Wednesday, February 11, 2015

Strike at Korean factory exposes bankruptcy of new wage system in Calabarzon

Press Release
February 11, 2015

A strike broke out today at a Korean-owned metal factory inside the Cavite Economic Zone, the biggest in the country, due to a dispute over wage increases during collective bargaining negotiations. The militant Partido Manggagawa (PM) explained that the dispute exposes the bankruptcy of the two-tiered wage system being implemented in Calabarzon for the past few years.

“The two-tiered system pioneered in Calabarzon sets a very low floor wage—the new name for the minimum wage—and only productivity-based schemes allow workers to receive above the floor wage. But at Tae Sung and other export zone factories, despite yearly profits, capitalists refuse to share productivity gains to its workers. Thus most Tae Sung workers earn no more than the floor wage despite their company supplying metal parts to big electronics and auto multinationals like American Power Conversion, Honda, Caterpillar, Mitsubishi, Siemens and Deif of Denmark,” argued Wilson Fortaleza, PM national spokesperson.

Production at Tae Sung is now paralyzed as all regular workers for the 6:00 a.m. morning shift are now picketing company gates. Tae Sung's human resource manager has talked to the picketing workers and she was told that only a collective bargaining agreement will make them go back to work.

Fortaleza added that “How can a two-tiered wage system work—in which productivity-based pay are dependent on negotiations—when the vast majority of workers are unorganized and the few unionized are disadvantaged by weak enforcement of labor laws and the willing connivance of government officials—from the Labor Department to the local government units—with foreign and local capitalists? No wonder inclusive growth remains elusive and instead inequalities prosper despite the much-vaunted economic growth that is monopolized by big capitalists.”

The Tae Sung Employees Association, the union at the Korean factory, alleges that the company has been engaged in bad faith bargaining for the past seven months of negotiations. The union has reduced its wage demand from P100 each year for three years to P25 in a bid to reach an agreement but the Tae Sung management has barely moved from insisting on no increases to offering merely P5 each year for three years. Aside from wages, almost all provisions in the union contract proposal have been rejected by Tae Sung. Since 2011, Tae Sung has been earning annually more than USD 10 million, according to the union.

Aside from being hardline in negotiations, the union claims that Tae Sung is attempting to weaken the union by firing eight union members, including one union officer, and suspending others including the union president and vice president.

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