Expresso Fashion B.V., Mayerline NV, Complaint 176

CONCERNING LABOUR STANDARDS
Legally binding employment relationship
STATUS
Evaluation of the complaint
DATE
2016-02-25

The complainant claimed that he was forced to quit without receiving proper severance per legal requirements. The complainant is 58 years old and has been working at the factory for 15 years from 2001 to 2016. Before Chinese New Year on 30 January 2016, his due wage was paid by the factory and he was informed he can no longer be working because of his old age. The factory informed him that the retirement age for male worker is 55 years old.

After Chinese New Year, on 24 February 2016, the complainant went back to the factory. They gave him 3 months of wages as compensation. The complainant signed a wage journal to confirm the receipt of the severance which totals 8400 CNY (2800*3), but has not received a copy of this receipt. The complainant thinks it is not sufficient due to his long seniority.

Legal reference: The retirement age for male employees in China is 60 years old. In case of dismissal, the dismissed worker shall be entitled to a severance pay of N + 1 month salary (N is years worked at the factory). The complainant has been working at
the factory for 15 years from 2001 to 2015.

If the complainant’s claim is true he would be entitled to 16 months of salary as severance: N+1 months, that is 16 months of salary. The base for these 16 months' salary should be the average wage of his most recent 12 months. According to the complainant, he received a fixed wage of 2800 RMB per month from The factory.

As a result, in case the complaint is grounded, the severance pay should be 44,800 RMB (2800 RMB/month * 16 months). An amount of 36,400 RMB is due.

Findings and conclusions

On 25 February 2016, FWF's complaints handler in China received a complaint from a former factory worker, who claimed that he/she had been forced to resign, due to apparently passing the factory's retirement age of 55, without receiving the proper severance per legal requirements. The legal retirement age in China is 60 years of age. As the complainant claimed to have worked for the factory for 15 years, from 2001 to 2015, he/she would be entitled to 16 months of salary. FWF declared the complaint admissible and reached out to Expresso and Mayerline, the FWF members sourcing at the factory. According to factory documents, the factory began making economic compensation payments to the complainant in 2009, which can substitute severance payment. However, the complainant states that he/she did not sign any documents regarding this and that he had only received 3 months worth of severance payment. The complainant’s employment between 2001-2009 in the old location could not be proven and is not acknowledged by the factory. The economic compensation payments that the factory made to the complainant are disputed by the complainant. However it cannot be proven that these payments have not been made either, as the signatures looked realistic. FWF required management to make sure the economic compensation payments follow the legal requirements and are based on the average wage of 2800 RMB. Therefore the factory needs to pay an additional 4908 RMB to the complainant. FWF encourages its members to make sure all workers of the factory receive a copy of their contract and all wage slips. The complainant confirmed he/she received the payment and was satisfied with the outcome.

Overview of the complaint investigation

2016-02-26 Investigation

FWF informed Expresso and Mayerline about the case on 26 February 2016. Because of its larger leverage it was decided that Mayerline took the lead and contacted the factory.

FWF country representative checked the documents that the factory sent on 1 April
2016. According to these documents they started to make economic compensation
payments to the complainant in 2009. These yearly payments can substitute severance pay after dismissal. According to these documents the total compensation paid to the complainant would be 20,292 RMB (that includes the yearly economic compensation payments and the 8400 compensation paid in 2016).

The country representative checked this with the complainant, and he informed FWF that he only received 3 months compensation totaling 8400 RMB. He did not sign other documents sent by the factory, and claimed to not have received the other payments.

The complainant further informed FWFs’ country representative of the following:
- The complainant signed a labour contract with the factory, but the factory did not
provide him with a copy.
- The factory paid him monthly in cash instead of by bank and the complainant
has therefore no proof of his payments, or his employment at the factory.
- The complainant joined the factory in 2001, when it was located in Dongguan
city.
- In 2009 the factory relocated to the current operation site in Huizhou city. Human resource records of the company in the previous location were not maintained or not available for review.
- The complainant sought support for his complaint from the local arbitration committee, but his requests were not accepted by the committee, because he was not able to provide any documents to prove he was an employee of the factory.

After this conversation with the complainant, and a second check on the documents that the factory sent as evidence, FWF´s country representative concluded that the factory does not acknowledge the complainant´s employment from 2001-2008 in Dongguan.

FWF suggested a mediation meeting between the factory and the complainant. But as the complainant is now based in his hometown on more than 10 hours train distance from the factory’s location, and there is no guaranteed outcome, he declined.

Therefore FWF’s country representative investigated the case further by visiting the
factory management on 22 April. The factory showed that they paid extra amounts to the complainant between 2009 and 2014 totaling 11892 RMB. They proved this with showing the economic compensation slips signed by the complainant.

However, per legal requirements, these payments should be based on the average
wage of the most recent 12 months, which is 2800 RMB per month. In total the factory should have paid 16800 RMB (2800*6 years). Therefore the factory was required to pay the difference, which totals 4908 RMB.

2016-04-29 Conclusion of the investigation

The complainant’s employment between 2001-2009 in the old location could not be
proven and is not acknowledged by the factory.

The economic compensation payments that the factory made to the complainant are disputed by the complainant. However it cannot be proven that these payments have not been made either, as the signatures looked realistic.

Therefore the outcome of the investigation is that the factory at least should make sure the economic compensation payments follow the legal requirements and are based on the average wage of 2800 RMB. Therefore, the factory needs to pay an additional 4908 RMB to the complainant.

2016-05-03 Remediation

FWF country representative checked with the complainant who indeed received the additional 4908 RMB.

FWF strongly encourages the members to make sure all workers of the factory receive a copy of their contract and wage slips and the HR policy is adapted to include the correct retirement age of 60.

2016-05-18 Verification

FWF suggests a verification audit for the factory to verify remediation.

2016-05-18 Evaluation of the complaint

The complainant confirmed he received 4908 RMB from the factory. He was satisfied to receive this additional amount and agreed to close this case