Hundreds jobless as Adidas supplier shuts down amid dispute

More than 700 workers have been left jobless after the closure of a Yangon shoe factory that had defied an order to reinstate a sacked workplace labour union member.


A YANGON factory that supplies footwear to global sportswear giant Adidas has shut down after refusing to comply with an Arbitration Council ruling to reinstate a sacked workplace union member, leaving more than 700 workers jobless.

The decision by the Shyang Jhuo Yue Co Ltd shoe factory to lock out its workers is in breach of the 2011 Labour Organisation Law, says the Confederation of Trade Unions of Myanmar.

The factory, at the Anawyahta Industrial Zone in Hlaing Tharyar Township, is named as a primary supplier to Adidas on a list of the multinational’s seven primary suppliers and contractors in Myanmar dated July 1, 2018.

Relations between workers and management at the factory began deteriorating in July last year, when Ma Htay Htay Win, 24, a treasurer of the workplace labour union, submitted a request for annual leave and when she returned to work 10 days later was told she was dismissed.

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On November 29, 2018, the Yangon Region Arbitration Council ordered Shyang Jhuo Yue to reinstate Htay Htay Win and compensate her for the two months when she was out of work. The factory has ignored the order.

Shortly after the ruling, workers say they were told by Shyang Jhuo Yue’s general manager, Mr Mico Ho, that the factory would temporarily cease operations from December 10 to 27. They say he gave a commitment that it would not be permanently closed, but when they returned to work on December 27 they were told by management that the factory was shutting down.

The workers and the CTUM say the closure of the factory breaches six sections of the Labour Organisation Law. They say this includes section 37, which states that employers must give 14 days advance notice of a decision to shut down a workplace and can only proceed with the permission of the relevant conciliation body.

In mid-January, workers staged a protest demanding that the factory be reopened, and that management respect the law, recognise registered trade unions and follow Arbitration Council rulings.

In a complaint lodged with the Yangon Region Arbitration Council on January 24, the factory’s workers urged that it be directed to resume operations or arrange for them to be employed by the Shyang Peng Cheng Co Ltd shoe factory, at Maekhone village, Bago Region.

Shyang Peng Cheng, which apparently has a partner relationship with Shyang Jhuo Yue, is named as a contractor on the Adidas list.

CTUM executive committee member Daw Khaing Zar Aung warned that if Shyang Jhuo Yue continued to breach the labour laws and did not resume operations and reinstate its workers, union leaders would launch an “international campaign” highlighting its relationship with Adidas.

“Adidas might need to come to Myanmar and see the situation on the ground,” she added.

Mr Stefan Pursche, a spokesperson for Adidas told Frontier the company was aware of the situation.

“The supplier in question, Shyang Jhuo Yue, has informed us in advance about talks with the relevant trade union in connection with the closure of the plant and the planned protests,” he said.

“To the best of our knowledge, management consulted extensively with the local Ministry of Labor to ensure compliance with legal requirements, including severance payments.”

He said Adidas has actively encouraged the factory management to continue discussions with the CTUM, with the involvement of the Ministry of Labour, Immigration and Population, to address possible concerns.

Adidas, Pursche added, is “committed to ensuring fair labor practices, fair wages and safe working conditions in factories throughout our global supply chain”.

Shyang Jhuo Yue’s human relations manager, Daw Shwe Yee Myint – who is also the legal representative for the company’s foreign directors, according to government documents – declined to be interviewed by Frontier.

“I will contact you if we have something to tell the media,” she said.

According to Directorate of Investment and Company Administration records, Shyang Jhuo Yue Co Ltd has six directors, five of whom are Taiwanese and one who is Japanese.

Htay Htay Win and her colleagues believe her dismissal was intended to send a warning to the factory’s employees not to be become involved in labour unions.

The harassment and persecution by factory managers of workers who become actively involved in labour union activities is common in the footwear and garments sector.

Workers who have been active in standing up for the rights of employees and have lost their jobs often find it difficult to return to work, as has been the case for Ko Ye Lynn Bo, who was secretary of the workplace union at Shyang Jhuo Yue.

“I have more than four years’ experience, but I cannot find a job yet,” he told Frontier, adding that he’d been looking for more than a month.

Ye Lynn Bo says he believes that photos, addresses, Citizenship Scrutiny Card numbers and other personal information about union leaders and more than 130 other workers at Shyang Jhuo Yue was shared by its management with partner factories.

Labour organisation leaders say the harassment of workplace rights activists is becoming worse.

“The way some factory administrators are treating basic union [workplace] leaders and workers is unacceptable and in clear breach of the right to freedom of assembly and of association,” said Khaing Zar Aung, who is also president of the Industrial Workers’ Federation of Myanmar.

Referring to Shyang Jhuo Yue, she said the shutdown of a factory with immediate effect was only allowed in the event of an emergency, such as a fire or flood.

Khaing Zar Aung added that the amount of compensation paid to the shoe factory’s workers was below the amount to which they were entitled.

“The workers had suffered heavy losses and now some are facing difficulty finding a new job,” she said.

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