RENGO submits a complaint to Japanese NCP

Corporate behavior of Tower Semiconductor Ltd.

25 August 2014
On August 18, 2014, RENGO, together with its three local organizations, namely, RENGO-Hyogo, Hokuban Local Council of RENGO-Hyogo and TowerJazz Branch of the RENGO Hokuban Local Union, submitted a complaint to the Japanese National Contact Point (NCP) for the OECD Guidelines for Multinational Enterprises concerning the corporate behavior of an Israel-based company named Tower Semiconductor Ltd..

Tower Semiconductor Ltd. on March 31, 2014, made a decision to close, as of July 31 this year, its Japanese subsidiary TowerJazz Japan, Ltd.. It then communicated this decision to TowerJazz Japan, Ltd. and its employees, indicating that all of the 890 employees would be dismissed.

What is worse is that TowerJazz, Ltd. has presented an unacceptable condition for the termination of employment that “50% of the severance will be paid within a month following termination of employment, and the remaining 50% will be paid within six months after the first severance has been paid. Notwithstanding this, in the case that the funds cannot be procured, you will be consulted concerning an alternative arrangement,” despite the fact that the employment regulations clearly state “the severance payment is in principle to be paid within one month after termination of employment.”

We believe that the parent company, Tower Semiconductor Ltd., has breached the Article 6, Chapter V on Employment and Industrial Relations of the OECD Guidelines for Multinational Enterprises on the point that it did not “provide reasonable notice of ... changes to representatives of the workers” and “co-operate with the worker representatives” “in considering changes in their operations which would have major employment effects.”

We are requesting that the Japanese NCP intercede through its good offices with Tower Semiconductor Ltd. in Israel to respond to the demands of the trade union including the lump-sum payment of the full severance payment to the Japanese subsidiary’s employees whose employment has been terminated.

We are now awaiting a reply from the Japanese NCP whether this complaint will be accepted or not.