LK International AG (Kjus), Mammut Sports Group AG, Complaint 140

Payment of a living wage Reasonable hours of work

The worker complained about working hours in the factory. According to the complainant employees are forced to work overtime 2 hours per day and 2 to 3 Sundays per month. The factory closes the door to prevent workers leaving the factory. According to the complainant the average overtime is 45-50 hours/month.
Secondly the complainant mentioned the salary does not cover the monthly minimum living costs. Currently the worker’s total income (including overtime) is: 2.800.000VND/month.

Overview of the complaint investigation

2015-07-22 Investigation

FWF informed the affiliates about the case and requested the affiliates to contact the supplier and ask for a reply.
Factory indicated they follow the Vietnamese labour law and limit overtime hours to 9 hours a week and 30 hours a month. They stated never to lock the door and understand overtime must be voluntary. Regarding work on Sunday the factory management indicated the factory in principle is closed on Sunday but is sometime required to work to complete orders; workers are then always allowed to substitute leave within the same month. With regards to payment the factory management stated to pay the legal overtime premium. According to management, employees who work 25 days a month will not have an income below 2.800000 VND. Minimum wage is always guaranteed for all employees.

FWF analysed the most recent audit that took place at this supplier in October 2014. There was a finding related to excessive overtime in the CAP: Some workers worked 1 Sunday in July (312 workers worked on Sunday, 20 July 2014) and 1 Sunday in September (71 workers worked on 7 September 2014) without compensating day off. The audit did not conclude payment below minimum wage. Wages paid in the factory for a regular working week were below one of the living wage benchmarks estimated by local stakeholders. The wage ladder showed the mode payment for workers in every department was just above the living wage estimate by the Trade Union. The audit did conclude interviewed workers did not understand how their piece wage is calculated.

On 12 August, the factory sent an official statement replying to all issues raised by the plaintiff. According to management the overtime hours are within the legal limit of the Vietnam labour code. Due to late shipments, Sunday work was indeed sometimes necessary, but the factory stated to give workers compensating day off the next time. Management indicated on one occasion a security guard was not aware of the policy and prevented workers from leaving when they wanted to leave the factory before overtime hours were completed. According to management, this was a misunderstanding with the new security guard and this matter was settled by the senior security supervisor and the workers.

When FWF checked the reply of the factory with the plaintiff again, there were still some conflicting messages. The plaintiff mentioned she feels overtime is not voluntary and workers were prevented from leaving on several occasions, which according to her was not only a misunderstanding with one security guard. The plaintiff in addition contradicted the wage levels that were written in the reply of the factory, while at the same time indicated not to understand the payment structure.

2015-08-13 Conclusion of the investigation

FWF concludes through the factory management’s reply and the most recent audit findings overtime hours on Sunday has taken place in the past without compensating a day off. The plaintiff stressed more overtime hours took place than the factory indicated, however there is no substantial evidence to support that claim.
The income levels, deductions and allowances were not clear to the worker and indicate better communication is needed to make workers aware of the payment structure.

2015-08-18 Remediation

Factory and FWF affiliates must work on analysing the root causes of excessive overtime. Affiliates are requested to support the factory in reducing excessive overtime hours to stay within legal limits. Overtime on Sundays must be avoided. The factory showed willingness to implement an improvement plan for reducing overtime: affiliates are requested to work on the details of this plan in cooperation with the factory. Affiliates
could analyze their own production planning to investigate whether it can facilitate the factory in implementing the improvement plan.
In addition it is recommended to discuss the wage levels with the factory and work on setting up dialogue structures to enable workers to be part of collective wage negotiations. FWF suggests to organize a dialogue session between workers, union representatives (who are part of the management) and factory management. FWF can facilitate and observe this meeting. Overtime and wages can be the topic of the meeting.
Moreover, it is recommended to organize a Workplace Education Programme training to raise awareness for labour rights and strengthen the communication between workers and management.

2015-08-18 Verification

Remediation of this case is not yet verified.
FWF will verify the compensating day off in August with the worker.

2015-08-18 Resolved

This complaint has been resolved