Haglofs AB, Outdoor & Sports Company Ltd., Complaint 767

Payment of a living wage

On 3 August 2019, a former worker filed a complaint to Fair Wear about a factory still owning him/her 50,038.08 RMB for his/her wages from 2010 to 2015. The complainant informed Fair Wear that he/she checked his/her wages from the local land tax bureau (the factory used workers' real wage for taxation), and he/she found there were always deficits for his/her wages compared to his/her bank account from 2010 to 2015. His/her real wages for that period were always higher than the wages the factory transferred to his/her bank account. He/she was able to provide a document with a stamp from the land tax bureau to prove the real wages, versus the bank payment from the factory in the period from 2010 to 2015. He/she found that for five years, the factory did not paid him/her 50,038.08 RMB in total.

Findings and conclusions

On 3 August 2019, Fair Wear’s complaint handler in China received a complaint from a former factory worker, who claimed that the factory still owed him/her an accumulated 50,038.08 RMB from the period of 2010-2015. The complainant informed Fair Wear that he/she left the factory on 11 November 2017.
Fair Wear declared this complaint admissible and informed Haglofs AB and Outdoor & Sports Company Ltd, the Fair Wear members sourcing at this factory.
Outdoor & Sports Company Ltd reached out to the factory management, who claimed that the complainant had been paid the full amount and that no further payment was due on their part.
The complainant informed Fair Wear that there were considerable discrepancies in the wages stated on their payslip versus the amount deposited in their bank account, he/she provided evidence to support his/her claim. However, the factory disputed the claim, and stated they had paid the complainant in two parts, some in cash, with the complainant signing the pay roll in agreement each time.
Ultimately, Outdoor & Sports Company Ltd and Fair Wear concluded that with the evidence provided, it was impossible to verify whether the full amount had been paid or not. The complainant was informed that Fair Wear could not provide further support for his/her complaint and advised him/her to seek help from the local arbitration committee or labour bureau. This case was closed without resolution.

Overview of the complaint investigation

2019-08-13 Investigation

Fair Wear forwarded the complaint to OSC and Haglofs. This was a complicated case, since it was about the period from 2010-2015, and Haglofs was sourcing in this factory in this period. The complainant had another case before with this factory which was rejected by the court. He/she was very disappointed and wanted to file this new complaint with Fair Wear. Outdoor & Sports Company Ltd asked Fair Wear for additional information, such as when this complainant ceased work at this factory.

2019-08-21 Investigation

The complainant informed Fair Wear that he/she ceased working at the factory on the 11 Nov 2017. The complainant only realised that the factory had underpaid him/her when seeking support from the tax bureau in relation to another allegation made in court in November 2018. As he/she did not get support from the court about his/her previous allegation about social security, the complainant turned to Fair Wear to make a new complaint about their wage discrepancy.
The complainant collected evidence for his/her wage discrepancies from 2010 to 2015, showing that the monthly wage paid to his/her bank from the factory and the wage used by the factory for taxation were different. The wage discrepancy equalled RMB 50038.08 in total.
Fair Wear checked all the data from the attached evidence and found the wage data matches with the data from both the bank payment sheets and the taxation wage from the tax bureau.
The wage summary attached was translated, highlighting the tax wage and the bank payment wage.
The identity of the complainant was disclosed as it was a personal case.
The complainant confirmed he/she received correct payments in 2016 and 2017.

2019-10-25 Investigation

Outdoor & Sports Company Ltd received evidence of the former worker’s wage slips from the year 2014 from the factory. Although the figures tally with the one of the complainants, the factory claimed that in the case of the discrepancies, that the complainants wage was paid in two parts. Outdoor & Sports Company Ltd requested that Fair Wear find out if the signature on the wage slip was the complainants own, and if it was why he/she signed for wages she didn't receive.
The factory also claims that until 2015 they paid their workers in cash. From looking at the bank statements, Outdoor & Sports Company Ltd noticed that some payments have been made via ATM and others by another method. In August and October 2015, the complainant received ATM payments of RMB 4600 and RMB 5000 which do not appear on her wage sheets.

2019-10-28 Investigation

Fair Wear reached out to the complainant to request clarification on the following points:
1) To find out whether the signature on both pay slips was his/hers and if it was, why he/she signed for wages he/she didn't receive.
2) To find out if payments were paid in two parts, and to establish if the complainant can confirm this.
3) To verify with the complainant if it was common practise for the factory to pay workers in cash until 2015. If so, to establish whether the worker was paid their wages into his/her own bank account or in cash.

2019-11-08 Investigation

Fair Wear liaised with the complainant. Please find his/her feedback below:
1. He/she said that workers were requested to sign on two different payrolls; one payroll was the pay roll the complainant provided to Fair wear and the Outdoor & Sports Company Ltd, and another one was kept by factory itself. He/she said they did not know why he/she was requested to sign on two different payrolls nor did they know how to calculate wages. Therefore, the complainant signed whatever wages were requested to be signed off. The complainant claimed that after having signed, he/she was not given a copy of either payslips.
2. The complainant denied that received payments in two parts from the factory. The complainant said he/she only received the first part of the payment which was the amount of money deposited into his/her bank account. The complainant stated that the second part of the wages was not paid via bank, cash or any other means. He/she insisted all that was received was the money that was paid to his/her bank account and that there were indeed discrepancies between the bank payments and the amount that was used for taxation by factory.
Conclusion: It is confirmed on both sides, that the factory divided the payments into 2 parts which were clearly showed on the payroll and signed by the complainant. It is very unfortunate that the factory didn’t put a gross amount on the payroll and requested workers to sign it as to avoid misunderstanding and trouble. This makes it very difficult to verify what happened.

2019-11-12 Investigation

Outdoor & Sports Company Ltd and Fair Wear analysed and re-calculated the documents and payslips provided by the complainant. Both parties concluded that they could not verify whether the second part of payments was paid cash to the complainant or not. If the factory did pay the second part by cash, the complainant has no valid argument. However, the difficulty is that the complainant insisted he/she never received payments in cash from the factory. Unfortunately, the evidence submitted by the complainant was not sufficient to verify what happened.

2019-12-18 Conclusion of the investigation

This case has been extensively investigated on both sides without a substantial outcome. Fair Wear was not able to make a judgement on who is right and who is wrong in this case. From the factories perspective, all wages due were paid to the complainant, which is evidenced by the complainant's signature. From the complainant's perspective, he/she insisted that no cash payments were made to him/ her. Fair Wear was unable to make a conclusion on this matter without solid evidence.

2019-12-23 Evaluation of the complaint

The complainant was informed that since he/she signed on the payroll slip and confirmed both parts of the payments (cash & bank), and that because this case occurred a significant few years ago (2010-2015), it is difficult to prove what happened.
The factory insisted the second payments were made by cash and signed by her. Therefore, we cannot verify what happened and Fair Wear and the brand unfortunately cannot provide further support to her. Fair wear advised him/her to seek help from the local arbitration committee or labour bureau. He/she was disappointed, though he/she showed understanding at this conclusion.

2019-12-23 Closed

Since what happened cannot be verified without solid evidence, this case has been closed. Fair Wear recommended that the complainant try to seek help from the local court if he/she is still willing to do so.