Complaints > China > Vaude Sport GmbH & Co. KG, Complaint 384

China - Vaude Sport GmbH & Co. KG, Complaint 384

Status
Closed
Country
China
Date
05/02/2018
Complaint ID
384
Member involved
Vaude Sport GmbH &; Co KG
Filing party
Worker
Filed against
Factory management
Grounded
Yes

The case

A sewing worker complained about excessive overtime (OT) and non-transparent piece prices.

The normal working hours in the factory are from 8:00 to 12:00 and from 13:00 to 17:00; workers are required to work overtime from 17:30 to 20:00 for four nights a week. However, during peak season (July and August) and when workers are unable to meet the daily production target, they are required to do additional overtime until 22:00.

The complainant also claimed that the piece price is not transparent and workers do not know how to calculate their wages. The complainant only knows that (s)he can make around 3,000 RMB per month for working about 60 hours per week and 26 days a month.

Findings and conclusions

On 2 May 2018, FWF 's complaints handler in China received a complaint from a sewing worker about excessive overtime (OT) and lack of transparency on piece prices. FWF declared this complaint admissible and informed Vaude, the FWF member sourcing at this factory. Vaude reached out to the factory management and jointly worked on a remediation plan.

Firstly, regarding overtime the factory would:
a) Train the line leaders on how to communicate with their team members when (excessive) overtime is needed.
b) Create positive incentives to encourage workers to work overtime hours.
c) Inform workers when peak season is coming and the reason for excessive OT whenever is is needed.
e)The factory would provide raining material and implement a training schedule.

Secondly, factory managers gave different reasons regarding lack of transparency on piece rate:
a) The factory would compensate workers who sewed small quantities but would not compensate workers sewing large quantities.
b) The factory would compensate workers whose total piece rate did not reach the legal minimum wage. Management was concerned that if they informed workers about this, it may discourage workers' motivation to work at a fast pace.
c) To avoid unnecessary arguments when line leaders distributed the sewing processes among their team members. All workers wanted to work on the most profitable sewing processes. However, line leaders had to take workers' ability into account. The proposed remediation was:
a) To collect questions from workers about wage calculation;
b) To answer these questions;
c) To inform workers that they would always receive the legal minimum wage and the legal overtime premiums;
d) To train line leaders on integrity when distributing the sewing processes, based on workers' sewing ability and preference, and to rotate;
e) To assign a person from Human Resources to explain workers their wage calculations, as long as workers have questions about their wage.
f)The factory would create the necessary training material and send it to Vaude.

The factory informed Vaude that they had trained all 15 line leaders on 18 May and informed all 302 workers about wage calculation on 21 May. When FWF verified this with the complainant, s/he did not know about the training to the line leaders. The complainant said that since the complaint was filed on 2 May 2018, nothing had changed: piece price was still unclear and overtime hours were still happening during peak season. S/he made some additional complaints:
1) On bribery to group leaders for higher salary.
2) On workers only having a savings book rather than a debit card, which meant that they always had to go to the bank to receive their money.

FWF's complaints handler contacted the complainant who confirmed that the problem about the debit card had been solved. S/he also understood that achieving more transparency on piece rate is a longer-term process.

At the end of 2018, Vaude mentioned that they would stop sourcing at this factory. As a consequence, FWF had to cancel the verification audit planned for 2019. Vaude discussed the complaint with the factory again and emphasised how important it is for workers to know transparently about their wages. Regarding overtime, the factory's management informed Vaude that workers were informed enough in advance if overtime would take place. As it was not possible to verify this statement, this complaint is closed but cannot be considered resolved.
See details

Overview of the complaint investigation

05/09/2018 Investigation

Vaude contacted factory management to discuss the complaint case and make a plan on how to remediate the grievance.
The factory responded that regarding overtime, compared to the previous year, the factory started the pre-production work earlier. They hired additional workers to smooth the working hours during peak season and avoid excessive overtime.
Vaude discussed with their China team to follow up on the over time situation during their in-line inspections in peak season. Regarding the calculation of the piece price, the factory management plans to train their workforce again in how to calculate their wages.

05/17/2018 Remediation

Vaude's China staff and the factory management have drafted a detailed remediation plan:
1. Excessive and compulsory overtime:
Though overtime is not compulsory, management realises that the tone line leaders use to inform team members about overtime may sound like a command, instead of a request.

Therefore the remediation steps are:
a) Training of line leaders on how to communicate with their team members when overtime is needed;
b) Create positive incentives to encourage workers to work overtime;
c) Inform workers when peak season is coming and the reason for overtime whenever it is needed.
The factory would provide training material and implement a training schedule.

2. Price unit for piece rate
Managers say they are unable to inform workers about the piece rate for various reasons:
a) They are doing various styles for several brands. The price unit is fixed for each sewing process, but not for quantity of each sewing process. The factory would compensate workers who are sewing a small quantity and no compensation to workers who are sewing a large quantity.
b) The factory also gives compensation to workers whose total piece rate does not reach the legal minimum wage. Management is concerned that if they inform workers about this, it may discourage the workers' motivation to work at a fast pace.
c) To avoid unnecessary arguments when line leaders distribute the sewing processes among their team members. All workers want to work on the most profitable sewing processes. Line leaders also need to take workers' ability into account when allocating the sewing processes among workers.

The proposed remediation to this is:
a) To be open to and collect questions from workers about wage calculation;
b) To answer these questions;
c) To inform workers that they would always receive the legal minimum wage, and the legal overtime premiums;
d) To train line leaders on integrity when distributing the sewing processes based on workers' sewing ability and preference. Line leaders would be asked to change the sewing processes from time to time, to make sure all workers in the same team would have an equal chance to do the most profitable sewing processes.
e) To assign a person from Human Resources to explain to workers how to calculate their wages.
The factory would create training material and send this to Vaude.

The factory trained all 15 line leaders on 18 May, and informed all 302 workers about the wage calculation on 21 May.

To help the factory with keeping to reasonable working hours, FWF urges Vaude to analyse how their orders may contribute to overtime during peak season. Vaude already has a strong production planning in place. Therefore it may be more helpful to cooperate with other large buyers of the factory, to reduce their combined pressure on the factory during peak time.

The complaints handler would contact the complainant to check back how the training was received by workers and whether line leaders improved their communication style when discussing overtime.

06/04/2018 Verification

FWF contacted the complainant who was unaware about the training provided by factory management to the line leaders. This might be because the complainant is a production worker, and therefore is not aware about the training of line leaders. The complainant said that since the complaint was filed on 2 May 2018, nothing changed.
The complainant still did not know how piece price was calculated, and overtime hours were still a problem in peak season.

06/19/2018 Remediation

The real proof of the pudding about how overtime is communicated will be around July/August when the factory will experience peak time. Therefore, FWF recommends that supervisors are reminded of the proper use of tone to ask about working overtime when peak season starts. Additionally, changing the behaviour of line leaders is something that doesn’t happen overnight. The tone that line leaders use when asking workers to work extra hours requires ongoing attention. FWF suggests to have the training repeated several times a year.
FWF suggests to publish the piece price for each sewing process by visible posters in prominent places in the workshop.

FWF recommends:
1. To publish the piece price for each sewing process, and
2. Publish the range of compensation according to the quantity.

In addition, on payment day, the newly assigned person from HR informs workers that if they have questions about their wage calculations, the person is available to explain this.

08/30/2018 Verification

After a couple of attempts, the complaints handler reached the complainant to verify if any progress was made. Besides his/her response that no improvements had been made, the complainant added other issues:
1. The complainant stated that they cannot learn about the unit price without authorisation from the plant manager or other top managers. They do not approach the finance department as they are afraid of being identified. The plant manager and the group leaders claimed to not know the unit price. However, the group leaders (who are trusted subordinates, relatives or friends of the plant manager) are the people responsible for deciding on the final unit price. According to the complainant, the group leaders and the plant manager discuss the unit price on a monthly basis and they decide how to set the final unit price. If some workers make a higher piece wage, they would retrospectively reduce their piece wage a bit to 'keep a balance'.
3. In addition, the complainant stated that some workers would try to bribe the group leaders by giving some petty favours to increase their wages.
4. The complainant mentioned that most workers in this factory are local people who have a family to take care of and they do not want to leave the area to make a living. The complainant claims that the factory always takes advantage of this weakness and most workers have to tolerate factory's unreasonable practices. An additional complaint was that the factory pays workers via a bank that only provides a savings book, not a debit card. This way, when the wage is paid, workers have to go in person to the bank (only available on Sundays) and bring their savings books to receive their money. Workers hope to receive a debit card to withdraw their money at the ATM machine anytime they wish. The factory made all workers apply for two debit cards from another bank without their consent. The debit cards were kept by the factory and not distributed to workers. The complainant found these two debit cards through his/her mobile app and found out that they were inactive.

10/05/2018 Verification

The factory sent a video where the deputy general manager explained piece rate and the introduction of debit card to workers. In the video, the deputy general manager stated that labourers are their most important asset and they are welcome to go to the financial department if they have any questions. Also, the factory sent a document signed by workers for receiving their debit card and records showing that they are using their new debit card successfully.

FWF also contacted the complainant to check with him/her about the bank debit card and the transparency on piece price. He/she said the factory had solved the problem of the debit card and that workers were now receiving payments on their debit card. This meant that they no longer had to go to bank in person to withdraw their salary and they could go anytime to the ATM.

However, despite the deputy general manager saying that workers could approach the finance department anytime, the piece rate was still not clear.

10/14/2018 Verification

After a week, FWF asked the complainant for an update on the status of the complaint. He/she understood that achieving more transparency on piece rate is a longer-term process. FWF asked Vaude if there was any further evidence of their proposed remediation to train line leaders on how to communicate with their team members on overtime, especially during peak season, and if there had been any improvement regarding transparency on piece rate.

11/06/2018 Evaluation of the complaint

Unfortunately, Vaude informed us that they were phasing out of this factory and therefore we could not resolve this case. FWF informed the complainant and apologised.

12/11/2018 Closed

Vaude confirmed that they would no longer use this factory. Therefore, FWF had to cancel the verification audit in early 2019. This was very unfortunate for the complainant since he/she hoped for a gradual improvement with the assistance of Vaude. Vaude discussed the complaint with the factory again and emphasised how important it is that workers know transparently about their wages.
Regarding overtime, the factory's management informed Vaude that workers were informed enough in advance if overtime would take place. It was not possible to verify this statement. As such, this complaint is closed but cannot be considered resolved.

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