Nudie Jeans Co., Complaint 129

CONCERNING LABOUR STANDARDS
Payment of a living wage Reasonable hours of work Safe and healthy working conditions
STATUS
Resolved
DATE
2015-06-10

The complainant claimed that the factory has not paid last month’s salary to several workers, some of whom left the factory because of this. According to the complainant, those workers were threatened by management not to complain to anyone. The worker also stated that there was verbal abuse, forced overtime and that during the FWF audit, the factory hid the fact that it operates hostels for its workers.

Findings and conclusions

In June 2015, six weeks after an audit, FWF received a complaint through its local complaints handler in India from a worker from a factory supplying Nudie Jeans. The complainant claimed that the factory has not paid last month’s salary to several workers, some of whom left the factory because of this. According to the complainant, those workers were threatened by management not to complain to anyone. The worker also stated that there was verbal abuse, forced overtime and that during the FWF audit, the factory hid the fact that it operates hostels for its workers.

During the investigation, the supplier admitted that there had been some cases of late payments in the past months due to outstanding payments of a non-FWF member. It did not, initially, respond to the other allegations. The investigation showed that there were grounds for most of the allegations, though most of them could not be proven definitively. A remediation plan was drafted, which included a root cause analysis of overtime by the factory and Nudie Jeans together, as well as implementing a process for increasing wages.

In January 2016, FWF verified that all complainants had received due payment. Further remediation will be verified at the next FWF audit at the factory, and during the next Brand Performance Check at Nudie Jeans.

Overview of the complaint investigation

2016-06-01 Investigation

Nudie Jeans immediately informed the supplier about the complaint and asked for feedback. The supplier admitted that there had been some cases of late payments in the past months due to outstanding payments of a non-FWF member. However, according to factory management, no payments were outstanding at the moment.
Fair Wear Foundation visited the factory to discuss the complaint, evaluated an FWF audit conducted on 23rd and 24th April 2014 and talked to further workers from the same supplier acquainted to the initial plaintiff. FWF was unable to interview other workers from the factory.

2016-06-01 Conclusion of the investigation

During the investigation, FWF found the following information and came to the following conclusions:

- Excessive and involuntary overtime: The initial plaintiff as well as several other workers insisted that forced daily overtime of 1-3 hours as well as Sunday overtime were common. Overtime hours were not always paid or payments were delayed. The factory denied this. The FWF audit of April did not show excessive or involuntary overtime hours. However, one worker mentioned he had been coached during the audit. Another worker claimed attendance records had been forged.

- Harassment: All workers interviewed mentioned verbal abuse by supervisors. One worker mentioned physical abuse by factory management when he asked to resign (slapping). During the investigation, factory management stated that they were aware of one supervisor being verbally abusive. According to factory management, the person is undergoing training. Factory management denied that there had been physical abuse. Based on the statements of all plaintiffs,
FWF concludes that verbal abuse is an issue in the factory that needs to be addressed. FWF is unable to verify whether physical abuse did occur.
Factory management also asked FWF not to call any more workers to avoid unrest in the factory. The plaintiff claims that he was also asked not to complain any more. According to him, factory management forced the workers to sign a statement saying that a meeting between factory management and workers was held, where issues raised in the complaint were discussed. This meeting did not take place according to the plaintiff. FWF is unable to confirm, which statement is correct.

- Non-acceptance of resignations: All workers interviewed mentioned that they tried to resign at some point, but were refused by management and told to wait. If they did resign, settlement payments were refused or delayed. Factory management denies this. As this grievance was reported by all workers, FWF concludes that it is likely that management is reluctant to accept worker resignations.

- Delayed payments: All workers interviewed claimed that their wages and overtime payments were delayed, sometimes up to three months. During the investigation, it became clear that management has the policy of delaying monthly wages until the 25th if workers go on unannounced leave. This was also the case for the plaintiff. He received his wages at the end of the month, but has not yet received his social security payment (PF) by end of July. Other workers also reported outstanding payments.
FWF checked the Standing Order of the factory, which included the policy of delaying wages for one month if worker go on unannounced leaves. FWF concludes that it is legal for the factory to withhold wages for one month is case of unannounced leave. Withholding payments for longer than that and after resignation is illegal.

- Undisclosed hostel workers: Factory management denies that they operate hostels, but mentioned that they support migrant workers with advance payments for rent. No documentation about this was available. FWF interviewed other complainants of the same factory regarding the hostel. They claimed that the factory had arranged several smaller flats for workers in need of a place to stay. The rent for this is deducted from their salary.

2016-06-01 Remediation

The following issues need to be remediated by the factory and Nudie Jeans in the future:

- Overtime hours have to be within legal limits and voluntarily. If overtime occurs, workers must be paid 200% of regular wages (according to Indian law) with their monthly wages. Nudie Jeans should conduct a root cause analysis of overtime hours and check whether it could change its production planning to support the factory in remediation. As factory management claimed that workers demand overtime hours in order to raise their income, FWF recommends both Nudie Jeans and the factory to work on raising wage levels at the factory.

- The factory must make sure that supervisors or any other employees of the factory do not verbally or physically abuse workers. Disagreements with workers should be solved by other means.

- If a worker wishes to resign, the factory may discuss the reason for resignation with the workers and look for a possible solution. If the worker still wishes to resign and follows the resignation policy, factory management must accept the resignation, pay a final payment according to law and sign all relevant forms regarding social security collection within a reasonable time. If the resignation was initiated by the worker, (s)he is required by law to work one more month.
FWF suggests that the factory develops a resignation and leave policy in dialogue with workers. Nudie Jeans could support this process.

- Factory management must not delay wages or overtime payments for more than one month. Factory management could discuss with workers whether there are other options to avoid unannounced leaves rather than delaying payments for one month. If the factory wishes to continue with the policy, it must be clearly communicated to the workers. This also applies to resignation policies.

- Generally, it is positive that the factory supports migrant workers with loans for their rent advance payment. However, factory management must ensure to keep a written policy about this and communicate it to the workers. Also, consent letters of the workers that received loans must be maintained. Otherwise, there is a risk of the loans leading to a form of bonded labour.

- As many of the grievances raised by workers are partly linked to a lack of social dialogue, FWF recommends that the factory participates in a WEP training. This training is offered by FWF free of charge to stimulate awareness of worker’s rights and enhance dialogue between factory management and workers.

2016-06-01 Verification

FWF verified in January 2016 that all complainants received their due payments.
The remediation steps outlined in this document will be verified at the next FWF audit at the factory and during the next Brand Performance Check at Nudie Jeans.

2016-06-01 Evaluation of the complaint

The complainants were content that they received their payments and thanked FWF for its support.

2016-06-01 Resolved

This complaint is resolved.