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16 January, 2000Three hundred workers lose their jobs as Makonka Electronics closes plant in Malaysia.
MALAYSIA: The 300 workers employed at the Makonka Electronics' operation in Klang, Malaysia, have lost their jobs due to plant closure. This Hong Kong-based company, which produced colour televisions for the export market, was established in 1990. In November 1999, the company went into receivership due to its failure to settle a loan owed to the Bank Bumiputra Commerce. The Electrical Industry Workers' Union (EIWU), which represents the workers, met with the receivers in November 1999 and was assured that the company might be restructured or sold to interested buyers.
On January 13, 2000, all 300 workers were issued letters of termination, giving as the reason that continuation of the operation was no longer viable. The EIWU has, however, initiated the necessary action for securing severance pay for the dismissed workers and will be filing a compensation claim against the company with the Labour Department in the next few days.
Under Malaysian law, it will be hard to secure severance pay from the company because proceeds from the sale of its assets will first be given to secured creditors, and only if there is a balance left over will it be apportioned to the workers, who are classified as unsecured creditors. To make matters more difficult for the workers, Malaysia has no social safety net.
After a very lengthy legal battle, the EIWU secured union recognition in 1997, and 250 workers have benefited from union membership at the plant.
The IMF Southeast Asia Regional Office is assisting the union in all possible ways.
On January 13, 2000, all 300 workers were issued letters of termination, giving as the reason that continuation of the operation was no longer viable. The EIWU has, however, initiated the necessary action for securing severance pay for the dismissed workers and will be filing a compensation claim against the company with the Labour Department in the next few days.
Under Malaysian law, it will be hard to secure severance pay from the company because proceeds from the sale of its assets will first be given to secured creditors, and only if there is a balance left over will it be apportioned to the workers, who are classified as unsecured creditors. To make matters more difficult for the workers, Malaysia has no social safety net.
After a very lengthy legal battle, the EIWU secured union recognition in 1997, and 250 workers have benefited from union membership at the plant.
The IMF Southeast Asia Regional Office is assisting the union in all possible ways.