MADNESS THE NATURE TEXTILE COMPANY GmbH, Complaint 184

CONCERNING LABOUR STANDARDS
There is no discrimination in employment Payment of a living wage Reasonable hours of work Safe and healthy working conditions Legally binding employment relationship
STATUS
Resolved
DATE
2016-09-16

Complainant A claimed that, together with her colleague (complainant B) and a male helper, she was asked by a supervisor on 7 September at 11:00 to go to a factory storage unit, which was a few blocks away from the factory in a basement. They worked until 13:00 and took a lunch break until 14:00. During this time, the male worker was called back to the factory and was asked to close the basement. The complainant and her colleague were slightly concerned, but continued to work. After lunch, one of the managers approached complainant B and tried to tweak her cheeks, touch her arms and motioned her to sit with him and see something on his phone. When she refused, he got angry and asked her to leave the premises, which she did. Meanwhile, complainant A remained in the basement. The second manager held her from the back and tried to molest her. At that time, complainant B returned because she was worried about her colleague. Together they managed to free themselves and run away from the storage unit. After this incident, they called their respective husbands who advised them to complain to the owner. Both of them went to a supervisor and narrated the whole incident. He asked them not to raise this issue with anyone as they may lose their job. The two workers then approached the HR person, who also told them the same, threatening them that if they would go to the owner or the police, they would never be allowed to work again. They could not meet the owner since he was not present at the factory. They stayed in the factory until 18:00 and continued to work in the thread cutting department, as there was a bus provided by the factory at that time. Also, they were hoping for a chance to talk to the owner and did not want to get dismissed because they left work early. At the end of the day, they were given their payment for the last 7 days of work and asked to leave the work permanently. No notice pay or retrenchment pay was given. They returned home and shared the incidents with their husbands and decided to complain to FWF. Both workers stated that the two managers had sexual relationships with several female workers of the factory in exchange for favours (like paid leave or casual leave) and tried to initiate such a relationship with them as well at that day. Beyond the sexual harassment complaint, the workers shared several other alleged issues:
a) There is extensive overtime for all workers, including women workers. They work from 9:00 to 21:00/21:30 on a regular basis. Workers have to sign sheets which do not show all the working hours. The HR person explained that the company is not allowed to work excessive overtime and therefore cannot show actual hours. Also, if they work 100 hours in a month, they would be paid only for 85-90 hours.
b) For both workers, Provident Fund (social security) was deducted, but they doubted whether their PF amount was actually deposited.
c) Employees' State Insurance (ESI) was deducted for both, but only one of the workers had a ESI card.
d) Both workers never received paid leave or casual leave. Money would be deducted from their salaries when they were absent from work.
e) None of the workers were paid bonuses.

Findings and conclusions

On 16 September 2016, FWF's complaints handler in India received a complaint by two women who claimed that they had been sexually harassed by managers of the factory. When they tried to raise their grievance internally, their contract was illegally terminated. FWF declared this complaint admissible and informed Madness, the FWF member sourcing at this factory. FWF conducted an extensive investigation, but was unable to ascertain whether harassment had taken place, despite several indications. FWF did conclude that the workers were still owed payments after their dismissal. FWF recommended Madness and the factory to pay the outstanding amount as soon as possible. In addition, FWF recommended that the factory engaged with FWF's partner MARG or another credible initiative to establish a functioning Internal Complaints Committee (ICC, required by Indian law) and conduct an investigation of the complaint. This would include an investigation on whether other women had been subject to sexual harassment. FWF verified in October 2016 that the payments had been made. A verification audit in November 2017 showed that the factory had tried to establish an ICC, but it was not compliant with Indian legislation and not functioning. No investigation on whether other women had been subject to sexual harassment had been conducted. The audit also confirmed the other points raised by the complainants, such as excessive overtime. Madness and the factory were asked to remedy the points raised in this complaint and in the corrective action plan of the last audit. This included, in particular, the set up of a functioning mechanism to prevent and address sexual harassment.
Based on the recommendation of FWF, brand and factory commissioned an independent investigation in Sept-Oct 2018. The investigation aimed to assess the working conditions of women and whether they were subject to sexual harassment (including being pushed to trade sexual actions for favours). The result of the investigation showed no evidence of sexual harassment in the factory and that women workers gained more confidence on dealing with sexual harassment issues thanks to the training they received by FWF through the local partner MARG. The training focused on raising awareness and strengthening preventive organisational structures against sexual harassment. The factory set up an Internal Complaints Committee (ICC), which is mandated by law, to deal with sexual harassment cases. The committee was trained during the gender training as well. Furthermore, workers receive monthly awareness training by their consultant for implementing better working conditions and by the chairperson of the ICC. Considering that the brand and the factory acted fully on the recommendation, this complaint is considered resolved.

Overview of the complaint investigation

2016-09-20 Investigation

FWF met both complainants on 18 September. They repeated their story, shared more details and copies of their appointment letter.
FWF informed Madness about the case on 19 September. After a first, brief response from their supplier, FWF decided to send an investigation team to the factory on 20 September. During the investigation, FWF interviewed the factory manager, the HR manager as well as the supervisor and the two men mentioned by the complainants. It was not possible to interview the male worker, who accompanied the women to the storage unit, as he had returned to his village and left the factory. A document review was conducted as well. Several phone calls with the two women were done to cross-check information.
In addition, FWF received guidance from their local partner, MARG, who are specialised in sexual harassment from a legal perspective.

2016-09-28 Conclusion of the investigation

Based on the investigation, FWF was able to clarify several points. At the same time, contradicting information remained.

Findings supported by several sources:
a) All interviewed persons including the two women were in agreement that the two complainants as well as the two men went to work in the storage unit on 6 September (whereas in earlier accounts the women had said 7 September).
b) One of the men confirmed that he showed complainant B his phone, but claimed that it was only to show that there was no network coverage. He also said that it is possible that he might have touched her accidentally while he explained the work procedure.
c) It was confirmed by management and during the document check, that the women had not yet received their full and final payment.

Findings that were contradictory or unconfirmed
a) The factory owner stated that he had asked the HR and supervisors to dismiss a number of workers due to low production, among them the two complainants. He felt that they were claiming that they had been sexually harassed to harm the company. The HR manager stated that complainant B requested her full and final payment on 12 September, said that she wanted to leave and would return later to resign. He confirmed that no resignation letter was received from her side. About complainant A, the HR manager stated that she worked until 16 September and was requested by HR to take a break from work until production orders came in. But complainant A chose to resign instead and requested for her full and final payment. The supervisor confirmed this statement.
c) It is unclear when the two women worked last at the factory. Initially, both claimed that they were dismissed on the evening of the day the incident occurred. In later interviews, complainant B said that she worked on 7 September as well and was then dismissed. Her husband accompanied her on 7 September to discuss the case with management, but was refused at the gate. The factory manager, the supervisor and one of the men confirmed 7 September; the second man said she left on 9 September; the HR stated she left on 12 September, but was absent for 4-5 days prior to that. Documents show her last shift ended on 7 September at 11:57.
Complainant A claimed that she worked until 16 September, but took a break on 8 September. According to her, she was repeatedly told that the factory manager was not available/she was not allowed to see him. The HR manager as well as the document check confirmed that her last day was 16 September. The factory manager, the supervisor as well as the two men stated that she left on 14 September.
d) There were conflicting messages about the date of joining. The HR manager claimed both women joined in May 2016. The supervisor said complainant B joined October 2015, complainant A earlier. Complainant B could show an appointment letter dated December 2015, which matched the documents available in the factory.
For complainant A, there were many discrepancies in her documents and her statements:
i) According to her she first joined the factory in October 2014. No Provident Fund (PF) was being deducted at that time and she was paid in cash.
ii) She received an appointment letter for the month of December 2014, PF deductions also started taking place then.
iii) She worked for 9 months, until August/September, 2014 and was asked to take a break due to insufficient work. She received her full and final payment during that time and also withdrew the entire PF savings due to her child's health expenses. In this scenario, her appointment letter of December 2014 becomes null.
iv) She joined again on 7 January 2016, but according to her the PF deductions started after 3 months, that is April 2016 and has PF deductions of 6 months. This is not in compliance with the document shown to the investigation team in the factory which showed that she joined in May 2016. According to the complainant A, she had not signed this new appointment letter. She did not have any wage slip for proof.
e) It is unclear whether the factory had a functioning Internal Complaint Committee (ICC). Management claimed that is was set up, but on the day of the investigation, all members were absent. The ICC was not approached by the two women. Management was not aware whether the committee included an external representative (as required by law).
f) It was unclear who was aware of the alleged incident. The supervisor claimed that he had not heard about it until the FWF investigation. However, one of the accused men stated that the supervisor asked him 4-5 days after 7 September whether he was aware of any problems in the storage unit. The same man also confirmed that complainant B brought a male person to the factory one or two days after 7 September to ask why she had been dismissed. The sexual harassment was mentioned then, but only concerning the other accused men, not him. Complainant A claimed that the man who gave this statement called her and asked her not to involve his name, but only the other person.
The other accused man stated that he was called by a young male person a few days before asking why he harassed complainant B. He also confirmed that a man came to the factory to inquire the same thing. He insisted that he did not harass complainant B.
The HR manager and the factory manager stated that they were not aware of the incident until FWF informed them about the complaint.
g) Complainant A claimed that complainant B was now facing domestic abuse from her husband, because of her involvement in a sexual harassment case. The investigation team observed that both women came from a conservative background, where it is common that a woman’s reputation is harmed if she becomes a victim of sexual harassment/violence.
The audit team observed that the body language of both women during phone and personal interviews seemed consistent with their stories. At the same time, the other interviewed persons seemed to withhold information.
Complainant A claimed that she was approached by a friend of one of the accused men offering her 20,000 to 30,000 INR to withdraw the complaint.

Not yet investigated (due to time constraint):
- Overtime hours at the factory
- Leave days granted to the complainants
- Whether other women were also affected by sexual harassment.

Based on the information investigated so far, FWF concluded:
A) Both women need to receive their full and final payment. This must apply independently from the sexual harassment complaint. Complainant B (monthly wage: INR 7,110) is eligible for 1 month notice pay, bonus (INR 2,625), leave pay and salary for days worked (last day: 7 September). Complainant A is eligible for bonus, leave pay and days worked (last day: 16 September). Due to the discrepancy in documentation, it is difficult to conclude whether she would be eligible for notice pay.
B) There were indications that sexual harassment occurred on 6 September by the two accused men. Due to the lack of witnesses, a confession or other proof, it is however not possible to reach a 100% certain conclusion.

2016-09-28 Remediation

Based on the conclusions, FWF recommends the following remediation steps:
A) The factory should calculate the full and final payment amount based on the conclusions of this report and pay it to the two complainants as soon as possible. While it is not entirely clear whether complainant A is eligible for notice pay, FWF recommends including this in the final payment as she has worked at the factory in previous years and did not receive sufficient notification that she would be dismissed. FWF will accompany the complainants to the factory to collect the final payment as requested by them.
B) FWF’s local partner MARG or another credible organisation should become the external representative on the Internal Complaint Committee (as required by law). Together with the committee members, they should conduct a formal investigation (including an assessment about whether other women had been affected). This way, the legal procedure would be followed, allowing the complainants to pursue this case in court, if they chose to do so. In addition, it will help the factory to develop functioning structures to prevent and investigate sexual harassment in the future.
C) MARG would send a trained professional to the two complainants to assess whether they require further assistance/counselling. The factory might be required to contribute to this assistance.
D) An investigation on whether unrecorded overtime occurred would require more effort. FWF decided to include this in the next audit at the factory. In the meantime, Madness should continue its efforts to reduce overtime at the factory and request the factory to be transparent regarding overtime hours. All overtime hours must be paid at double rate.
E) Madness and the factory should find a solution to ensure that production is more continuous throughout the year. Should workers not be needed throughout the year, they should receive sufficient notice as well as social security, appointment letters and bonus payments.
F) All workers must receive paid leave according to Indian legislation.

2016-10-18 Verification

On 13 October 2016, FWF received an update by Madness confirming that both complainants had received their final payment. FWF's auditor reviewed the payment and assessed that it was legally compliant. FWF's complaint handler asked complainant A whether both complainants had received the amount stated in the document. FWF could not talk to complainant B directly.
FWF would verify the remediation actions taken on the other points during the next audit at the factory and during Madness’ Brand Performance Check.

2017-11-14 Verification

Since the complaint, FWF received updates from Madness about the remediation process. The factory had refused to collaborate with FWF's partner MARG and stated that they would find a different partner. On 13 and 14 November 2017, FWF conducted a verification audit. Based on the information collected, FWF concluded the following:

A) An Internal Complaint Committee (ICC) was established, however the member constitution was found non-compliant with Indian legislation. An external consultant was appointed as Chair Person, whereas the law states that a senior female employee of the factory must be the Chair Person. An external member must also be included in the committee. While the external consultant could take this role, it must be noted that there could be a conflict of interest, as the consultant was engaged by management also for other tasks and could not be considered as an independent party.
According to the records, the committee met twice, but without the presence of the consultant.
According to Madness, training was conducted to inform workers about sexual harassment and the committee. However, interviewed workers were not aware of the committee's function.
No formal investigation was conducted by the ICC into the complaint of the two complainants or the allegation that other women may be subject to sexual harassment.
B) No follow-up support was provided to the women to assess whether they needed counselling/additional support.
C) Excessive working hours were happening. Overtime records were not kept or shown to the audit team. As a result, overtime payments could not be assessed.
D) Some progress was made to establish legally binding employment relationships. Appointment letters were provided to some workers. However, no records of piece-rate workers were kept. No recruitment and dismissal policy was in place yet and the process still unclear to workers.
E) FWF was unable to verify whether all workers received paid leave according to Indian legislation.

2017-11-14 Remediation

Madness and the factory must work on remediating the points raised in this complaint as well as the corrective action plan of the recent audit. This applies especially to establishing functioning mechanisms to prevent and address sexual harassment.
The factory should employ an independent and qualified organisation to investigate whether any workers in the factory are subjected to sexual harassment, which includes trading sexual actions for favours (such as paid leave).
FWF did not recommend investigating the complaint raised by the two complainants further in order to avoid them additional distress or problems in their private life (complainant A had stated that complainant B had been subjected to domestic violence for being involved in this complaint). Both complainant did not want to pursue legal options.

2017-11-14 Evaluation of the complaint

FWF's complaint handler asked complainant A whether both complainants had received their final payment. FWF could not talk to complainant B directly. Complainant A confirmed that the payment was received.
As the the remaining remediation points concern structural points beyond the individual complaint, the factory would need some time to work on it.

2018-10-18 Resolved

Based on the recommendation of FWF, brand and factory commissioned an independent investigation in Sept-Oct 2018. The aim of the investigation was to assess the conditions of women workers on whether they were subject to sexual harassment (including being pushed to trade sexual actions for favours). The result of the investigation showed no evidence of sexual harassment in the factory and that women workers had gained more confidence in dealing with sexual harassment issues thanks to the training they received. This factory received training on gender by FWF through their local partner MARG to raise awareness and strengthen preventive organisational structures against sexual harassment. The factory set up an Internal Complaints Committee (ICC) which is mandated by the law to deal with sexual harassment cases. The committee was also trained during the gender training. Furthermore, workers receive monthly awareness training by their consultant for implementing better working conditions and by the chairperson of ICC.
Considering that the brand and the factory acted fully on the recommendation, this complaint is considered resolved.