Odd Molly International AB, Complaint 209

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
Closed
DATE
2017-02-23

The complainant raised the following claims:
1. Sometimes the supervisors announced that there were not enough pieces and cutting to do, so they asked some stitching workers not to go to work for 1-3 days. This decreased the earnings of the workers.
2. There was favouritism by the supervisors in giving more work to their favourite workers. They discontinued only those workers whom they personally did not like.
3. There was overtime on weekly offs. Again, only workers who were favoured by supervisors were called for those additional hours.
4. Many workers openly expressed their discontent about the above and demanded that, in case of limited work, this applied to all workers and not only to a few. They protested that this practice affected the earnings of the workers without any fault on their side.
5. After this incident, management started using other strategies to justify discontinuing workers for some days. For example, workers would be told that their work was unsatisfactory.
6. One of the supervisors used abusive language and threatened workers regularly.
7. Absent days were deducted from salaries even when workers did not take leave or formally applied for earned leave days.
8. Internal grievance channels did not function.

Findings and conclusions

On 23 February 2017, FWF's complaints handler in India received a complaint from a factory worker who raised the following issues:
Favouritism from supervisors towards some workers; unfair discontinuation of workers; overtime work on weekly days off; use of abusive language and threats by one supervisor; reduction of absent days from salaries when workers did not take leave; and non-functioning internal grievance channels. FWF declared this complaint admissible and informed Odd Molly, the FWF member sourcing at this factory. On 18 June 2017, FWF conducted offsite interviews with workers and with the local union. Based on the investigation, FWF concluded that: overtime hours were with high probability not paid at double rate; legal procedures were not followed for dismissals; workers were unaware of grievance channels.
FWF recommended the following remediation points: overtime must be within the law and paid at double rate; the factory must implement policies on termination of employment, as well as functioning grievance channels; paid leave must be granted as per law.
A verification audit was conducted on 7 and 8 February 2018 and a Corrective Action Plan (CAP) was drafted.
In October 2018, the brand and FWF country representative visited the factory to check on the progress made with the CAP. Factory management stated hat all workers were now being issued an appointment letter. Overtime hours were within the limits and were paid at double rate. Turnover of workers still remained an issue but all workers were now granted leave with their entitlements.
This complaint is closed. A thorough check on the remediation steps taken by the factory will be done during the verification audit at the end of 2019.

Overview of the complaint investigation

2017-06-18 Investigation

On 23 February 2017, FWF informed Odd Molly about the case and asked them to obtain a statement from the supplier. A FWF audit report from November 2016 was consulted. A complaint from a different worker of the same factory was received in January 2017, which also concerned overtime payments.
A FWF auditor conducted off-site interviews with workers from the factory on 18 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 regards to overtime payment was compliant (paid premium rate), there were contradictory comments from workers about overtime payments. Some stated that payment was at single hourly rate, some said that it was at premium rate and others denied working overtime.
The complaint received on 28 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 happened only occasionally and it was paid at a premium rate. There were functional committees in factories and favouritism did not take place.
The respondents from individual interviews said that overtime was a regular feature in the factory and was paid at a single rate. They were not aware of any committees. Workers were allowed for one day leave per month but the leave sanction depended on the production pressure. They added that workers were arbitrarily fired without notice pay or retrenchment benefits paid. These respondents could not confirm the issue of favouritism as they had not faced it. However, they did not completely refute it either.
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 concluded the following:
- There was a strong likelihood that overtime hours took place and were not reimbursed at double rate.
- There were strong indications that legal procedures were not followed for dismissal/termination.
- Workers were not aware of grievance channels.
- No conclusion could be drawn regarding the alleged favouritism, the abusive behaviour and leave days.

2017-06-30 Remediation

FWF recommended 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.

2018-02-19 Verification

A verification audit was conducted in this factory on 7 and 8 February 2018. The audit findings that related to the complaint were as follows:
- Workers were 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.
- Workers during off-site and on-site interviews stated that management dismissed workers every 6-7 months. These workers were given their due wages but benefits like notice pay or retrenchment payment were not paid to them.
- Factory did not pay overtime premium at legal rate. Workers received a little more than the single hourly rate for overtime hours (e.g., wages for 2.5 hours for 2 hours work)
- Actual attendance and wages could not be verified due to 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.

2018-10-30 Evaluation of the complaint

The brand along with the country representative of FWF made a visit to the factory to check the progress on the Corrective Action Plan (CAP). The Director, HR manager and compliance manager were present in this meeting and they responded that all workers were now being issued an appointment letter. Overtime hours were within the limits and were paid at double rate. Turnover of workers still remained an issue but all workers were now granted leave with their entitlements.

2018-10-30 Closed

This complaint is closed. A thorough check on the remediation steps taken by the factory will be done during the verification audit at the end of 2019.