Complaints > Bangladesh > The Cotton Group S.A. (B&C), Stanley and Stella S.A., Complaint 605

Bangladesh - The Cotton Group S.A. (B&C), Stanley and Stella S.A., Complaint 605

Status
Resolved
Country
Bangladesh
Date
01/01/2019
Complaint ID
605
Members involved
The Cotton Group and Stanley and Stella S.A.
Filing party
Worker
Filed against
Factory management
Grounded
Yes

The case

The complainant, who is a member of the Anti-Harassment Committee (AHC), indicated that workers of the factory protested against the factory management on 26 December 2018 about the increase in basic minimum wage (which was lower than expected) and the termination of the previous CEO. When the new CEO was appointed, different kinds of problems arose, which were considered negative for workers (e.g. delayed wage payments). The situation escalated with workers even attacking the new CEO who managed to escape.

To control the situation, the local chairman of the area told the protesters that their demands will be considered, while at the same time threatening the protesters to rejoin work in the factory, indicating that he will personally see each and every one who did not join the factory again. He declared that the factory will remain closed from 27-31 December and asked all the workers to rejoin work on 1 January 2019. He also promised that he will sit with the management to discuss their demands.

On 1 January 2019, all the workers re-joined work, as per the chairman’s request. However, on that day the chairman appeared accompanied with some powerful people of that area, police officers and people who are related to the defence forces. He selected some 100+ workers who were considered to be directly or indirectly involved in the turmoil. He subsequently threw them out of the factory without further discussion. During this process, they seized the cell phones from the workers who were dismissed and broke their sim cards, so that affected workers could not contact anyone immediately.

The complainants want justice for all the affected workers, i.e. reinstatement in the job or at least payment of entitled legal benefits, provident fund, severance pay according to years of service, earned leave compensations, etc. The complainants mentioned that if they are proven guilty, factory management can take disciplinary action.

Findings and conclusions

On 1 January 2019, FWF received a call to the complaints helpline in Bangladesh. The complainant, who is a member of the Anti-Harassment Committee (AHC), indicated that workers of the factory protested against the factory management on 26 December 2018 about the increase in basic minimum wage (which was lower than expected). To control the situation the local chairman of that area told the protesters that their demands would be considered, while at the same time threatening the protesters to rejoin work in the factory. He declared that the factory would remain closed from 2 -31 December and asked all the workers to rejoin work on 1 January 2019. On 1 January 2019 all the workers re-joined work, as per the chairman’s request. However, on that day the chairman appeared accompanied with some powerful people of that area, police officers and people who are related to the defence forces. He selected some 100+ workers who were considered to be directly or indirectly involved in the turmoil. He subsequently threw them out of the factory without further discussion. The complainants wanted justice for all the affected workers, i.e. reinstatement in the job or at least payment of entitled legal benefits, provident fund, severance pay according to years of service, earned leave compensations, etc. The complainants mentioned that if they were proven guilty, factory management could take disciplinary action.

FWF immediately contacted Stanley & Stella, the FWF brand sourcing at the factory. A joint meeting was held on 26 February 2019 in the factory with the participation of the brand, factory management and FWF. The purpose of the joint meeting was to discuss, verify and solve the forceful resignations that occurred in the factory on 1 January 2019. During the meeting, the General Manager of the factory gave his account of what happened from 23 December 2018 to 1 January 2019. The factory management acknowledged that there was worker unrest following a meeting that was arranged by management to explain about the new minimum wage. This misunderstanding led to workers laying down their work, which led to the factory closing down between 27 and 31 December 2018. Subsequently, on 1 January, when workers returned to the factory to resume work, the management made a declaration to all the workers stating that every worker that felt unsatisfied with the salary increase, could leave the factory by voluntary resignation. Management found there were more than 100 workers who did not want to continue and who willingly resigned. Management subsequently prepared a salary sheet of 111 workers who were willing to resign. According to the management, out of 111 workers, final settlement was arranged only for 84 workers. Out of the 27 remaining workers, 14 reported to the Bangladesh Garment Manufacturers and Exporters Association (BGMEA) and the factory therefore had to settle through BGMEA. Factory management shared the list of 111 workers with the FWF team.

FWF found chronological similarities between the manager’s statement and FWF offsite investigation report up until the moment of when the forceful resignations happened. Considering the statements of the complainants, as well as the management, and observing the discrepancies between the management statements and the findings of the document inspection, FWF concluded that the process was in fact pre-planned. However, FWF could not find solid proof on whether the resignation process was forceful or voluntary when the signature of workers matched the resignation letter.

FWF verified whether the resigned workers were paid their legal dues. In this regard, it is important to note that workers had in fact received their legal dues like salary, overtime, service benefit (if entitled) , earned leave (if entitled) provident fund (if entitled). Based on the complaints received, FWF made a list of 31 workers and reviewed the personal files of those workers. Among these 31 workers, it was confirmed that 24 were paid as per law and the amount was similar to the amount confirmed by the complainants during the offsite investigation. Management also shared photographic evidence of those payments. Out of 31 complainants, 7 were yet to receive their payments.

FWF verified that the final settlement of the remaining 27 workers (14 settled through BGMEA + 13 who were yet to receive their dues from the factory) was completed. From FWF’s list, out of 31 workers, 24 workers received their final settlement before the meeting of 26 February, while the remaining 7 workers received their final settlement amount gradually untill March 27. FWF coordinated with the factory management and the complainants and advised them on when they could go to the factory to receive their payment. FWF consequently followed up with all the workers and confirmed that they had all received their due payments. All complainants expressed that they were satisfied with with the outcome.
See details

Overview of the complaint investigation

02/26/2019 Investigation

A joint meeting had been held on 26 February 2019 in the factory with the participation of the brand (Stanley & Stella), factory management and FWF. The purpose of the joint meeting was to discuss, verify and solve the forceful resignations that occurred in the factory on 1 January 2019. The Country Manager of Stanley & Stella made certain that the management would cooperate and provide full support. The following emerged from the meeting.

Brief from Factory management:
The General Manager of the factory gave his account of what happened from 23 December 2018 to 1 January 2019. According to him, on 23 December a Worker Participatory Committee meeting was called and in that meeting workers representatives requested the management to share information with workers about the new minimum wage increase, as workers did not understand how the new wage structure would be implemented at the factory.

Considering the concern from the workers representatives, management organised a presentation on 24 December in the training centres of each of the two production facilities for some 100 worker representatives and senior workers. During the presentation, the factory management indicated that the salary of each worker will increase with not less than BDT 1,200. Through that presentation, senior workers misunderstood that, even though their total salary will increase, the basic salary would remain the same. They subsequently expressed their dissatisfaction and management tried to make them understand that it is the government declaration and management cannot increase wages beyond the government declared wage.

The problem started from there and on 25 December workers decided to slow down the work. Eventually, workers left the factory floor, and without conducting any vandalism, started to chant a slogan demanding a proper wage increase. On 26 December, workers again slowed down the work. Management tried to convince workers to resume work by talking to individual workers and explaining about their salary increase and calculation. However, management failed to make them understand and, as a result, workers left the factory and blocked the road in front of the factory. Because thousands of workers blocked the road, the traffic jam reached the nearby area. The local chairman therefore came to calm down the situation, but he did not succeed in calming down workers. At one point, the local chairman decided to declare that the factory should close until 1 January. However, this was not properly discussed with factory management and because of some important shipment planned, the factory management sent text messages to all workers requesting them to return to work on 27 December.

On 27 December, when workers arrived at the factory, they did not go to the work floor, rather they started protesting again. Considering the situation, including pressure from the local police station and the upcoming national election on 30 December, the factory management had no other choice than to close the factory until 1 January 2019.

Subsequently, on 1 January the management made a declaration to all the workers stating that every worker that felt unsatisfied with the salary increase, could leave the factory by voluntary resignation. Management found there were more than 100 workers who did not want to continue and who willingly resigned. Management subsequently prepared a salary sheet of 111 workers who were willing to resign.

According to the management, out of 111 resigned workers, the final settlement was done only for 84 workers. Out of the 27 remaining, 14 reported to Bangladesh Garment Manufacturers and Exporters Association (BGMEA) and the factory therefore had to settle through BGMEA. Factory management shared the list of the 111 workers with the FWF team. After the resignations, management paid the salary to those 111 workers and indicated to them that if there were other legal dues (like service benefit, provident fund, etc) management would calculate that and pay with the final settlement at a later time. Factory management denied all the claims of workers about broken mobile phones, taking of SIM + memory cards, beating.

FWF investigation:
FWF found chronological similarities between the manager’s statement and FWF offsite investigation report up until the moment of when the forceful resignations happened. Inconsistencies observed include the following:

1. In the workers' personal files there were no records of the date of payment.
2. All the resignations had been taken on 1 January 2019, except for one worker for which the date was 8 January 2019.
3. Seven files indicated a resignation date 01/11/2018, which appeared to have been done intentionally to cover the notice period as per law. To clarify, there is a legal provision that states that if workers would like to give a willing resignation then it should be given 2 months before leaving the job. FWF assumed that for this reason management (falsely) back-dated some (7) resignation letter, but failed to maintain the process for all the workers concerned, which would explain why only seven files indicate the resignation dated on 01/11/2018.
4. Some resignation letters had the same the handwriting.
5. Normally the factory management would disburse the salary during the second week of every month. Surprisingly, however, the management provided FWF a list of 111 workers for with the salary sheet was dated on 1 January 2019.
6. The General Manager told FWF team separately that if they could have given the workers their pay-slip on 25/26 December instead of 1 January, then the unrest might not have happened. So, the manager’s statement is a kind of indirect confession of their mismanagement.

Additionally, management indicated that the local chairman went to the factory in order to calm down workers following the blockage on road. According to the complainants, this is simply not true. According to the workers, the Chairman and police officer from local police station are always called by factory management to settle down whenever there is an issue with workers. Furthermore, on 1 January the local chairman, together with police officers, came to the factory in the morning for settling the resignations with the listed 111 worker.

02/26/2019 Conclusion of the investigation

Conclusions:
1. Considering the statements of the complainants, as well as the management, and observing the discrepancies between the management statements and the findings of the document inspection, FWF concluded that the process was in fact pre-planned.

2. However, FWF could not find solid proof whether the resignation process was forceful or voluntary when the signature of workers match the resignation letter.

3. FWF verified whether the resigned workers are paid their legal dues. In this regard, it is important to note that workers have in fact received their legal dues like salary, overtime, service benefit (if entitled) , earned leave (if entitled) provident fund (if entitled). Based on the complaints from workers received, FWF made a list of 31 workers and reviewed the personal files of those workers. Among the 31 workers, it was confirmed that 24 were paid as per law and the mentioned amount is similar to the amount that was confirmed by the complainants during offsite investigation. Management also shared photo evidence of those payments. Out of 31 complainants, 7 had yet to receive their payments. Management committed that they will settle the matter within the first week of March. The workers who were interviewed by FWF indicated that they were satisfied with this outcome.

4. Factory management committed to follow the same procedure for all resigned workers and would call them to pay their dues amount through final settlement in accordance with the law. In this regard, out of 111 workers, 27 had yet to receive their final settlement. Out of these 27, 14 had to be settled through BGMEA.

5. The factory management is facing pressure from different corners, including from some other buyers. During the exit meeting, in which both the Executive Director and CEO participated, the Executive Director expressed its commitment to do better in future.

Recommendations / Follow-up:
FWF will follow up the final settlement of the remaining 27 workers (BGMEA 14 + 13 who yet to receive their dues). From FWF’s list, out of 31 workers, 24 workers already received final settlement amount and they were happy with the outcome. FWF will follow up to ensure the remaining 7 will also receive the correct final settlement.

Furthermore, follow up is needed by brands to ensure factory management constructively considers the lessons learnt from this experience and invests in improving communication between management and workers. FWF suggests that management could have made workers understand about increased minimum wage in groups like other factories did. Generally speaking, the lack of communication between management and workers creates the potential for unrest and, unfortunately, such kind of disasters. Management should work on raising awareness among the workers and develop stronger communication between both parties. Brands are suggested to follow up to ensure the factory will invest in strengthening the internal communication channel like AHC and WPC.

Finally, the country manager of Stanley & Stella told the management that when complaints are reported to FWF, management needs to take the complaint positively and handle it with importance so that the issue can be stopped before it escalates. Stanley&Stella adequately explained to management the supportive role of FWF in resolving the issue. He added that both brand and management need to be more careful when handling complaints and follow up timely and diligently. FWF was very appreciative of the very positive role played by Stanley&Stella, which was instrumental in solving the complaint.

03/27/2019 Resolved

FWF verified that the final settlement of the remaining 27 workers (14 settled through BGMEA + 13 who were yet to receive their dues from the factory) was completed. From FWF’s list, out of 31 workers, 24 workers received their final settlement amount before the meeting of 26 February, while the remaining 7 workers received their final settlement amount gradually untill March 27.

FWF coordinated with the factory management and the complainants and advised them when they could go to the factory to receive their payment. FWF consequently followed up with all of the workers and confirmed that they had all received their due payments.

All complainants expressed that they were satisfied with with the outcome.

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