Anna van Toor, JBC n.v., Modehuizen Claudia Strater B.V., Complaint 726

CONCERNING LABOUR STANDARDS
Payment of a living wage Legally binding employment relationship
STATUS
Verification
DATE
2019-06-18

All the complainants had been working since 2014 and were fired in March 2019. Two workers were working since 2012 or before, but in 2014 the factory shifted to a new location and was renamed and they became fresh workers.
About 35 to 50 workers were fired in March 2019. Women workers formed the majority among them and no legal procedures were followed in firing.
Though the company fired the workers, all workers were asked to submit resignation letter. Initially the workers resisted but the management threatened that if they did not submit resignation letters they may not be paid their legal dues, and therefore all had submitted their resignation. Earned leave and extra salary had to be paid, along with their due wages. According to them, bonus was already paid during festival time.
It seemed that the extra salary was payment of gratuity, but they reported different payments for this, some reported 1.5 months wages, some 2 months and some 2.5-3 months; however, they reported almost same length of service (5 years). Their total full and final payment ranged from INR 40000 to INR 60000.
However, none of the workers were provided any full and final payment receipt and so they did not clearly understand what was paid for what.

They requested FWF to help them getting reinstatement. According to them, the management told them that the factory was in crisis and going to close down and this is why they were firing workers; but factory is still working and therefore they need to be reinstated/rehired.
Some of these women workers were single bread earners of the family and they were facing crisis of survival.
One worker reported that she was working as supervisor in the same company before 2014, but then she resigned from supervisor post (as women workers were not cooperating) and then she became checker (without any impact on wages). She explained all this to show that she was considered good worker and it was surprising for her why factory fired her, when factory did not close down.

Overview of the complaint investigation

2019-10-03 Investigation

This complaint was shared with the brand and the brand in turn contacted the factory for its response

2019-10-23 Investigation

Factory has replied as follows:

Factory was established in the year 2014 and management has made it an audited unit and location of factory was not changed.Fifty workers resigned on their own accord due to low work as they assumed that their future is bleak and they went searching for other jobs.

Complete legal procedures were followed while they resigned and payments were made by cheque and the break up is as follows:

1.Gratuity under gratuity act (if applicable as per minimum days of attendance required per year i.e. 240 days Workers might have worked 5 years, but if they do not meet the 240 day/year minimum, gratuity is not payable)
2. Paid leaves pending
3. Earned bonus
4.Earned wages until date of resignation
5. Experienced/good workers were paid extra months notice as a goodwill gesture from the company

They have all signed and submitted resignation letters without any force or coercion. Factory has been audited by BSCI & Sedex since then and they have not found anything wrong in their audit or worker interviews. They checked the resignation documents as well as size of factory was reduced.

Signed copies of their full & final payment are with management and all workers were given copies. However, if workers need, they are most welcome to contact the factory managers and collect their copies again. The factory manager will explain to them how the final amount was calculated.

Management added that they also provide positive experience certificate.

2019-10-25 Investigation

The complaints handler/investigator was asked to contact the complainants to have their perspective on factory's reply.

2019-10-29 Conclusion of the investigation

Three out of five complainants could be contacted and they all denied management' s response saying that no legal procedures were followed in case of all 50 workers in 2019 and one complainant who was fired in 2016. They said that they were forced to resign and they had to sign on some documents and no copy of full and final payment statement was provided to any workers. Therefore they were not sure what for they were eligible and what was paid to them under different heads. They added that majority of them were eligible for gratuity, as most of them worked for 5 years or more and the period of service the workers mention always means continuous service without any interruption or break.
They agreed that some extra payment was provided but they were not sure about what was for what and how gratuity was calculated and whether it was correct payment.

2019-10-29 Remediation

Considering the fact that 50 workers left at one go (or within a very short period), workers’ argument about being fired cannot be ignored.
Fair Wear recommends that factory needs to provide the copy of full and final statement to all workers, clearly mentioning their eligibility and payments should be made accordingly if not and also factory needs to provide experience certificate to all workers.

2020-02-13 Verification

Factory has provided details on the full and final settlement made by them to three workers. Factory has added that workers are most welcome to contact the factory manager and collect their copies again, if needed and the factory manager would explain to them on how the final amount was arrived at. Management ascertained that there is no question of not paying legal dues as everything is documented and on paper. FWF will verify this with the concerned workers.