Tower Semiconductor Ltd V RENGO

Overview

NCP Decision Accepted
Current Status Closed
Date Submitted 18/08/2014
Date Closed 30/09/2016
Case Duration 110 weeks and 4 days
Host Country Japan  (OECD member)
Sector Electrical and Electronics 
Issue(s) Non-payment of severance pay, following closure
Provisions Cited V.6   
Case Description In August 2014, RENGO (the Japanese Trade Union Confederation) submitted a complaint to the Japanese NCP concerning non-payment of severance pay following the closure of Tower Jazz, the Japanese subsidiary of Israeli company Tower Semiconductor. In April, 2014, workers employed by Tower Jazz were informed that the company would close in July of that year. Under national labour law, severance is to be paid up to one month after the termination of employment. In the case of Tower Jazz, workers were to be paid half within the first month and half within the following six months. Further to this, Tower Jazz communicated that "in the case that the funds cannot be procured, then you will be consulted concerning an alternative arrangement". In May 2014, following a first session of collective bargaining, Tower Semiconductor agreed to consider paying compensation to ex-employees who had been psychologically damaged. Lump sum grants were to be allocated once the land and facilities had been successfully sold.
Developments The land and facilities were sold in July 2015 but, as of September 2015, the retirement lump sums that were agreed as compensation for the psychological damage of ex-employees, have not been paid.
Outcome The Japanese NCP offered the parties its '"good offices" for mediation but, so far, Tower Jazz has refused to participate.The case remains open as RENGO, the complainant, has not agreed to settle the case.

On 26 November 2015, the Japanese NCP received a reply from TowerJazz to the effect that the company was unable to agree to engage in dialogue with the complainants through the mediation of the Japanese NCP due to the following reasons:
(A) TowerJazz Japan was conscientiously implementing the measures agreed upon with the former employees and the terms agreed through the process of mediation by the Hyogo Prefectural Government Labor Relations Commission.
(B) Specifically, TowerJazz Japan has completed the payment of the full amount of severance allowances and most of the former employees found new jobs as a result of reemployment support. In addition, the company had been continuously and conscientiously engaging in collective negotiations.
© TowerJazz Japan did not consider that the various measures implemented for the former employees following the factory closure were inadequate.
G. On January 8, 2016, following the abovementioned reply, when the Japanese NCP consulted (Provisional Translation) with Tower Semiconductor about providing an opportunity for consultations, it received, on March 9, 2016, a reply to the effect that the company’s position was the same as TowerJazz Japan’s.
H. On September 9, 2016, the Japanese NCP provided the opportunity for the complainants and the enterprises involved to comment on the draft final statement and received the following comments from the complainants:
The CEO of that the TowerJazz Japan participated in collective negotiations only once and the TowerJazz Branch of Rengo Hokuban Local Union is still asking the TowerJazz Japan to participate in labor-management negotiations because there are still some issues to be solved by the enterprises involved such as the payment of provisional severance allowances equivalent to three months’ worth of the average wages. Taking these into account, the complainants consider that the TowerJazz Japan’s assertion of being “continuously and conscientiously engaging in collective negotiations” is factually inaccurate.
5. Conclusion
The Japanese NCP ascertained that, although the companies involved did not want the Japanese NCP to provide an opportunity for consultations in this case, TowerJazz Japan conducted consultations with the former employees through mediation by the Hyogo Prefectural Government
Labor Relations Commission. The Japanese NCP decided to end its involvement with this SpecificInstance in consideration of the principle that the provision of an opportunity for consultations by CPs should be based on an agreement by the parties involved.

Organisations

Lead NCP Japan NCP : Interministerial Body 
Supporting NCP Israel NCP : Single Government Department 

Companies

Multinational Company Tower Semiconductor Ltd. (Home country: Israel)
Subsidiary TowerJazz Japan Ltd. (Home country: Japan)

Complainants

TUAC Analysis

Did the NCP publish its initial assessment? status-icon
Did the case involve parallel proceedings? status-icon
Was the existence of parallel proceedings an obstacle to the NCP accepting the case? status-icon
Was the businsess relationship other than that of a subsidiary? status-icon
Was the nature of the business relationship an obstacle to the NCP accepting the case? status-icon
Did the NCP inform other relevant government departments about its acceptance of this case? status-icon
Did the NCP offer mediation or conciliation? status-icon
Did the company accept the offer of mediation or conciliation? status-icon
Did the complainant(s) accept the offer of mediation or conciliation? status-icon
Was mediation or conciliation held? status-icon
Was mediation or conciliation conducted by a professional mediator? status-icon
Did the parties reach agreement? status-icon
If yes, did the NCP publish this agreement following the consent of the parties? status-icon
If mediation was refused or failed did the NCP make an assessment of whether the company had breached the Guidelines? status-icon
Did the NCP conduct in-host country fact finding? status-icon
Did the NCP make recommendations to the company on the future implementation of the Guidelines? status-icon
Did the NCP publish its final statement or report? status-icon
Did the NCP provide for follow-up of the agreement/recommendations? status-icon
Did the NCP inform other relevant government departments about its final statement or report? status-icon
Did the NCP inform public pension funds about its final statement or report? status-icon
Did the NCP apply any consequences in this case? status-icon
Did the NCP follow the indicative timescales set out in the procedural guidance? status-icon
Was there a positive outcome for the workers involved in this case? status-icon
Did the filing of the case under the Guidelines have a positive impact for the workers involved? status-icon
Did the lead NCP play a positive role? status-icon
If different, did the home NCP play a positive role? status-icon

Related Documents

Japanese NCP  [Publication date: 30/9/2016] 'Final Statement on a Specific Instance Involving Tower Semiconductor Ltd. and TowerJazz Japan, Ltd. in Relation to the OECD Guidelines for Multinational Enterprises'
   http://www.mofa.go.jp/mofaj/files/000194210.pdf [Date URL accessed: 19/6/2017]