DW-Shop GmbH, Complaint 128

Payment of a living wage Reasonable hours of work Legally binding employment relationship

Two employees who said they had been dismissed for refusing overtime. They claimed that their severance pay had been too low and that their salary was below the legal minimum wage.

Findings and conclusions

In May 2015, FWF’s complaint handler in India received a complaint about a supplier to DW Shop concerning two employees who said they had been dismissed for refusing overtime. They claimed that their severance pay had been too low and that their salary was below the legal minimum wage.

During an earlier audit conducted by FWF in April 2015, the auditors had found that the workers they interviewed were heavily coached and many of the documents were forged.

Given the audit outcomes and additional information gathered during the investigation about the complaint, FWF concluded that the complaint was likely to be grounded, but it was not possible to prove this. Management of the factory denied all allegations.

FWF and its member company DW Shop outlined a proposal in which additional severance pay was to be made to the complainants. But when the complaints handler called them, they said they had been paid an additional amount by the factory and wanted to drop the complaint.

FWF will add the information collected to the audit outcomes. DW Shop is required to follow up on the ensuing corrective action plan (CAP). FWF will verify the corrective action in early 2016.

Overview of the complaint investigation

2015-06-25 Investigation

A FWF audit on 28th and 29th April showed, that several documents were falsified and forged (for instance, different signatures were used for the same worker). Most importantly, production records were not shown to the team, and management stated that they were destroyed.
Furthermore, workers appeared to be heavily coached on the days of the audit. Complete contradictions were observed from the interviews gathered during offsite and the ones received during onsite visit regarding issues like excessive overtime hours and lack of system for grievance handling.
Therefore, it was not possible for the audit team to draw sufficient conclusions during the audit.
FWF also received another complaint regarding similar topics, but the worker terminated the call before the FWF complaint handler was able to clarify all issues. The worker was not reachable after this call.
FWF sent the audit report and the complaints report to DW-Shop and asked them to get feedback from factory management regarding the claims.
Factory management claimed, that the workers resigned on their own wishes, that they were paid legal minimum wages and they did not work overtime. Factory management denied that excessive overtime happened at the factory. They stated that the plaintiffs received an appointment letter upon joining and a settlement payment of Rs. 3.485 (husband) and Rs. 1.498 (wife). Copies of the appointment letter, resignation letter and
settlement payment were sent to DW Shop and FWF.

2015-06-25 Conclusion of the investigation

FWF’s local complaint handler received the document sent by factory management. She found that none of these documents were shown during the days of the audit. Therefore, FWF cannot authenticate these documents unless they are corroborated with other documents or worker interviews.
During the audit end of April 2014, FWF found that many relevant records and documents (among them appointment letters of workers as well as production records) were not available or forged. Factory management denies this finding.
An off-site visit by the FWF audit team confirmed that there was Sunday work at the factory. During on-site interviews, workers appeared to be coached.
Considering this as well as statements from workers during off-site interviews indicating overtime and payment below minimum wage as well as another similar complaint received via the FWF helpline, FWF concludes that the complaint is likely factual.

2015-06-25 Remediation

While FWF concludes that the worker’s claim is probably more valid than the factory’s claim, relevant documents to verify this are not available.
FWF therefore calculated the settlement payment based on legal minimum wage using the working time claimed by the worker as well as working time claimed by factory management. It was suggested that factory management pays the workers an amount ranging between those two calculations.
When FWF called the plaintiffs to confirm whether they would be willing to accept such a solution, they were informed that factory management had meanwhile paid them additional settlement. The workers did not want to disclose the amount and asked FWF to close the complaint.
The claims of those two workers regarding their settlement will therefore not be pursued.
However, FWF asks DW Shop to remediate the following points together with factory management:
- All workers must be paid at least legal minimum wage of 6.735 Rs.
- All documents must be kept according to legal standards. This includes personal documents of workers such as appointment letters, resignation letters and settlement payments as well as production records and overtime registers.
- Factory management must set up a termination and leave policy compliant with national law and communicate this to workers.
- Overtime must be within legal limits and paid correctly (overtime premium of 200% according to national law).
Since factory management denies that their records were non-compliant, FWF suggested to DW Shop that local DW Shop staff together with a FWF document inspector visit the supplier in order to agree on a remediation plan.

2015-06-25 Verification

FWF will conduct a follow-up document check or audit to verify remediation at the beginning of 2016.

2015-06-25 Evaluation of the complaint

The plaintiffs thanked FWF for their efforts.

2015-06-25 Closed

This complaint is closed.