Workers at the Nexperia semiconductor factory in Cabuyao, the Philippines, are in a protracted struggle for better wages and against union busting by the Dutch corporation, which sells computer chips to tech companies worldwide, including Tesla and Bosch.
Nexperia operates within a special economic zone (Ecozone) in the Philippines, which encourages foreign investment by offering tax incentives and relaxed labour regulations.
The company has a well-documented history of aggressive union-busting tactics. Military personnel in full combat gear violently raided the homes of more than 100 workers in 2021, attempting to intimidate them into leaving the Nexperia Workers’ Union (NWU).
Australian Asia Worker Links and Kilusang Mayo Uno — a left-wing confederation of militant unions — organised an international solidarity mission. During a visit to the Nexperia factory on January 6, I had the opportunity to talk to the NWU leadership and address a mass union rally.
The NWU, which is affiliated with the Metal Workers Alliance of the Philippines, began negotiations with the company in September 2023 for a new collective bargaining agreement (CBA). These are similar to enterprise bargaining agreements in Australia, and address various workplace issues, including wages, working hours and leave provisions.
However, only 6% of the Philippine workforce is covered by CBAs. This reflects some of the challenges associated with decentralised enterprise-level bargaining systems, such as employers refusing to engage with unions, employers competing to reduce labour costs and use of complex outsourcing practices to fragment workplaces, thereby avoiding legal obligations to recognise unions.
Negotiations quickly reached an impasse, with pay a major point of contention. The union requested a pay rise of ₱115 (A$3.15) per day, but the company refused to offer more than ₱15 (A$0.41).
Tensions escalated further in February last year when Nexperia shut down its sensor chip manufacturing department and sacked 54 workers, including three union delegates.
The union responded by arguing that Nexperia had violated the restructuring process outlined in the existing CBA and contended that the layoffs were, in fact, a cover for union busting amid ongoing CBA negotiations.
Workers pointed out that there was no indication of a slowdown in workload — output demands remained high, and the company denied many workers’ leave requests, and required them to skip meal breaks and work over holiday periods to meet targets.
On July 31, the union threatened strike action, unless Nexperia negotiated a process for the reemployment of the “retrenched” workers.
After months of negotiations, the union secured a settlement on October 18, with Nexperia agreeing to reinstate dismissed workers as vacant positions arise. It also finally committed to engage in good faith negotiations for the replacement CBA, with the renewed possibility of improved pay and conditions.
However, the victory proved to be short-lived, as Nexperia began to take a more hardline approach in negotiations.
In response, the union’s mass member meetings agreed that strike action was once again necessary to win concessions from the company, and the union filed another notice to strike on December 10.
The situation reached boiling point on December 19 when Nexperia dismissed four union officials — including union president Mary Ann Castillo — accusing them of interfering with business operations and obstructing entry and exit points to the factory. The union officials said they were merely updating members on the latest developments in the CBA negotiations, meaning that the dismissals were unlawful and breached good faith bargaining requirements.
In response, the union has again threatened strike action, which brought Nexperia back to the negotiating table. The situation remains tense and could quickly escalate into a bitter confrontation. It is yet to be determined whether an agreement can be reached to reinstate the four dismissed workers.
[Clive Tillman is an Australian Asia Worker Links member, lawyer and PhD candidate in industrial law at Royal Melbourne Institute of Technology.]