Odd Molly International AB, Complaint 204

Payment of a living wage Legally binding employment relationship

The complainant claimed that:
1. The company pays overtime at single hourly rate but compels the workers to sign on a receipt showing the payment at double hourly rate.
2. Whoever protests against this is threatened to be thrown out or actually thrown out. Without any formal process the company instantly communicates a person that he/she is thrown out and asks them to take his/her wages for days worked and leave.
3. No notice pay is given to the workers thrown out.
4. One worker filed a complaint five or six months back in labour department when he was thrown out. According to the worker, in the conciliation that happened at the labour department the company agreed to take back the worker. But when the worker came to join his duty, the management told him that he will have to join fresh in another unit of the company and that he will not be paid any back wages of dispute period. The worker did not agree and went again to the labour department to again file the case. The case is still going on.
5. The company does not provide leave on all festival holidays. Last year one such holiday was cut and this year also one such holiday is cut as per company’s holiday register.

Overview of the complaint investigation

2017-06-18 Investigation

FWF informed Odd Molly about the case which in turn is expected to contact the supplier and ask for a reply.
A FWF audit report from November 2016 was consulted. A complaint from a different worker of the same factory was received on 28th December 2016 which was included in the audit report as it came soon after the audit was done.
A FWF auditor conducted off-site interviews with workers from the factory on 18th June 2017. During the investigation one group interview with five workers and two individual interviews were conducted. The local union of that area was also met.

2017-06-25 Conclusion of the investigation

The 2016 audit report included the following findings relevant to the complaint:
"Although documentation with regard to the overtime payment was compliant (paid premium rate), there were contradictory comments from workers about overtime payments. Whereas some stated that payment is at single hourly rate, some said that it is at premium rate while some denied working overtime."
The complaint received on 28th December 2016 from a different worker also concerned dismissal without proper procedure and payment.
In the investigation carried out in June 2017 the responses were different from group interviews and from individual interviews. In the group interview of five workers only two spoke and they said that overtime happens only occasionally and it is paid at a premium rate. There are functional committees in factories and favoritism does not take place in their factory.
The respondents from individual interviews said that overtime is a regular feature in their factory and is paid at a single rate. They are not aware of any committees. Workers are allowed for one day leave per month but the leave sanction depends on the production pressure. They added that workers are arbitrarily fired from job without notice pay or retrenchment benefits paid.
The local union added that there was a mass retrenchment of workers (50-100) from this factory in the month of April because they were completing five years of service (which would require payment of additional benefits) and none of the workers received notice pay or retrenchment pay. This information could not be corroborated with workers as the union was the last party met during the investigation.

Based on the investigation, FWF concludes the following:
- There is a high likelihood that overtime hours take place and are not reimbursed at the correct double rate.
- There are strong indications that legal procedures are not followed for dismissal/termination.
- No conclusion can be drawn regarding whether legal leave is provided correctly without further investigation.

2017-06-25 Remediation

FWF recommends the following remediation points:
- All overtime hours must be within legal limits and paid at double rate.
- The factory should define and implement a policy for terminations and dismissals that follows legal procedures.
- Paid leave must be granted in line with legal requirements.
- The factory should establish functional grievance channels for workers.

2018-02-08 Verification

A verification audit was conducted in this factory on 7th and 8th February 2018. The audit findings that relate to the complaint are as under:
- Workers are unaware of management policies. There was no induction training provided so new workers had no awareness about probation period, termination policy or employment terms and conditions.
- No training on workplace harassment was conducted.
- Workers during offsite and on site interviews stated that the management periodically dismisses some workers every 6-7 months. These workers are given their due wages but benefits like notice pay or retrenchment payment is not made to them.
- Records of full and final payment to workers were shown but it did not contain any date on the resignation letter or date of payment. It was thus not possible to verify the time the factory took to make final settlements.
- Factory does not pay overtime premium at legal rate. Currently workers receive a little more than single hourly rate for overtime hours (wages for 2.5 hours for 2 hours work)
- Actual time attendance and wages could not be verified because of inconsistencies observed in broken needle register and time record.
- Appointment letter was not given to all workers. Of the six workers randomly selected during the audit only two could show their appointment letter.

2018-02-08 Closed

Follow up will be given to the open findings through the regular follow up on the audit. The complaint is closed.