Mini Rodini AB, Nudie Jeans Co., Complaint 147

CONCERNING LABOUR STANDARDS
Safe and healthy working conditions Legally binding employment relationship
STATUS
Resolved
DATE
2016-01-08

In August 2013, two workers were asked by an engineer at the factory to repair a pipe. To reach the pipe, they climbed on a chair that collapsed. One of the workers fractured a hand. The other worker, the complainant, fractured his spine. After the accident, management paid medical expenses for both workers. The workers were allegedly asked to sign documents in Tamil, a language the complainant does not speak, and to not report the complaint with the police. In December 2013, FWF became aware of the accident, but no case for non-compliance.

In January 2016 one of the workers called the FWF line to explain that his condition had worsened and was unable to work more than 12 days a month in a different area of the factory. He could not show medical documents because they are allegedly in the hands of management. The worker himself only has an appointment letter and an identification card. Due to his health problems, the worker wants to resign and has asked management for compensation payment, which was denied.

Findings and conclusions

In August 2013, two workers were asked by an engineer at the factory to repair a pipe. To reach the pipe, they climbed on a chair that collapsed. One of the workers fractured a hand. The other worker, the complainant, fractured his spine. After the accident, management paid medical expenses for both workers. The workers were allegedly asked to sign documents in Tamil, a language the complainant does not speak, and to not report the complaint with the police. In December 2013, FWF became aware of the accident, but no case for non-compliance.

In January 2016 one of the workers called the FWF line to explain that his condition had worsened and was unable to work more than 12 days a month in a different area of the factory. He could not show medical documents because they are allegedly in the hands of management. The worker himself only has an appointment letter and an identification card. Due to his health problems, the worker wants to resign and has asked management for compensation payment, which was denied.

FWF first involved Nudie Jeans, and later the other brands. After contact with the factory it was established that all medical bills had been paid so far, and the worker continued in employment during his treatment. The worker fell under the Indian Employee’s Compensation Act. This meant that the worker was entitled to compensation regardless of the insurance situation of the worker. Also, the factory should have informed the police about the accident.

The worker received outstanding compensation. From now on, the factory must ensure that workers in similar cases are compensated according to law, and notify the authorities wherever necessary. Also, workers must receive a copy of legal documents in a language they can understand.

Overview of the complaint investigation

2016-04-01 Investigation

FWF informed Nudie Jeans about the complaint on 14th January 2016. The other FWF member brands where informed later on, when FWF clarified whether they were currently sourcing from the factory. Nudie Jeans remained the main contact point with FWF and the factory during the complaint handling process.
Through the contact with Nudie Jeans, FWF established that the factory mainly confirmed the worker’s version of events concerning the accident.
The factory had paid all medical bills so far and continued to employ the worker while his treatment was ongoing. 25% of his salary from August 2013 to August 2014 was paid as compensation As the area, where the factory is registered was not covered under the ESI scheme, the factory had taken up an insurance policy for workers, which also covered work accidents.
A hospital certificate from August 2015 confirmed that the worker was permanently disabled at a rate of 8%. The hospital also confirmed that he was fit to resume work from August 2015 onwards, but should avoid heavy manual work for another six months. The factory had applied for compensation payment at the insurance company in November 2015. Beyond the medical bills and the 25% of salary for a year, no compensation had been paid to the worker yet by factory management as the factory wanted to wait until the treatment had been finalised. Factory management was unaware that the worker wanted to leave the factory. FWF then found out that the worker did not approach factory management about his wish to resign and collect the due compensation, but only his contractor, who was unwilling to follow up. The complainant did not explain why he did not approach factory management directly. FWF could not determine whether the worker was asked not to register a complaint with the police at the time of the accident in 2013 in exchange for payment of medical bills by the factory.
By consulting a legal expert as well as an experienced FWF document inspector, FWF established on March 7th 2016 that the factory, since the area was not covered under ESI, would fall under the Indian Employee’s Compensation Act.
This Act specifies that injured workers must receive a half-monthly payment as soon as it falls due, which means right after or shortly after the accident. Once the degree of disablement has been determined (which has been done with the disablement certificate in August 2015), the worker needs to receive a lump-sum payment (from which the halfmonthly payments will be deducted). The Act provides for payment of interest on the compensation amount as well as a penal hike of fifty percent if there is no justification for
the delay, if it is not paid within one month from the date it falls due.
This compensation must be paid directly by factory management to the worker. Factory management may claim that amount from the insurance company later on, but according to the Act the worker must not wait until the insurance releases the payment. FWF calculated the compensation amount, including an interest rate according to the Act as the worker only received 25% of his salary instead of the legally required 50% and the payment of the lump-sum compensation was delayed. Deducting past payments that were already received, the worker was still entitled to a compensation of Rs. 68 423.
In addition, FWF concluded that the Act includes the responsibility of factory management to inform the Commissioner or another government authority about the accident. Factory management had informed local police authorities.

2016-04-01 Remediation

- The complainant must receive the outstanding compensation amount of Rs. 68 423 without further delay.
- The factory must ensure that workers in similar cases are compensated
according to the Employee’s Compensation Act.
- The Commissioner should be informed about work accidents at the site in the future.
- Workers must receive copies of legally binding documents and agreements, in a language that they are able to understand.
- Workers should always be free to register complaints with the police or other parties, regardless of whether the factory compensates medical treatment or other payments.

2016-04-01 Verification

FWF verified that factory management released the outstanding compensation amount on March 21th 2016.
The remaining remediation points will be verified in future FWF audits.

2016-04-01 Evaluation of the complaint

The complainant confirmed that he received the compensation amount and thanked FWF for its support in the matter.

2016-04-01 Resolved

This complaint is resolved.