Anton Marcus and Melanie Brehaut
Union busting in its worst form continues in Sri Lanka’s Free Trade Zones (FTZ).
This is not new.
Unions have never been encouraged to form in the tax free zones set up for the benefit of foreign investors, with little regard or the workers who provide their profits.
However the blatant actions of management at the Jaqalanka Ltd factory in the Katunayake Free Trade Zone in recent months, which continue even as this article is being prepared, clearly demonstrates the lengths to which authorities at all levels will go to prevent the formation of trade unions in FTZs.
Members of the Free Trade Zones Workers Union (FTZWU) at the Jaqalanka factory have faced relentless intimidation and harassment from management and even death threats from unknown persons for merely choosing to be a member of a trade union.
Management’s ongoing tactics of bullying, coercion, and intimidation have been supported by the Board of Investment of Sri Lanka (BOI) at the highest level.
There is evidence of collusion by some officials of the Labour Department.
The role of the Government in this dispute must be questioned, with the Labour Department’s apparent inaction, even though there were repeated requests from the union for intervention. It must be said that a Labour Department investigation has now been launched into the Jaqalanka Ltd dispute, but it was not started until August, some three months after the first incidents of intimidation were reported by the FTZWU. To date there has not been any concrete action taken by the Labour Department, nor the Minister for Employment and Labour.
The Jaqalanka dispute is a serious test case for the Right to Organise and Collective Bargaining in the FTZs. The outcome, whether positive or negative, will have ramifications for the future of workers and the garment industry as a whole in Sri Lanka.
It is a critical campaign for workers of the FTZs.
How the dispute arose
The dispute arose when management informed workers it would not be paying the annual New Year bonus in April this year. This bonus has been paid to workers at Jaqalanka Ltd since the factory’s inception 28 years ago. Workers went on strike in protest, thereafter forming a branch of the FTZWU to negotiate with management.
Management said it would recognise the union based on the results of a referendum, if it proved the union had at least 40 percent membership. The referendum was held on 9 July 2003, but due to management’s intense harassment and intimidation in the lead up to the poll, workers were too frightened to vote. Though the union has a signed-up membership of 260 workers in the factory, just 17 workers out of a total of 399 voted on the day of the referendum. A panel of international observers from the American Centre for International Labour Solidarity, plus three translators, declared the referendum to be flawed and clearly outlined management’s tactics of instilling fear in the workforce. There were also two management observers and two observers from the FTZWU.
Timeline for Union Busting
In a dispute which has lasted for near on six months, the range of tactics used by management in an effort to bust the union continues to grow. In the latest tactic management is buying workers with cash bribes and offering promotions.
Most important to note is that despite this unrelenting strain placed on the union and its members – it has remained strong. Small victories are occurring and the FTZWU is determined this is a struggle it must and will win.
When the workers first went on strike in April 2003 over the non-payment of the annual bonus, they decided to join the FTZWU as they believed this was the best way to negotiate with management and arrive at an amicable settlement.
About 220 workers (from a total of 400 workers in the factory) joined the union, formed a branch union, and elected office bearers.
When these 220 workers reported for work on 5 April 2003 management refused to take them back. Workers wrote a letter requesting management to take them back and settle the dispute. In that letter they mentioned they had become members of the FTZWU. The union wrote a letter to the Commissioner of Labour and Industrial Relations about the dispute and the non-offer of work when workers reported for work on 5 April and requested him to intervene. A copy of this letter was sent with a covering letter to the Assistant Commissioner, Negombo, who is in charge of FTZ factories.
On 7 April when workers reported for work as usual, management asked them to sign a letter of condition stating that they wanted to be pardoned, and admitting that they were engaged in an illegal strike. Workers refused to sign this letter. There was discussion among the workers and management, and the conditions were amended. Workers signed a letter, which said that if there was any inconvenience caused by their action they regretted it. But there was no admission of illegal strike or seeking pardon. Management agreed to take the workers back from 8 April 2003.
On 10 April 2003 management paid workers one quarter of their salary as bonus for the New Year festival, instead of the usual full month’s salary.
From this time onwards until the present day Jaqalanka Ltd management has embarked on an intensive operation to bust the union.
When branch union officials sought leave to participate in a discussion between management and the union at the local Labour Department office, at the request of the Assistant Commissioner of Labour, Negombo, the Human Resources Manager made defamatory comments about the union’s general secretary. She further refused to give leave to the workers and claimed management would not take part in any negotiations with the union.
The discussion did take place on 7 May 2003, but management did not participate sending only their lawyer to postpone the meeting. Union representatives were not informed about the postponement until they travelled to Negombo for the meeting, approximately 10 kilometres from the Jaqalanka Ltd factory in Katunayake. At this meeting the position of the Assistant Commissioner of Labour with regard to trade unions became clear when he made remarks against the union and other misleading comments about the dispute.
Not only did the branch union have to deal with management intimidation, and a biased Labour Department official when they made their complaint, they were also intimidated by the highest officer of the BOI. On 22 May 2002, Mr Arjunna Mahendran, Director General/Chairman of the BOI, together with Katunayake officers of the BOI, visited the factory and insisted members resign from the union.
In correspondence between the union and the BOI following this visit Mr Mahendran has not once denied that he asked branch union members to resign from the FTZWU. His claims of merely presenting options to the workers and the benefits of Workers’ Councils over trade unions are an obvious intimidation and a breach of the BOI’s own guidelines - the BOI Labour Standards and
Employment Relations Manual of October 2002 states:
“Section (9) Trade Union and Collective Bargaining Rights of Employees
iii. Every employer of employees in a BOI enterprise shall respect the right of the employees to form and join trade unions of their own choosing and to bargain collectively.
iv. No employer in any BOI enterprise shall –
require an employee to join, or refrain from joining, any trade union, or to withdraw from, or to refrain from withdrawing from his membership of a trade Union of which he is a member, as a condition of his employment.”
Trade unions have been campaigning for the BOI to stop intervening in industrial disputes as it is not within its purview. As a result of this dispute, and under pressure from the Government, the BOI itself has recently admitted (in a letter to the Presidential Secretariat) that ithas no right of intervention on statutory functions regarding labour disputes in the FTZs.
This is a significant gain for workers as well as for the FTZWU.
Following the BOI visit to the factory the Assistant Commissioner of Labour, Negombo also visited the factory and had a discussion with selected workers from each section and told them not to work with outsiders and try to settle these matters directly with the management.
Bribery and corruption is known to exist in the Labour Department, which could be one reason for why some government officials appear to take the side of management in some disputes.
A lack of resources within the Labour Department is also a problem. It is a department of the Government and the Government’s push is for privatisation and foreign investment. Therefore it has no interest in workers rights; its focus is on how to please the foreign investors who are putting their money into Sri Lanka
When further complaints were made by the branch union against management to the Assistant Commissioner, his response was for the union to take its complaints to the police, and not to bother him.
The union made a complaint in writing to the Minister for Employment and Labour regarding the behaviour and actions of both the Director General/Chairman of the BOI and the Assistant Commissioner of Labour, Negombo. No action was taken with regard to the misbehaviour of either official, but this may be because the referendum was conducted by the Colombo labour office, and not the Negombo labour office.
When the date for the referendum was set – as agreed by all parties on 9 July 2003, management was required to provide a list of names of workers who could participate in the referendum. This list included the names of about 40 workers who no longer worked at the factory – workers who in fact had resigned or been terminated. The union believes that this inaccuracy was a deliberate tactic to interfere with the election.
Management and supervisors of Jaqalanka Ltd used emotional blackmail to intimidate workers into not voting in the referendum. In Sri Lanka workers in a factory become very close to their work colleagues and supervisors in their particular section. They depend on the job not only for their own survival but for their families as well, who are often, far away in the villages. Management manipulates this relationship to their advantage.
Specific examples of manipulation in this dispute
The chief manager of the packing and ironing section called the workers of those sections and told them that if they voted for the union he would resign, and if they loved him they would not vote for the union. In the event the union lost the election, however it is unlikely that he would have resigned if the union were recognised.
On 19 June 2003 Jaqalanka directors Mr Harin Fernando and Mr Dinesh Senaratne called the workers of quality control, cutting, and packing sections and asked them, “Why are you paying Rs20 for the union? Are you going to support outsiders or are you going to support the people who look after you for 25 years as your parents?”
Management fabricated stories about the union
On 21 June 2003 Mr Dinesh Senaratne and Mr Harin Fernando and the human resources manager called workers of sections C and D and told them that the union had closed down five factories. This was a fabrication and when the union responded by asking management for proof of the closure of these factories there was no reply.
Management made direct threats to close the factory and warnings to branch union officials
On 24 June 2003 Dinesh Senaratne called the branch secretary, assistant secretary, and assistant treasurer and warned them against being involved with the union.
On 25 June 2003 Dinesh Senaratne called the workers in the A section where the branch secretary and assistant treasurer work and shouted at the assistant treasurer and told her she would be struck down by lightning because of her involvement in the union and verbally abused the branch secretary of the union. He also said that if for some reason workers lose their jobs, they had to take the responsibility, and said they should ask the general secretary to offer the jobs to the workers. Further he said if the union were to win in the election, they would definitely close the factory and the secretary, assistant secretary, and assistant treasurer should take the responsibility.
That afternoon Senaratne called all the workers in the A section to his room and asked them to request a pardon from him and to promise they would not do any of this union work in the future, and told them that there was no need to have an election.
When the branch secretary went to the cutting section to correct some damage in production, the cutting section manager, Mr Mahilal, used filthy and abusive language and asked why he told things to the Nike auditor (who had visited the factory to investigate the dispute), and threatened the branch secretary saying that if the factory closed he would take a knife and stab him, and that he was ready to go to jail.
Ever since the referendum was held the Human Resources Manager in particular, has been vehement in her verbal abuse of branch union members. She has not allowed workers to report in small groups to the police station to make complaints when they were specifically requested by police officers to do so. The Human Resources Manager has mocked workers and talked down to them, claiming they do not appreciate the way the company is running the factory. She repeatedly uses abusive language.
Management demanded branch union official resign from the union
On 26th June 2003 management of the cutting section Mr Mahilal and Mr Santha Jayakody called the branch secretary and asked him to give a letter resigning from the post of the union.
Director Dinesh Senaratne then called the branch union committee members when the branch secretary told him no one was going to resign from the union. Then the director threatened each one and asked them, “Do you want an election?” The assistant secretary said, ”Yes I do.” Then verbally abusing her, he asked her to go aside and told her, “You are the person spreading all the problems in the factory and you should resign.” He used abusive language. The assistant secretary said she did not want to resign, but if the management wanted they could dismiss her. Senaratne said he knew how to dismiss her, and he would “…do it beautifully,” and asked all three office bearers to resign.
Senaratne then called all the workers of the factory that evening and asked them the question, “Who wants the election?” Workers kept silent because of the threats they were facing.
Management circulated a letter prepared by them which said the workers were resigning from the union and the posts of the union and that they did not want an election, that they wanted to work with the management peacefully, and that they had signed this letter, without any pressure.
Thus management acquired the signatures from the workers by duress, however most of the office bearers of the union, and a considerable number of union members refused to sign. The letter was addressed to the Assistant Commissioner of Labour, Negombo.
When the issue of these resignation letters was raised by the union in subsequent meetings with Jaqalanka Ltd, management denied all knowledge of the letters even existing. This is despite the fact that at a discussion between the union and management representatives before the Labour Commission, the Human Resources Manager had admitted that the letters did exist.
Management enlisted thugs and intimidated workers on and off the factory premises:
• On 29 June 2003 when Jaqalanka workers met at the Katunayake union office a suspicious person came by on a Honda CD-90 motorbike (No.46-642) and came inside the union office to enquire about a person whom nobody knew. When the organisers questioned him, he went. In the meantime workers found out that director Dinesh Senaratne was waiting outside the office, nearby. The motorcycle was traced back to ownership by Jaqalanka International.
• The branch union secretary was assaulted by five unknown men at Avariwatta Junction, after he attended a union meeting. He made a complaint about the assault at the Katunayake Police Station.
• A female member of the union was threatened by four unknown men on her way home from work at the Avariwatta Junction, who questioned her about Jaqalanka and her involvement in the union. These men told her, “We did something for one last Sunday, but still he is continuing without shame and if you go again to the union we will kill you and put you into the lagoon.” Fortunately seven young men passing by saw this incident and intervened, but the men threatened them with a knife and said, “You can take your sister, but we know the place where she is boarding and if we want we can do anything whenever we want.”
• This incident was also reported at the Katunayake Police Station, but the police officers in charge behaved in an unruly manner and questioned her about her association with the union. They also referred to the complaint made on Sunday 27 July 2003 by the branch union secretary, claiming this statement and hers were fabricated.
Management smears and propaganda to frighten workers
On 7 July 2003 director Dinesh Senaratne called workers section by section and asked them not to vote for the union. At the same time, management carried out a propaganda campaign following the visit of Nike auditors to the factory on 3 July. The factory had lost some orders from Nike, and therefore the company may have to close the factory. This was just rumour, yet management blamed the union.
Management boldly continues intimidation on day of referendum in presence of Labour Department officials, international observers, and trade union officials
Management officials, who have been involved in harassment and intimidation, went to all the sections of the factory as the referendum was being conducted under the pretext of carrying out production processes. This intimidation was pointed out to the Labour Department officials who were coordinating the referendum, but they did not take any action.
The FTZWU has 260 members in the factory, yet on the day of the election, workers had been terrified so much by management, that only 17 workers chose to vote in the referendum. There were 16 votes for the union, 1 vote was spoiled.
The international observers’ report concluded: “This election was marred by the clumsiest of employer intimidation. The government of Sri Lanka did nothing about it.”
When the results of the referendum were announced management could not hide its delight and started clapping. To ‘reward’ workers, they organised a party for male workers that evening. Approximately 15 workers attended this party.
A notice was placed in the factory by administrative officials in Sinhala saying, “We salute you for the trust you have placed in us.”
This was the first referendum to be held in a Free Trade Zone in Sri Lanka conducted by the Labour Department. The results of the referendum are at a crucial juncture for the workers, unions, and employers.
The union has been trying to resolve the dispute through negotiation, but has not had any success. An international, regionally- and locally-based campaign has received great support from more than 25 countries. It is placing pressure on management and the Government, but it seems more pressure is needed.
The Government of Sri Lanka has applied for trade concessions under the GSP (Generalised System of Preferences) with the EU and the US.
The FTZWU has taken up the issue of Freedom of Association and Collective Bargaining with the EU and the US in relation to the GSP application.
In this context the dispute has received broad international attention. It is having direct implications on Sri Lanka for the GSP.
The current situation for workers in the FTZs of Sri Lanka is that their rights are being denied. Not only the internationally recognised standards of Freedom of Association and Collective Bargaining, but basic human rights of working freely and safely without fear or intimidation.
As highlighted in this article already the workers are gaining due to this campaign.
Another gain has been demonstrated in other referenda held since the Jaqalanka poll where workers have won the right to have a trade union to act as their collective bargaining agent. The most recent example was a referendum held in a factory in the Kogalla FTZ where workers won, and there was no employer intimidation or harassment.
Employers dodge responsibilities
The owners of Jaqalanka Ltd have passed the buck to their customers in this dispute, claiming they are acting only in the interests of what the customers want. Yet their customers who have their own Codes of Conduct do nothing. What is the point of a Code of Conduct if it is essentially useless at providing what it claims are “minimum standards” or protecting workers basic human rights?
Jaqalanka Ltd produces for both Nike and VF Corporation (one of the world’s largest brand corporations, holding more than 25 percent of the US jeans market). Both multinational companies have their own Codes. Both have had their own auditors visit the Jaqalanka factory to investigate this dispute.
Yet neither multinational has had any impact or influence over Jaqalanka management to end the intimidation and harassment, and provide a safe working environment for the workers.
The Nike Code of Conduct clearly states:
“NIKE partners with contractors who share our commitment to best practices and continuous improvement in:
1. Management practices that respect the rights of all employees, including the right to free association and collective bargaining
2. Minimising our impact on the environment
3. Providing a safe and healthy work place
4. Promoting the health and well-being of all employees”
As this article is being prepared, the situation remains at a stalemate.
The FTZWU has initiated several discussions with Jaqalanka Ltd management in an attempt to come to an amicable settlement of this dispute.
The union has written several letters to management clearly stating its position and seeking input from management. To date there has not been any written confirmation or communication from the management to the union.
Jaqalanka Ltd management is insistent on a re-election. It claims its customers want to see a second referendum held at the factory. Management insists this is the only way to determine that the FTZWU has more than 40 percent membership and can therefore be recognised and act as a bargaining agent.
The union however believes it is impossible to have a second referendum. To this day harassment and intimidation of branch union members at the Jaqalanka factory continues. In the light of previous intimidation the FTZWU and its branch union members at Jaqalanka have no faith or trust that the management will provide the appropriate atmosphere for a free and fair election.
Therefore the union stands by its revised demands of 31 July 2003:
• Recognition of the FTZWU as the collective bargaining agent of Jaqalanka Ltd on the basis of its signed up membership.
• Jaqalanka Ltd, the Government of Sri Lanka, the President, Prime Minister, and Inspector General of Police take every step to safeguard the lives of the branch union members who voted in favour of the union at the 9 July referendum.
• A clear statement that Jaqalanka Ltd will respect the right to Freedom of Association and Collective Bargaining
• Provide facilities for trade unions to operate freely inside the factory.
The union continues its struggle with the knowledge it has support and solidarity at local, regional, and international levels. This knowledge is the strength that moves the union forward.