ALBIRO AG, Haglofs AB, Complaint 141

Legally binding employment relationship

The complainant claimed the factory he/she was employed closed down. The management had to lay off over 300 employees. According to the complainant the factory owed the workers 2 months of salary of July and August 2015. An agreement was reached to settle the outstanding wages on 14 September with the condition that they helped the factory to finish the last pending orders. On 16 sept the worker sent a message that the due wages were not yet received.
Secondly, the complainant was inquiring about the severance pay for workers as most of the employees have been working at the factory for many years. This issue has been submitted to the local labour bureau for remediation.

Findings and conclusions

In September 2015, FWF’s local copmlaints handler in China received a complaint regarding a shared supplier of FWF members Albiro and Haglöfs. According to the worker who complained, the factory had closed down and had not paid the agreed severance pay.

An investigation performed by FWF and the member companies involved revealed that the complaint was grounded. After being prompted by the companies, the factory did pay the workers all of the wages that were due. Mediation by the labour department had resulted in a severance package, and while this package was not compliant with the labour law, it was accepted by the workers. Therefore, no further remediation was required. The complainant confirmed the receipt of the agreed wages.

Overview of the complaint investigation

2015-09-17 Investigation

FWF informed the members about the case. The members immediately contacted the supplier and asked for a reply. The factory confirmed they indeed had to terminate the employment contract of most production workers. The factory experienced a strike and labour disputes during the lay-off procedure and involved the labour department for mediation. According to the management an agreement was settled between the management, labour representatives and the labour department, which included the acceptance of a severance package. Most of the production was transferred to another factory owned by the company in Hunan province.

2015-09-24 Conclusion of the investigation

Based on the above, FWF found the case grounded. FWF checked the reply of the management with the complainant who confirmed the following:

o In the meantime the due wages of August and September had been paid.

o All terminated employees accepted the severance proposal, which was indeed mediated by the labour department.

The agreed severance proposal is not compliant with the labour law: workers are paid severance at 66% of their average monthly wage in proportion to the seniority. The law requires the severance is N+1 month of salary * 100%. (N refers to seniority). For instance, if workers with 7 years of seniority, they shall be entitled to 8 months of salary (7+1).

However, given that this proposal is accepted by workers and mediated by the labour department, there is no further action remediation required.

2015-09-24 Remediation

N/A since the case was already solved during the investigation period.

2015-09-28 Verification

The settled agreement was verified by FWF verified through the complainant.

2015-09-28 Evaluation of the complaint

The complainant stated they had to accept the agreement as they realised they were losing their job in any case. Most workers were satisfied with receiving at least their due wages and a severance pay.

2015-09-28 Closed

This complaint is closed