KUALA LUMPUR, Dec 19 — Kawaguchi Manufacturing Sdn Bhd, a plastic component supplier for Japanese electronics giants Sony, Panasonic, and Daikin, accused of forced labour practices, has agreed to pay up to RM3 million in backdated wages owed to 251 Bangladeshi workers.

An agreement was reached to settle outstanding salaries after months of negotiations with the workers. During mediation yesterday, Kawaguchi representatives reportedly agreed to pay the wages by January next year.

"The workers were represented by Mr Ethayakumar from the Malaysian Trades Union Congress (MTUC), while the company was represented by its administrative officer. The session was conducted by one of our officers to ensure a fair and transparent resolution process,” the Labour Department for Peninsular Malaysia (JTKSM) said in a statement today.

The agreement was formalised when both parties consented to several conditions outlined in a memorandum of understanding signed by all 251 workers. The workers also agreed to accept a total of over RM3 million in backdated wages.

This agreement came after months of tense disputes, with workers seeking reparations for what they and labour activists have claimed were severe forced labour practices by Kawaguchi, a company that supplies plastic components to Sony, Panasonic, and Daikin.

In September, the Port Klang Labour Office raided Kawaguchi’s office in Klang following a complaint from migrant worker rights activist Andy Hall, who has worked on multiple foreign worker abuse cases in the country.

Following the raid, the department found evidence that Kawaguchi had not paid over 200 of its Bangladeshi workers since April this year. The department also discovered that the company had withheld the workers’ passports, a violation of labour laws and an indicator of forced labour practices.

Responding to the settlement news, Hall called the outcome "offensive” and insufficient, given the gravity of Kawaguchi’s actions.

"This settlement is as offensive as it is inadequate for these victims of modern slavery. Will the company ever pay? This is not a success. It’s just a formality,” he said in a text message to Malay Mail.

Hall claimed that the workers would have to wait until January 15, 2025, for the payment process to begin, and until November 15, 2025, for the full payment to be completed.

While the three companies involved have largely remained silent throughout the dispute, they have acknowledged the allegations and pledged to take "corrective measures”.

For now, the workers are expected to be placed under the government’s rehiring programme, to be led by the Ministry of Human Resources and JTKSM.

In the statement, JTKSM confirmed that it has already identified some companies willing to hire the workers. Additionally, the Selangor State Labour Department and the Port Klang Labour Office will continue to monitor the payment of backdated salaries and the workers’ transfer to new employers until the process is complete.