Odd Molly International AB, Complaint 133

CONCERNING LABOUR STANDARDS
Payment of a living wage Reasonable hours of work Legally binding employment relationship
STATUS
Closed
DATE
2015-08-13

The complainant stated that he, along with four other workers, was dismissed by management on 30th July. No notice was served and no information was given to workers before retrenchment. The management also denied any notice pay or retrenchment compensation on the ground that workers were engaged on a fix term contract that ended on that date.
The worker received full and final payment of Rs 16 500 (by check). This includes his salary for the month of July (Rs 10 010, minimum wage for skilled workers), bonus and probably some payment for non-utilized leave days. Overtime premium had been paid since December 2014, before that it was paid at single rate. According to the complainant, he had been working at the company for about five years as a regular worker, but the practice in the company was to discontinue workers every six months. Sometimes workers were actually being discontinued for a period, and sometimes only on rolls while they continued working. According to him, the ESI and PF enrolment (social security) was also periodically discontinued.

The plaintiff further stated that two things happened before the FWF audit in July 2015:
a) A significant numbers of workers were terminated and a whole production floor was closed;
b) Workers working for longer years in the company were retained; but most of them were discontinued on roll and given new appointment letters showing service experience within the range of six months. The management communicated to all the above
workers retained including the complainant that they all were made permanent. After the audit, the factory terminated between 20 and 25 of those workers without prior notification, denying them notice pay or retrenchment compensation on the ground that
they were engaged on fix term contract.

Findings and conclusions

In August 2015 FWF received a complaint from a worker of a supplier of Odd Molly. The complainant claimed that he was dismissed without receiving any notice pay on the grounds of being a fix-term worker. According to him he had been working at the company for about five years as a regular worker, but the practice in the company was to discontinue workers every six months and re-hire them. A FWF audit conducted in July 2015 confirmed this practice. Odd Molly visited the supplier in September 2015 to discuss the audit and the complaint. The factory provided documents about the complainant, but the personal details did not match. The worker was no longer reachable for further clarification. The factory insisted that their practice was legally compliant. While legislation on fix-term employment was ambivalent in 2015, the government issued a notification on fix-term employment in October 2016. Based on this FWF concludes that the practice of continously extending fix-term contracts to the same worker is not in compliance with the law. As the indiviual complainant was no longer reachable, FWF considers the complaint as closed. FWF recommends Odd Molly and the factory to implement the corrective action plan of the audit and to ensure that all workers are in a legally binding employment relationship. Further guidance on this issue can be found in FWF's FAQ on fix-term employment in Indian legislation.

Overview of the complaint investigation

2016-10-31 Closed

As the complainant was no longer reachable, FWF could not solve his grievance and hence considers the complaint as closed.