Madness-The Nature Textile Company GmbH, Complaint 130

CONCERNING LABOUR STANDARDS
Employment is freely chosen Payment of a living wage Reasonable hours of work Legally binding employment relationship
STATUS
Resolved
DATE
2015-07-11

In July, a (former) employee of a factory in India filed a complaint, claiming that he had been forced to resign when he refused to work (excessive) overtime. In addition, the wage he was paid didn’t cover the overtime he had already worked, and he did not receive full social security benefits.

Findings and conclusions

In July, a (former) employee of a factory in India filed a complaint, claiming that he had been forced to resign when he refused to work (excessive) overtime. In addition, the wage he was paid didn’t cover the overtime he had already worked, and he did not receive full social security benefits.

The complaint was investigated, and on the basis of available documentation, the situation was mediated by FWF to the satisfaction of both parties. Nevertheless, the complainant filed a police report regarding alleged assault by a supervisor, and this is being pursued outside the FWF complaint mechanism.

As part of its remediation efforts MADNESS should continue to facilitate and support the application of legally binding employment documents and the provision of social security according to Indian law. It should also help ensure that wage structures are clearly communicated, and that the root causes of overtime are addressed.

These points under remediation will be verified during a verification audit in the first half of 2016, and during the 2016 Brand Performance Check.

The complainant agreed to the compromise concerning payment facilitated by FWF. He
has however filed a report with the police regarding the alleged assault by the
supervisor. It was agreed that this would be pursued outside the FWF complaint
mechanism.

Overview of the complaint investigation

2016-04-13 Investigation

FWF informed Madness about the complaint, which discussed it immediately with its supplier. Factory management stated that the worker left on his own wish and was not forced to resign due to refusing overtime.

An FWF audit in November 2014 found excessive overtime as well as a lack of legal documents and social security payments. According to Madness, the supplier has since implemented legal employment relations and paid social security. This has not yet been verified by a FWF audit.

FWF’s complaint handler met with factory management and the worker on 15th September to check further documents and mediate a solution.

2016-04-13 Conclusion of the investigation

Based on the documents shown to FWF and the mediation meeting with the supplier and complainant, FWF draws the following conclusions:

- Both parties confirmed their original versions regarding the reason for the resignation. The complainant insisted that he was forced by factory
management to resign, since he was refusing excessive overtime. During the mediation meeting he also claimed that he was beaten by his supervisor, when he refused overtime. He has filed a report with the police. Factory management insisted that the worker resigned on his own wish and that he was not forced to resign or beaten by a supervisor or other management staff. FWF is unable to conclude which version is correct.
- Regarding overtime compensation, management stated that the worker was not eligible for compensation as he worked as a supervisor (not a production worker) and overtime payment was included in his salary. FWF verified that this was included in the contract. The worker was however not aware of this. The production records shown to FWF stated that the worker did work overtime hours within legal limits.

- The factory and the worker both confirmed that he received a loan of Rs. 25 000 in 2014. This amount had been settled with this final payment. The factory did not keep documentation of this loan payment.

- The factory claimed that the worker still owed the factory Rs. 6 000 from a second loan.

- During the mediation process, it was agreed that the worker would not receive additional compensation, but factory management would waive the outstanding loan payment.

- The factory could show documentation that the worker had been with the factory since March 2014. The worker claims that he has been with the factory since 2011. Since no documentation was available for this claim, FWF is unable to conclude the correct date of joining. During the mediation process, it was agreed that the worker would receive social security payments from December 2014 onwards, since the factory introduced this for the entire workforce during that time (after a FWF audit indicated this as a non-compliance with Indian law).

2016-04-13 Remediation

FWF asks MADNESS to facilitate and support remediation concerning the following points:
- The factory should continue its efforts to ensure that all workers receive legally binding employment documents like an appointment letter as well as social security according to Indian law.
- Loans given to workers should be documented and include written consent of the workers regarding the terms of the loan payment in order to minimise the risk of bonded labour.
- Wage structures must be communicated to workers in a transparent way.
- Overtime must always be voluntary and not excessive. FWF requires
MADNESS to continue its root cause analysis on how its production planning influences overtime at the supplier. Since MADNESS is the biggest client at the supplier, its responsibility regarding this issue is high.
- All conflicts with workers should be solved in a non-violent, cooperative manner. FWF already conducted a Workplace Education Programme at the supplier in summer 2015. FWF recommends the supplier to ensure regular meetings of the worker committee and evaluate whether further training for supervisors and other management staff is needed.

2016-04-13 Verification

FWF will verify the points mentioned under remediation at a verification audit in the first half of 2016 as well as during the Brand Performance Check 2016.

2016-04-13 Evaluation of the complaint

The complainant agreed to the compromise concerning payment facilitated by FWF. He has however filed a report with the police regarding the alleged assault by the supervisor. It was agreed that this would be pursued outside the FWF complaint mechanism.

2016-04-13 Resolved

This complaint is resolved.