Haglofs AB, Outdoor & Sports Company Ltd., Complaint 607

CONCERNING LABOUR STANDARDS
Payment of a living wage Reasonable hours of work Legally binding employment relationship
STATUS
Closed
DATE
2019-01-07

A worker called to complain the excessive overtime hours at this factory.
1. They have been working consecutively for more than 15 days without a rest recently; and they worked 12 or more hours a day from 7:30 to 21:00.
2. As to improve productivity, factory set a very high daily quota, which makes workers pretty tired. And factory will gradually set a higher quota if they find workers can finish the current quota. The worker complained the workload is very intensive and except 30 minutes for lunch and dinner, they work all the time from 7:30 to 21:00; if they cannot finish the quota set by factory, they have to do excessive overtime hours after 21:00 voluntarily. Meanwhile, factory required them to sign a voluntary OT sheet and if anyone did not sign the sheet, the attitude of the management will become very bad.
3. Due to the heavy workload and intensive pressure, many workers choose to quit; in this way, the most recent month's salary will be confiscated by factory.

Findings and conclusions

On 8 January 2019, a worker called to complain about the excessive overtime hours at this factory.
1. They had been working consecutively for more than 15 days without rest; and they worked 12 or more hours a day from 7:30 to 21:00.
2. As to improve productivity, factory management set a very high daily quota, which made workers very tired. Management would gradually increase the quota if they found that workers could finish the current quota. The worker complained the workload was very intensive and except 30 minutes for lunch and dinner, they worked all the time from 7:30 to 21:00; if they could not finish the quota, they had to do excessive overtime hours after 21:00 voluntarily. Meanwhile, management required them to sign a voluntary overtime sheet and if anyone did not sign the sheet, the attitude of the management would become hostile.
3. Due to the heavy workload and intensive pressure, many workers chose to leave; in this way, the most recent month's salary would be confiscated by factory.

FWF declared this complaint admissible and informed Haglofs and OSC, the FWF members sourcing at this factory. Haglofs reached out to the factory to investigate about this complaint.

Since this was not the first complaint, factory mentioned that they were disappointed that workers did not use their internal grievance mechanisms since they felt workers had, after the last complaint, improved methods to communicate to management levels. Overtime was always voluntary and worker resignation rate declined and all salaries were paid after resignation. The daily quota went down, but they would try to still improve their current workflow.
Remediation plan proposed by the factory
1. Improve communication with workers
2. Training to workers on voluntarily overtime work & grievance regulation
3. HR department to work with production planning to review the production forecast.

FWF requested the brands to provide them with the following documents or answers:
1. The attendance record if possible and plans for overtime after Chinese New Year.
2. Payslips of the salary paid before Chinese New Year and possibly the upcoming payslips.

After Chinese New Year, the factory provided the attendance record and salary sheet of February 2019 and stated that they implemented a production plan of 10 hours a day, 6days/week, 1day off every 7 days and they appointed a new factory manager, and therefore the production efficiency had improved after the CNY.

Since the given wage sheet could not be completely verified, FWF together with the brand decided to wait until the next planned audit in April 2019 to verify further. Unfortunately, during the audit it was found that the total working time per week was still regularly above 60 hours, most workers from the down filling, quality inspection, template sewing and packing sections still worked more than 3 overtime hours/day (i.e. 3.5 to 5) for 10 or more days in a month. Nevertheless, there was improvement on excessive overtime hours, since after the Chinese New Year the sewing workers and most workers worked no more than 3 overtime hours/day.

Several brands together reached out to the factory, that the maximum target for high season for all workers and without exception should be 2 hours per working day, 8 hours on Saturday and rest day on Sunday. These hours should not be concurrent over a three-month period.

Factory management responded that most of the excessive working situations had been gradually improved. The percentage of workers who worked under 60 hours had been increasing. The factory promised to keep improving workers’ working hours toward the goal the brands mentioned by mainly better production planning and release capacities to their factory in Vietnam. Management was hoping to reach the target numbers mentioned by the brands in Spring 2020.

FWF reached out to the complainant and received feedback from the complainant that the overtime hours indeed had been reduced a lot. The complainant was recently able to have 1 day off per week and work less overtime during the week. FWF decided to close this complaint. Nevertheless FWF still requested the brands in this factory to monitor the overtime hours.

Overview of the complaint investigation

2019-01-10 Investigation

Haglofs reached out to the factory to investigate about the details of this complaint and mentioned that if correct, this complaint needs to be addressed urgently and the brands hoped that the factory would be able to improve situation ASAP.
• OT must be kept within legal limits at all times
• One day in every 7-day period must be off to allow proper recovery of workers
• OT must be voluntary and without repercussions in case this is turned down
• A good tone in communication towards the workforce at all times ought to be beneficial

2019-01-12 Investigation

Factory came back with three documents
1) about the voluntary OT application sheets signed by workers
2) about the leave notification during the CNY period 3) a name list of the employees who resigned from the factory.
The factory mentioned:
"We encourage our workers to express their dissatisfaction through any grievance channel. Although we are very disappointed about many misleading statements made in the complaint, we do feel the need for us to better our current workflow and communication methods to workers. Having said that, we do feel that over course of past few months, with the help of brands and third party training, workers are able to communicate more freely to management levels than ever before, and management has made many timely improvements to better workers working condition and address their needs. In the process of continuous evolvement of our CSR system, problem will occur here and there, but we believe that with trust and transparency, we can keep grow to be better.
Below are our reply regarding details of the complaints:
-- From Oct to Dec, the worker resign rate was about 1.5%, lower than same period in the past. Pls see attachment resigning list. And even in case any worker wants to quit, the full amount salary including overtime work salary will be paid. The factory will not and never confiscate salary from workers before.
-- The daily quota of each style is decided by the standard working time in the ERP system, it won't be changed or increased randomly. In opposite, considering the actual working efficiency, we add some additional allowance to some styles, that means the daily quota is lower than before. Maybe workers still feel the daily quota high, we will investigate style by style, but It's not true the management will increase the daily quota once the worker reach it.
-- Since the workers want have more time to spend the Spring Festival holiday with their family, they required to work more days before the holiday and have more days rest uninterrupted during the holiday. So we adjusted our production plan according to their request. The factory arranged 10 more days holiday for the workers, totally 19days from Feb. 1st to Feb.19 the workshop will stop working. Please find the attached notice published in the workshop for your reference.
-- The overtime work is always voluntarily, we've set up procedure & made related training to the workers. No one can force workers to work overtime. They can refuse to do overtime work if they feel tired or they are unwilling to. Our HR team & management will go back to check if there is any violation on this procedure. Pls. find attached overtime work applicant form of today with signature of workers one by one.
Factory mentioned they were checking all the aspects on this issue, any violation we'll find will be amended immediately.

2019-01-17 Conclusion of the investigation

With the provided documents and statement of the factory FWF still requested a detailed answer about the excessive overtime hours. FWF requested the brands to please reach out to the factory again and ask if the factory can confirm or explain the situation of current hours of work in the factory? After verification FWF can look at remediation steps, if needed.
The complainant stated:
1. they worked consecutively for more than 15 day without a rest.
2. They worked 12 or more hours a day from 7:30 to 21:00.
3. Due to the heavy workload and intensive pressure, many workers choose to quit; in this way, the most recent month's salary will be confiscated by factory.

2019-01-20 Verification

We received the following feedback from the complainant:
1. From last week on, the working hours have been reduced a bit; currently they worked night OT till 21:30 on Monday, Wednesday and Friday, and worked night OT till 19:30 on Tuesday, Thursday and Saturday. They are grateful for our help to reduce their excessive overtime hours; they can accept the current overtime hours and hope after the CNY, no excessive overtime hours will be repeated.
2. The complainant still thought the daily quota is very heavy and they are under intensive workload everyday; they hope they can have 20 to 30 minutes of rest after lunch to refresh themselves.

2019-01-25 Verification

Regarding Point 1 & 2 of the complaint mentioning (unvoluntary) overtime, factory provided a working hour report of Dec. . As you may find from the report, starting from week 50, part of workers worked in Sunday in order to cover the CNY holiday leave. You can also find the statistics of the working hours of the workers from the report.
Regarding Point 3 that "due to the heavy workload and intensive pressure, many workers choose to quit; in this way, the most recent month's salary will be confiscated by factory.” is considered negative, the turnover rate is ~1.5% from Oct. to Dec., Factory mentioned they will not and never confiscate salary from workers resigned before.

Factory mentioned they have regulations of voluntarily overtime work, but they still find there is room to improve the way of communication with workers. After receiving the complaint, the factory had held several meetings with the plant manager & group leader of the workshop, strengthen the importance of the communication with workers.

2019-01-25 Remediation

Remediation plan proposed by the factory
1. Improve communication with workers, trainings on CSR regulation & communication skill to the workshop management plant manager & group leaders
2. Training to workers on voluntarily overtime work & grievance regulation
3. HR dept. to work with production planning to review the production forecast, No. of workers & related machinery in order to avoid the overtime situation
OSC reached out to the factory again and that they were pleased that these issues are being discussed in the factory and you have put forward an improvement plan.
The main concern of the brands remain the fact the workers are still working excessive hour after months of pushing to reduce. This is the main reason these problems are still arising. The production plan has to be adjusted as a matter of urgency. Please confirm when you think this will happen.

2019-02-15 Remediation

FWF requested the brand to provide them with the following documents or answers. In this way we hopefully get a good idea about the overtime made and if salaries were withhold or not.
1) The attendance record if possible and response from the factory what are their plans for overtime after Chinese New Year.
2) Payslips of the salary paid before Chinese New Year and possibly the upcoming payslips (end February) for the month of January.
3) Further the complainant requested if could have 20 to 30 minutes of rest after lunch to refresh themselves.

2019-04-01 Verification

After Chinese New Year factory came back with the attendance record and salary sheet of February 2019 and stated that they implemented the following corrective actions/responses:
1. Our production plan after CNY is 10hours a day, 6days/week, 1day off every 7 days. Actual situation is online with planning.
3. “Further the complainant requested if could have 20 to 30 minutes of rest after lunch to refresh themselves”. This is possible to arrange, but need further discussion. We’ve made communication with some workers, if add more time for lunch break may lead to late return home from work. We’ll have a small worker survey for the subject.
4. With the effort of our new factory manager, our production efficiency has improved after the CNY. She was well received by our workers, she followed our CSR policy strictly, all overtime work must be voluntary.

2019-04-01 Verification

Since an audit was planned in April and the wage sheet could not be completely verified over e-mail FWF together with the brand decided to wait until the audit was done.

2019-04-25 Verification

During the audit it was found that the total working time per week is still regularly above 60 hours.

There was partial improvement that workers do not regularly receive 1 day off per 7 days of work:
As per analysis of the attendance records, most workers had 1 to 2 days off in a month in December and November 2018 and most workers from the packing, down filling, inspection and cutting workshops as well as some individual workers from the sewing workshops worked on one Sunday in March 2019. As a result, it was frequent for workers to work consecutively for more than 7 days up to 20 or more days in Nov and Dec 2018. While, a small portion of the workforce worked consecutively for more than 7 days up to 13 or more days in March 2019.

There was improvement on excessive overtime hours are more than 3 hours/day after Chinese New Year.
"As per analysis of the attendance records of Nov and Dec 2018, most workers worked more than 3 overtime hours/day (i.e. 3.5 to 5.5) hours for 15 or more days in a month; after the Chinese new year, factory made improvement to reduce the excessive overtime hours for the sewing workers and most workers worked no more than 3 overtime hours/day.
As per the attendance records of March 2019, most workers from the down filling, quality inspection, template sewing and packing sections still worked more than 3 overtime hours/day (i.e. 3.5 to 5) for 10 or more days in a month."

2019-08-10 Verification

Several brands together reached out to the factory and informed the factory that they had recently received the FWF audit for your factory. Part of that audit has highlighted again excessive overtime in the factory. “The most pressing issues found during this audit were about the excessive overtime hours for the workers engaging in the finishing sections”

As a reminder, it was mentioned that there was a similar complaint in January. There is understanding that excessive overtime in China is always a challenge and isn’t helped by the fact that the workers want to maximise their earnings. However there is an ethical and commercial balance on the amount.
With this in mind the brands are asking that the maximum target for high season for all workers and without exception should be 2 hrs per working day, 8 hours on Saturday and rest day on Sunday. These hours should not be concurrent over a three month period.
Feedback was requested if these hours are possible and how the factory could achieve this.

2019-08-23 Verification

The feedback from the factory was the following: "Thank you for communicating with me directly about your concerns. Workers’ well being and satisfaction has also been our target to improve starting last year. Our effects have been continues since Jan. I believe most of the excessive working situations in Jan have been gradually improved (The percentage of workers who works under 60 hours has been increasing.)

For the rest of this year, we’ll keep improving workers’ working hours toward the goal you mentioned in the email, hoping to show you better results on a monthly basis. We’ll better the working hours mainly by better production planning to avoid excessive tasks being allocate on certain position. Also, Our Vietnam Factory will start to release capacities for our current customers this fall which would have a positive impact on working hours on our Chinese Factory.

As our Vietnam Facility keep releasing more capacity, we are hoping to reach the target numbers mentioned in your email by Spring 2020."

2019-09-19 Verification

FWF reached out to the complainant and received feedback from the complainant that the overtime hours indeed have been reduced a lot. They are recently able to have 1 day off per week. And they work from 7:30 to 18:30 for most days in a month, and in case of tight delivery, they work additional 1 overtime hours till 19:30. Moreover, the overtime analysis sheet sent by the factory seems to reveal the actual situation for the working hours at the factory.

2019-09-19 Closed

Since the overtime hours are reduced a lot FWF decided to close this complaint. Nevertheless we keep asking the brands in this factory to remain monitoring the overtime hours in the factory.