GoodElectronics Network representing organisations and individuals worldwide, including trade unions, labour and human rights organisations, environmental groups, academics, researchers and advocates from civil society organizations, expresses concerns on the situation of striking unionists and workers of Japanese-owned electronics firm SMT Philippines, Inc. The company that supplies motherboard to EPSON and USB for Toshiba has reportedly violated the collective bargaining rights of the workers after its illegal closure and attempts at union busting.

As documented by the Center for Trade Union and Human Rights, management of SMT Philippines, Inc. denied entry of the morning shift workers on October 1 and simultaneously announced that they are ceasing operations, immediately effective, citing company losses. The workers protested against the closure and to prevent SMT Philippines from completely running away. Information that the company might be transferring all machines in other factories has reached the union, while completed products were brought to new EPSON manufacturing plant in LIMA Technology located in Batangas province.

Severe harassment against electronic workers unions

Workers in the electronics industry continue to face harassment as unionists from Fuji Electric Workers Union and Nexperia Workers Union were barred from bringing food to the picketing workers. Together with unionists from Optodev, Inc., subsidiary of Essilor International, a global player in ophthalmic lenses, they were blocked and some were reportedly beaten by combined members of Philippine National Police (PNP), SMT Philippines guards and economic zone security forces.

On second day of the protest, as food supplies are running out, police and Light Industry Science Park II authorities blocked the economic zone gate to prevent outside food support and threatened to cut the electricity and water supply. Riot police started lining up face to face with the protesting women workers at the factory site.

In the next days, the Department of Labor and Employment (DOLE) intervened to facilitate a dialogue among the union, SMT management and zone authorities. In spite of the agreement made that the police and zone authorities will allow food entry into the zone and the company will not bring machines and products out of the factory, it was extremely difficult for people and food supplies to pass through several layers of police lines and get inside the economic zone.

Violations on freedom of association and collective bargaining rights

It was found out that as early as September 2017, SMT Philippines management calibrated all the machines to and ordered workers to increase production to 3.6 million USB in a month, from the 1.2 million average monthly output. By November 2017, the SMT Philippines management has implemented a ‘no-work schedule,’ allegedly due to low volume order from EPSON. A month later, the union held a dialogue with the management and were told that a number of workers will be retrenched. The union had begun their protest action and when their collective action reached to its peak on March 2018, the company took back the idea of retrenchment. It instead offered an early CBA negotiation.

SMT manufacturing plants are capable of producing 324,000 Toshiba and 130,000 EPSON motherboards per month, on an 8-hour workday but receive an average daily minimum wage of only P448.00 (USD 8.29). In August 2018, the union started bargaining for wage increases which was countered by the management. Workers were then asked to work overtime to increase production volume of both Toshiba USB and EPSON motherboard. After a month (September 25) of continuous overtime work, the SMT Philippines management implemented work suspension. The union observed that in the same period, the company started taking out the production machines from the plant. Three days later, the management told the union that they are closing operations beginning November 1 as advised by Yokote Precision Industry Co.-Japan due to losses. The union did their investigation and found out that SMT Philippines did not actually file the required notice of closure, rather, just a notice of manufacturing plant transfer.

Even at the start of the negotiation, the union reiterated their demand for the resumption of work and the CBA negotiation, but SMT Philippines insisted that the closure is final. The company is offering 75% of their current wage, equivalent only to P336.00 (US$6.22) separation pay per year of service.

Commitment to ethical and sustainable supply chain

SMT Philippines Inc. is owned by Hitoshi Ikeda and located at the Light Industry Science Park 2 (LISP1), a special economic zone in Calamba, Laguna, south of Manila. It employs 462 mostly women workers, 398 of whom are covered by the collective bargaining unit.

SMT Workers Union are federated with National Federation of Labor Union-Kilusang Mayo Uno (SMTWU-NAFLU-KMU), and is affiliated with Metal Workers Alliance of the Philippines (MWAP), a member of GoodElectronics Network.

Workers remain in the factory premises until the time of this writing.

We recognize the foregoing as legitimate concerns of the Filipino people and the network hereby calls for the following:

  1. We urge the Philippine government, Department of Labor and Employment, Philippine Economic Zone Authority, SMT Philippines, Inc. to fully respect and protect the SMT workers’ rights to freedom of association and collective bargaining agreement, both internationally recognized trade union rights, and which the Philippines has ratified;
  2. We call on the authorities and the employers to stop violating workers’ rights and dutifully address the legitimate demands of the workers and take appropriate measure towards work resumption;
  3. We call the attention of Toshiba and EPSON to ensure that the workers along its supply chain are able to exercise their fundamental freedoms to unionize and collectively bargain.

16 October 2018

GoodElectronics Network Working Group on Freedom of Association and Precarious Work