Blutsgeschwister GmbH, Complaint 362

CONCERNING LABOUR STANDARDS
Legally binding employment relationship
STATUS
Resolved
DATE
2018-03-21

The complainant claims that he went on leave on 23 January 2018. According to him, he wanted to fill the leave application form, but the quality manager and the finishing in-charge suggested that he may submit application after coming back. Verbal sanction for the leave was given to him. He had to return back on 25th, but came back two days late. When he called his in-charge on 27th to join his duties he was informed that another person was hired to replace him. He was informed that he may come later to take his full and final payment. The complainant went back to his native town after this episode.

Upon return he went to his factory on 20 March to get his dues, but he was offered only the wages for days worked. He claimed for bonus, earned leave payment and also one month wages as notice pay, but this was not accepted by the management. Management asked him to submit a resignation letter in order to get his wages. The complaint did not accept this and decided to file the complaint.

The complainant's financial situation is difficult and he needs the amount urgently.

Findings and conclusions

On 21 March 2018 Fair Wear received a complaint from a worker who claimed that he was terminated from his job soon after he returned from his leave of four days. He had verbally informed the management for two days leave but he had overstayed for another two days. For his full and final settlement the factory management paid only his remaining wage. The complaint did not accept this and decided to file the complaint. Investigation of the complaint revealed that the factory management owes him a notice pay, earned leave and bonus which the management said they will pay only if there is a court order to do so. The complainant did not want to pursue the matter in court because of time and money involved in it. In April 2018 the factory paid due wages and overtime for 17 hours and in return made him sign the resignation letter and a confirmation of receipt of full and final payment in exchange for his due wages and 17 overtime hours. As the complainant was in urgent need of money, he accepted. Payment of his earned leave and bonus was still due. In the month of July 2018 the brand had to end their business relationship with this factory due to some quality issue however, they were committed to solve this complaint. After a series of discussion between the brand, their agent/factory and Fair Wear, Blutsgeschwister decided to pay to the complainant. On 21 January 2019 brand made the payment of INR12700 and settled all claims of the worker thus resolving his complaint.

Overview of the complaint investigation

2018-03-25 Investigation

Blutsgeschwister informed their supplier about the complaint received and asked for their perspective. FWF reviewed the supplier's statement, an excerpt of the standing order, payment cheque and the complainant's appointment letter sent by the supplier.

2018-03-27 Conclusion of the investigation

FWF cannot conclude whether the complainant had received verbal approval for his leave request and whether he was absent for more or less than ten days before his termination. The complainant's statement and the supplier's statement differ.
In case he was absent from work for less than 10 days (four days according to him) then he cannot be terminated by the employer and is eligible for notice pay. Had he stayed absent over ten days from work, the employer may terminate his employment without notice pay as outlined in the standing order.

Regardless of whether his termination was in compliance with legal requirements, the complainant is eligible for bonus and earned leave payment. The supplier is currently withholding these benefits as they claim the complainant has caused them financial damages due to his unsanctioned absence during peak production times.

Legal reference:
Payment of Bonus: Section 9 of Payment of Bonus Act talks about disqualification of bonus and the complainant does not come under any of it.
“Disqualification for bonus.- Notwithstanding anything contained in this Act, an employee shall be disqualified from receiving bonus under this Act, if he is dismissed from service for-
(a) fraud; or
(b) riotous or violent behavior while on the premises of the establishment; or
(c) theft, misappropriation or sabotage of any property of the establishment.”

Earned Leave: Section 79 (3) of Factories Act says that in case a worker is dismissed or quits he/she is still eligible for the earned leave which accrues to him because of the work done the previous year.
“ If a worker is discharged or dismissed from service or quits his employment or is superannuated or dies while in service, during the course of the calendar year, he or his heir or nominee, as the case may be, shall be entitled to wages in lieu of the quantum of leave to which he was entitled immediately before his discharge, dismissal, quitting of employment, superannuation or death.”

2018-03-30 Remediation

Both parties were considering to file a complaint with the labour court.
The question whether the complainant was terminated illegally and is due notice pay or whether he owes the factory damage payments for unsanctioned absence may be settled there.
Alternatively FWF can facilitate a mediation meeting upon request.

Regardless of the outcome of this discussion the supplier has to pay bonus and earned leave to the complainant without further delay.

On a structural level, FWF recommends the factory to communicate it's policy of terminating workers without notice after ten days of unsanctioned absence clearly to all workers. The factory should in all cases insist on written leave applications and written approval for any changes to granted leave periods.
The company's standing order currently contains a paragraph that workers may not leave work unless their resignation has been accepted, otherwise they may be sued for damages. This constitutes forced labour and has to be rectified.

2018-04-01 Verification

The complainant informed FWF that he decided against filing a complaint with the labour court, because it would take at least two to three months to come to a judgement whereas he needed the amount urgently.
The factory has since called the complainant. He claims that he was asked to sign a resignation letter and a confirmation of receipt of full and final payment in exchange for his due wages and 17 overtime hours. As the complainant was in urgent need of money, he accepted. The factory has shared a copy of this letter with FWF.
The complainant has not received his earned leave and bonus payment.

2018-05-21 Remediation

FWF met the factory management to discuss the complaint. Management insisted that on their initial statement that the worker went on unsanctioned leave and threatened the company afterwards when he was dismissed. Management is only willing to pay bonus and earned leave when there is a court order.
When FWF called the complainant afterward he denied making threats and confirmed that will not pursue a court case for financial reasons.

2018-06-22 Remediation

The remediation points from 30th March remain. The factory has meanwhile informed Blutsgeschwister that they want to stop the business relationship and are currently not open for further improvements and complaint remediation. Blutsgeschwister will visit the factory in July 2018 to discuss how to proceed.

2018-07-16 Remediation

Brand had a meeting with their agent during their India visit and was informed that the factory would no longer source for this brand because of some issue that cropped up between the factory and the agent. The agent added that factory management has been reluctant to resolve this particular complaint apart from acting on other quality issues.

2018-11-08 Remediation

Brand enquired with Fair Wear about the amount due to the complainant. This information was furnished soon after. That brand contact person held an internal meeting to weigh the option whether brand should pay the worker themselves since the business relationship with that factory had come to an end in July 2018.

2018-11-27 Remediation

Brand informed Fair Wear that they have decided to pay the complainant. The actual payment will however be routed through their agent in India. Meanwhile, the brand consulted the factory to check on the actual dues and consulted Fair Wear for the amount and mode of payment to the complainant. Factory expressed that they would be inclined to make the payment to the worker themselves which was welcomed by brand and Fair Wear.

2018-12-19 Remediation

Factory management informed the brand that they can make the payment only by March 2019 because of some financial deficit. Since the complainant had been waiting since March 2018 the brand, upon Fair Wear's suggestion, asked the factory to pay the amount on or before January 2019 otherwise they would go ahead with the payment.

2019-01-15 Remediation

Brand informed Fair Wear that the factory management had not replied them for paying the dues until 14 January hence they have decided to pay the dues via their agent. It was suggested that complaint handler would be there to oversee the closure of the complaint and brand readily agreed to it.

2019-01-21 Verification

The complainant was paid all his dues, INR 12700 in the presence of brand representative, Fair Wear complaints handler and agency.

2019-01-21 Evaluation of the complaint

The complainant was very happy upon receiving the amount even though he had to wait for it for close to a year. The fact that the amount was paid by the brand and not by the factory was of no consequence to him.

2019-01-21 Resolved

Complainant's claim was settled by the brand hence this complaint is considered resolved. Since the brand is no longer sourcing from this factory the remedial actions on structural issues are rendered immaterial.