On 3 and 8 April 2019, three workers filed complaints saying that:
1) workers have to work too much overtime (OT): until 20:30 from Monday to Saturday. The complainant wants the factory to reduce overtime, e.g, overtime work until 18:00 for the whole week or until 20:30 some days of the week.
2) Workers cannot refuse overtime work. Workers are required to sign two OT registration forms, a sheet with overtime from 16:30 to 18:00 and another sheet with overtime from 16:30 to 20:30. In case workers do not sign the OT registration form, they will be required to meet with the line leader and the supervisor to explain why they did not want to work overtime.
Findings and conclusions
1) Excessive overtime (OT): until 20:30 PM from Monday to Saturday. The complainant wanted the factory to reduce overtime work.
2) Forced overtime: workers were required to sign two OT forms, a sheet with overtime from 16:30 to 18:00 and another sheet with overtime from 16:30 to 20:30. In case workers did not sign the OT form, they would be required to meet with the line leader and the supervisor to explain why they did not want to work overtime.
On 5 April, the FWF members sourcing at this factory, Mammut and Schoffel, informed the factory about the case. The factory replied in details that no worker was forced to work overtime and that legislation was respects regarding the maximum of overtime allowed. Also, they said this was probably caused by a misunderstandings with workers.
The brands and the factory provided input and suggestions for improvement and how to monitor overtime. In June 2019, Mammut and Schoffel met with the factory representatives and agreed on a Corrective Action Plan (CAP) to be implemented and monitored. The factory also decided to stop power at 18:15 to make sure no work beyond overtime limit could be done.
At the beginning of July, the complaint handler talked with the workers who confirmed not working later than 18:00 anymore. They thanked FWF, brands and factory to take their grievance into account. The complaint case is resolved. However, the factory and brands will continue to work on the CAP.
Overview of the complaint investigation
On 5 April, the brands informed the factory about the case.
The factory answered that:
1. The factory always commits worker to limit overtime of 1.5 hour per day from Monday to Friday, no OT on Saturday. In case we need overtime more we always communicate with worker to let them know the situation and worker will register overtime on a volunteer basis but we always do best to eliminate this case.
2. Workers are free to refuse the overtime, we think this may be a misunderstanding. Also, workers only need to register overtime once per week, signing on only 1 set of paper, the practice to have 2 OT registration set is wrong and we will check whether some line or department are not comply with the normal practice and improve.
3. The agent didn't share the registration of OT documents since it contains detailed information about workers which we are not able to share. However, I can confirm that we have employees from the two mentioned departments that work more than 1,5 OT h per day during some weeks. As you will see, we are working on solutions – employing more people – to avoid this situation. Further, I want to add that we are constantly working with our customers to try levelling the production as much as possible since this remains one of the biggest challenges of our industry.
4. After received the complaint we did communicate with all Production Manager, Supervisor, Leader, HR, CSR to study situation and improve the case together.
On 8 April, another worker called to complain about the same issue: workers have to work overtime from 16:30 to 20:30 from Monday to Friday and from 16:30 - 19:00 on Saturday. Workers cannot refuse OT work and they have to sign in 2 sets of the overtime registration forms (OT until 18:00 and another form is OT until 20:30)
On 28 April, a third worker complained with the same issues. That worker also said workers have to punch their time record at 18:00 then return to work until 8:30 PM.
In the beginning of May, the brands informed the factory about the issue stressing importance of compliance with local law and recording overtime without falsifying or hiding records.
The supplier shared answers and the following information (on 8 May):
1)Total working hours per week:
The factory is fully aware of the legislation in terms of OT. Further, as an SA8000 certified factory which is audited two times per year, we have to comply with these rules. Our company ethics and value set also mean that we have to offer good working conditions and follow the local requirements. Lastly it is also worth mentioning that Vietnamese workers value their private life and therefore companies offering good working conditions including reasonable OT hours are more attractive working places, hence, it helps the company in terms of recruiting and retention of employees.
2) On voluntary overtime:
A seasonal working schedule based on the production plan. This plan is made, respecting the local OT rules of max 30 OT hours per month. Factory doesn't force people to work OT but we would expect people to follow the work schedule because otherwise it is very hard to ensure a reliable production schedule and the lines cannot work efficiently if some operators are missing.
One of the most common reasons for changes in the schedule is the delay in raw material deliveries that might cause a delay in the production start date.
3) Clocking out, but continuing to work:
Here, we see two perspectives:
a. Our wage system consists of different elements such as ground salary, efficiency bonus, OT payment, industry related surcharge etc. Clocking out earlier than actual working time might be an advantage for the worker because efficiency will increase and thereby the efficiency bonus will increase.
b. A team leader or manager might wrongly think it is beneficial to clock out earlier to ensure the official working hour records “look correct”. However, this is strictly against company policy.
Remediation proposals from the factory on 8 May 2019:
1) To avoid this problem, we have reconfirmed in the management team that we must comply with the legislation in terms of the maximum number of working hours.
2) We are going to reinforce to our raw material suppliers as well as transport companies that they must live up to the confirmed delivery dates, and if not, it might lead to economic consequences in the form of penalties or discounts.
3) To solve this issue we have agreed a) to remind all team leaders and managers with people management responsibilities that clocking in/out must be done correctly without any exception and b) to introduce a control procedure ensuring that if any line is working OT hours beyond our normal schedule, then production and salary book keeping will coordinate and check the clocking out time is correct.
- Production planning should not include overtime, but a buffer in case of potential delays
- Production targets should be discussed with workers. although this migh be challenging.
- Possibly targets are high because Spectre is moving factories from Latvia to Spectre, which means they might rely on Latvia productivity when setting targets, and those could be higher than what is achievable.
-Spectre has issues with seasonality, as do many outdoor apparel manufacturers. They have more than 65% of their business (warmwear) sold in the winter season, which is mostly produced between April and July. Even if Mammut and Schoeffel allow them to spread the business over a long time period, they are forced to plan with overtime. The buyers at Schoeffel and Mammut will know that they plan with overtime. The bigger issue is this reasonable overtime and within the legal constraints.
- Schöffel discusses the production planning in prior with the suppliers and we also send several forecasts and let the suppliers check and confirm if the order-quantity and delivery dates are workable without overtime. If they have difficulties we accept later delivery dates or split order-quantities in prior. I would ask here for a better explanation of the production planning.
If the fabric is nominated by us we support the suppliers in case of delays in delivery and have clear rules for the fabric producers.
FWF input for remediation:
- a remediation plan (using CAP template) should be discussed and agreed on between brands and the factory
- Overtime legal requirements must be respected
- If overtime (within legal limits) is known in production shcedule then it should be clearly shared and communicated with workers in advance, and breaks should be respected
- The factory should show how overtime is recorded and explain their system, as part of the investigation on the double register complaint.
Brands and factory met at ISPO on 26 June 2019 to discuss the complaint case. They clarified some points and agreed on the following remediation plan. Besides, factory will shut down power at 18:30 to avoid excessive overtime.
>Order and customer perspective: Currently, and ongoing, we work with customers to level the production plan so that the workers only work until 18:00 if needed. On 10 June the production plan has been re-worked again to ensure no order delivery date has been based on excessive OT.
> Management board and manager commitment: All related managers are noticed about the company rules and policies and commit to follow the regulation about OT.
> Workers and CSR: Any case of OT work after 18:00 will be tracked by CSR dept. independently whether they exceed OT limit and why they have been staying after 18:00;
Besides we encourage workers to communicate with department head/supervisor or HR/CSR dept. to solve their difficulties in daily working, and to make internal CSR dept. become effective communication channel between employee and employer.
> Tracking status: From June, CSR/HR dept. needs to follow up OT hours daily and report if there are sewing line OT after 18:00 or any abnormal OT.
> Internal communication: OT information is updated to Production team and CSR dept. to track together and ensure everyone knows about OT regulation from local law, company policy and customer requirement. In case of extraordinary reasons requiring OT after 18:00, management team agrees to explain workers affected, however, this can only happen in exceptional cases that have been approved by the plant manager.
> Local law: Vietnam Labour law is under plan to change and increase OT annual limit from 300 to 400 hrs per year.
- OT is based on voluntary basis. This means there are employees leaving at 16:30 and do not work OT;
- There are not 2 sets of OT, this may be a misunderstanding from workers. Production plan has been scheduled based on workers' capacity (working hours) so that is why we often have had "Week OT registration". But in case the line/worker wants to change the OT, they can sign on another "Daily OT registration", then HR can update the latest OT information for attendance and payroll.
- This policy is communicated with Production team already and will track if there is any case of involuntary OT.
- For new workers, they are trained and get informed on on-board date, to ensure they are aware of the company's OT rules and policies.
3) OT is recorded based on actual working hours;
- No one is forced to be come back to work after punching time record. There have been some leaders/workers who came back to rework orders or catch up with daily efficiency as they want to get more efficiency bonus;
- It has been informed to workers and other employees in production to let everyone strictly follow company's rules and policies to punch time record based on actual time worked, without exception.
- From 11 June CSR team goes checking OT after 18:00, there have been found some voluntary workers and they were requested to go home;
- From 8 June it has been communicated only to work OT until 18:00;
- From 14 June factory shuts down electricity from 18:15 to avoid worker staying for excessive OT.
It was agreed with Mammut that the factory will have seasonal production planning meetings starting from FW20. To level out production and avoid OT Schoeffel usually has seasonal planning meetings.
Two out of three workers could be reached by the complaint handler. They confirmed working until no later than 18:00 for the last couple weeks.
07/08/2019 Evaluation of the complaint
They thanked FWF, brands and factory for receiving their claims and improving working time for workers.
FWF complaint handler and complaint coordinator agreed that the CAP of the supplier and the brands was good. Thus they will leave it to these partners to follow up on implementation.