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6 February, 2000Malaysia's Labour Department says U.S. managing director is barred from leaving the country until 2,100 workers receive compensation.
MALAYSIA: The IMF's Southeast Asia Regional Office reports that m/s Applied Magnetics (M) Sdn Bhd, an American-based company which produces disk drives, shut down its operation in Penang, Malaysia, on January 14, 2000. Following this closure, some 2,100 workers lost their jobs.
Assisted by the Penang division of the Malaysian Trade Union Congress (MTUC), the workers filed claim for termination benefits at the Labour Department, which ordered the company to pay 10 million Malaysian ringgits (US$2.63 million) as compensation. The company was not unionised due to the ban on workers in the electronics industry to form national or industrial unions.
Up to now, the company, which is under receivership, has failed to make good the termination compensation payment. On February 3, a summons was served on the company's managing director, an American, for not paying up, which means that he, himself, is barred from leaving the country until the matter is resolved. According to the Malaysian government's human resources minister, Datuk Dr. Fong Chan Onn, if the managing director runs away, he will be considered as a fugitive.
The company also owes the government Social Security division RM160,000 ($42,000) and the Employees Provident Fund about RM1 million ($263,000). These amounts are statutory deductions and contributions, to be credited monthly into the employees' accounts.
It is hoped that upon liquidation of the company's assets the compensation owed to the workers will be settled. It seems that poor sales, stiff competition and the bankruptcy of the parent company in California brought on the closure.
Assisted by the Penang division of the Malaysian Trade Union Congress (MTUC), the workers filed claim for termination benefits at the Labour Department, which ordered the company to pay 10 million Malaysian ringgits (US$2.63 million) as compensation. The company was not unionised due to the ban on workers in the electronics industry to form national or industrial unions.
Up to now, the company, which is under receivership, has failed to make good the termination compensation payment. On February 3, a summons was served on the company's managing director, an American, for not paying up, which means that he, himself, is barred from leaving the country until the matter is resolved. According to the Malaysian government's human resources minister, Datuk Dr. Fong Chan Onn, if the managing director runs away, he will be considered as a fugitive.
The company also owes the government Social Security division RM160,000 ($42,000) and the Employees Provident Fund about RM1 million ($263,000). These amounts are statutory deductions and contributions, to be credited monthly into the employees' accounts.
It is hoped that upon liquidation of the company's assets the compensation owed to the workers will be settled. It seems that poor sales, stiff competition and the bankruptcy of the parent company in California brought on the closure.