Jack Wolfskin, SALEWA, DYNAFIT & Wild Country, Complaint 154

CONCERNING LABOUR STANDARDS
There is no discrimination in employment Freedom of association and the right to collective bargaining Legally binding employment relationship
STATUS
Resolved
DATE
2015-09-16

In September 2015, the Worker Rights Consortium contacted Jack Wolfskin to report that a factory where the company has production had, without notice, dismissed 204 of its 1332 workers, including the union leadership, at the beginning of the month and without previous notice. Most of the dismissed workers (161) accepted to collect severance pay. Only 43 workers did not agree to receive this compensation as they believed that it was not fair to them and they wanted to be reinstated.
The case was brought to the Labor Department and Arbitration Court to judge, and the Arbitration Court ruled on the matter. Nevertheless 24 workers still appealed the dismissal and wanted to be reinstated.

Findings and conclusions

In September 2015, the Worker Rights Consortium contacted Jack Wolfskin to report that a factory where the company has production had, without notice, dismissed 204 of its 1332 workers, including the union leadership, at the beginning of the month and without previous notice. This was derived from a report by CTUM, the Confederation of Trade Unions of Myanmar.

Jack Wolfskin and Salewa & Dynafit immediately contacted the supplier and asked for a response. Factory Management indicated that, in order to keep the factory in business, rather than shutting down altogether and having to lay off all 1,400 workers, the factory has no alternative than down-sizing the factory by dismissing 203 poor-performance workers. This was done after consultation with several local agencies, and severance compensation was provided.

Most of the dismissed workers (161) accepted to collect severance pay. Only 43 workers did not agree to receive this compensation as they believed that it was not fair to them and they wanted to be reinstated.

The case was brought to the Labor Department and Arbitration Court to judge, and the Arbitration Court ruled on the matter. Nevertheless 24 workers still appealed the dismissal and wanted to be reinstated. The factory refused citing reputation reasons.

In April 2016, after a call facilitated by FWF, the 24 workers were allowed to return to work at the factory, under a number of conditions.

CTUM confirmed, on behalf of the factory union, that the case of the 24 workers was resolved satisfactorily. CTUM, however, maintained that it is still seeking a solution for the second group of 104 workers that were dismissed. Again, for the sake of clarify, this will be reported upon in a separate complaints report.

Overview of the complaint investigation

2016-11-30 Investigation

Jack Wolfskin and Salewa & Dynafit immediately contacted the supplier and asked for a response.
Furthermore, it was decided that FWF launches an independent investigation. For this investigation, FWF Auditor Supervisor cooperated with a local auditor, who took responsibility for off-site and on-site worker interviews. The investigation took place in November 2015, with meetings at the factory taking place on 18 November 2015.

2016-11-30 Conclusion of the investigation

The investigation revealed the following:
Factory Management indicated that, in order to keep the factory in business, rather than shutting down altogether and having to lay off all 1,400 workers, the factory has no alternative than down-sizing the factory by dismissing the 203 poor performance workers. The factory has informed the Local Labor Department at Hlaing Thar Yar Township and associated organization such as the Hlaing Thar Yar Garment Employers Organization and the Myanmar Garment Manufacturer Association about this matter. In addition, it has processed and provided the severance compensation as per the legal requirements. Management indicated that the factory announced the list of workers to be dismissed on September 8, 2015 and started handing out the severance compensation on September 9, 2015.
The majority of the dismissed workers (161) accepted to collect the severance pay. Only 43 workers did not agree to receive this compensation as they believed that it was not fair to them and they wanted to be reinstated. With the support from CTUM, the case was brought to the Labor Department and Arbitration Court to judge. The Arbitration Court ruled on 21 October 2015 the following:
Decision No. 1
a) Related to 204 workers, except those who get compensation, require to be reinstated back in their old position, salary and period of working during 7 days after the A/C decision.
b) Require pay back for workers, who were dismissed from 9 September 2015, until their reinstatement with normal wage without OT wage.
Out of the 43 workers, an additional number of workers finally agreed to take the severance pay with the additional pay as per A/C order (ref point b. above). In the end, 24 workers still appealed their dismissal and wanted to be reinstated as per the A/C order; however, despite the A/C decision, the factory continued to insist that the factory cannot accept those 24 workers back to work as they have damaged the factory
reputation and business which is harmful to the factory.
Furthermore, on 9 December, CTUM informed FWF that on the 5th of December another batch of 52 workers were dismissed, followed by another 52 on the 7th of December. For the sake of clarity, this case will be subject of a separate complaints report.

2016-11-30 Remediation

A Skype call was facilitated by FWF on 14 April 2016. The agenda was to find a solution for the 24 workers that continued to oppose their dismissal and wanted to be reinstated. Participants included the CTUM, the factory union, IndustriALL, the two brand Jack Wolfskin and Salewa & Dynafit and the factory management.
Following the Skype call, on 27 April 2016 the factory informed the brands of its decision to:
- Allow all 24 workers to resume work at the factory
- Compensate for back pay for salary during the whole court processing.
A number of conditions were stated by the factory management:
1. Union should engage in more direct talks and collective bargaining instead of always resorting to striking.
2. NSG management should treat the returning colleagues fairly and equally.
3. Although employment position and pay will not change but the actual task and working location (within the factory) will be decided by management.
4. Factory rules and regulations will strictly followed as they will have to sign the same employment contract as did their peers.
5. Failure to adhere to factory rules and regulation will be subjected to disciplinary action as according to the said rules and regulations, this is fair as to every other colleague.
6. Return date is currently set on 2nd of May (but 1st May salary will be counted).
Factory management furthermore confirmed that it has contacted all 24 workers, who maintained that they wanted to be reinstated. In accordance with the above, factory management approved and has accepted them to return.

2016-11-30 Verification

FWF was informed by the factory union and CTUM, which confirmed that the 24 workers concerned were in fact reinstated and back pay was made as per the agreement.

2016-11-30 Evaluation of the complaint

The CTUM confirmed, on behalf of the factory union, that the case of the 24 workers was resolved satisfactorily.
CTUM, however, maintained that it is still seeking a solution for the second group of 104 workers that were dismissed. Again, for the sake of clarify, this will be reported upon in a separate complaints report.

2016-11-30 Resolved

This complaint is partly resolved.