Hess Natur-Textilien GmbH, Complaint 317

CONCERNING LABOUR STANDARDS
Legally binding employment relationship
STATUS
Resolved
DATE
2018-01-02

According to the complainant, on 30 December 2017, her contract was terminated by the factory. Management allegedly did not provide any reason for termination, but merely asked the complainant to leave after recording her thumbprints on several documents. The complainant allegedly received INR 9,560, which included her salary (INR 7400) and overtime wages. She is not aware of whether this sum included any other payments (such as notice pay, earned leave or bonus). The complainant asked for a receipt but this was refused.

The worker claims that she never received an appointment letter or an ID card. She also denied receiving salary slips or ESI and PF (social security) coverage.

The complainant has been working in the factory since February 2017. She claims that she had previously spent two years working at this factory but her contract was illegally terminated. After a few days, management had called her in again, and she worked for 10 days before being dismissed again. The complainant joined another company, but after one and half months the HR manager of the first factory asked her to return. The complainant had allegedly raised her concern of frequently being dismissed, but the HR manager assured her that this would not occur again, so she decided to rejoin.
According to the complainant, these sudden dissmissals have created serious economic problems for her. Finding a new job could take time, temporarily leaving her without any income.

The complainant wants to discuss this grievance with higher management, ideally in the presence of a FWF representative.

Findings and conclusions

On 2nd January 2018 FWF's complaints handler in India received a complaint from a former factory worker. The complainant claimed that she was repeatedly dismissed from the factory after working for a short duration, being promised (verbally) a long term job. On 30th December 2017 she was fired yet again after working for ten months in this factory. The complainant was unaware of her legal rights and asked FWF to help her in setting up and mediating a meeting with the factory owner. The meeting was facilitated on 22nd April 2018 by a representative of FWF between the worker and owner along with two managers. FWF also conducted an audit at the factory in March 2018, that had been planned prior to the complaint. Based on the audit and the meeting, FWF concluded that the complaint was grounded. The worker was dismissed without the legal procedures being followed. She did not receive all legally required payments. Factory management refused to pay these. The complainant was informed about her legal entitlements by FWF, but did not want to pursue it further. She added that the new information on her rights and entitlements will be put to use if she is terminated from her current job (in a new factory). FWF recommends that HessNatur works with the factory to implement the corrective action plan that resulted from the audit.

Overview of the complaint investigation

2018-01-02 Investigation

HessNatur was informed about the complaint and agreed with FWF to plan a factory visit and a meeting between factory management and the complainant, where FWF could mediate between the two parties and investigate the allegations of the complainant. A meeting with the worker was fixed with factory management. General Manager and HR Manager were also present in this meeting. The meeting was facilitated by the FWF country representative.

2018-03-17 Investigation

FWF conducted an audit on 16th and 17th March at the factory that had been planned before the complaint. The audit team also investigated the points raised by the complainant.

2018-04-22 Conclusion of the investigation

Based on the investigation, FWF concludes the following points:
- The complainant was illegally terminated from her job. The owner was unaware of this particular incident but confirmed that hiring and firing of workers without following legal procedures is a regular practice in his factory due to fluctuating order volumes.
- The complainant had not received an appointment letter at the time of joining this factory. Only permanent workers receive an appointment letter.
- Payment of bonus and earned leave was not given either.
- No deductions for ESI or PF was done for the complainant because she was on short term employment. Social security is paid only to permanent workers.
- The payment made to the complainant upon termination included her salary and payment for overtime at single rate (instead of double the hourly rate).
- No termination notice was given to the worker nor a payment in lieu of notice.

2018-04-22 Remediation

As part of the audit in March 2018 a corrective action plan has been created, which the brand and the factory should jointly implement.

Some of the remedial measures that can be immediately implemented are:
- Management should issue appointment letters to all workers even if employed for short term.
- One month's notice should be given to workers before termination of their work contract, even if the worker is employed for short term.
- Overtime should be within the permissible limit and should be paid at double the hourly rate.
- The complainant should receive all pending dues.

Three members from management heard the grievance and expressed their inability to pay any further amount to the worker.

However management proposed several remedial steps with respect to the complaint:
- The HR personnel stated that they shall enable a more efficient dismissal system, by providing a verbal week’s notice to workers (whom they want to dismiss) so that they may have time to look out for other options. By law management should give at least one month's notice to worker before terminating their employment contract or pay one month of wage instead.
- The HR personnel added that they shall also ensure that the workers understand the written content of the documents they sign, or rather get thumb impression of workers who cannot read/write.

FWF also recommends that management should educate workers about factory policies and their legal rights. FWF further recommends to assess the recent government notification on fixed term employment contracts to ensure that all working relations are legally compliant.

HessNatur should check whether they can contribute to more stable production levels at the factory with their orders and ensure that their pricing allows for the payment of at least minimum wage and other legal benefits (social security, overtime premiums etc.).

2018-04-27 Verification

Management refused to pay the pending dues to the complainant. The complainant does not want to pursue the complaint further.

All other points will be verified by FWF in the next FWF audit at the factory.

2018-04-27 Evaluation of the complaint

The complainant was thankful to FWF for providing a platform where she could directly share her grievance with factory management. She did not want to pursue the complaint to get her dues but added that this complaint has educated her on what her rights are when she leaves a job or is dismissed.

2018-06-27 Resolved

FWF facilitated the meeting that the complainant asked for. She was informed about the dues that are legally owed to her, but she was was not willing to pursue it further. This case can hereby be considered resolved.