics industry.

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