Odd Molly International AB, Complaint 314

CONCERNING LABOUR STANDARDS
Payment of a living wage Reasonable hours of work Legally binding employment relationship
STATUS
Closed
DATE
2017-12-23

The complainant raised three issues at the factory:
1. Wages are not paid on time, workers often have to wait until after the 15th of the month to receive their wages. According to the complainant, the wages for the month of November have not been paid yet (23 December). The complainant added that this delay in payment started only this year, no problems were observed in previous years. This issue has the highest priority for the complainant since many workers, including him/her are struggling to meet their living expenses.
2. No bonus is paid to workers.
3. The factory runs for 12 hours. Production workers are paid for overtime, but only at single rate. Other groups of workers such as electrician, security guard and gardener are, however, not paid for overtime hours, when they work 12 hour shifts.

Overview of the complaint investigation

2018-01-11 Investigation

The brand was informed about the complaint, who in turn contacted the factory about the queries. The reply from factory on each point was reviewed by FWF. Afterwards, FWF called the complainant again to cross-check management's statements.

2018-03-04 Conclusion of the investigation

With regard to the delayed payment of salary to workers, the factory claims to have hired a senior person recently to oversee timely payment to workers. The factory assures that there will not be any more instance of delayed monthly payment.
The complainant could not confirm this. He/she stated that he/she only received February's salary on 12 February.

The factory found some clerical errors in the bonus calculations sheets due to which the workers refused to take the payment of their bonus. The factory claims to have almost solved the issue however only around 12% to 15% of the workforce are covered under bonus, so they would anyway be out of this purview.
The complainant stated that no bonus was yet paid to any worker including the complainant. There was no discussion with workers about clerical mistake in bonus calculation.

Factory claims that overtime work does not occur very often, but for the times that it is required, they are in in the process of obtaining permission for running the factory in three shifts of eight hours.
The complainant stated that workers still work for 12 hours a day and overtime is paid at single rate. The complainant added that the company had promised workers a long time back (2-3 years ago) that those who do three hours of overtime daily will get three months extra payment after the year end, but the year end is not specified. Workers who have been doing regular overtime have not received extra payment since two years. The complainant is not aware of the factory seeking permission to run factory for three shifts.

2018-03-21 Investigation

A call was made to the complainant to cross check the explanation of management and to check the timeliness of wage payment.
Since the statements of factory management and complainant differ, FWF is planning an investigation visit.

2018-04-08 Investigation

FWF tried to reach the complainant through phone but there was no response. The brand/factory did not get back on having an investigation visit from FWF which was planned for end of March.

2018-06-21 Investigation

FWF called the complainant to check on the timeliness with regard to their monthly payment which was one of the main concerns in the complaint.
According to the complainant:
- This month they received salary on 21st May
- Last month on 30th April
- Last to last month on around 28th March

Other information from the complainant are:
- Company does not have enough orders and so more than 50 workers have been terminated
-Bonus was not paid to workers

2018-06-21 Conclusion of the investigation

Based on the investigation calls made to the complainant FWF concludes that the factory management has not implemented the actions mentioned in their response dated 4th March 2018.

2018-06-21 Remediation

Based on the information received so far, FWF recommends the following remediation points:
1) Wages must be paid latest by the 7th day of the month.
2) All eligible workers must receive their bonus payment. Management should communicate clearly to workers under what conditions they are eligible for bonus. The criteria must be in line with legislation.
3) Overtime hours should be within legal limits and paid at premium rate (200%).
4) In case of termination of workers, legal procedures must be followed.

2018-12-18 Verification

Brand made a visit to the factory beginning November 2018 and had a discussion with the factory management about issues that were raise in this complaint. According to the brand the management was keen on resolving all structural issues but your need some time to make a complete improvement. Response from factory during brand visit on remediation points suggested by Fair Wear are as under:
1) Wages must be paid latest by the 7th day of the month.
Factory manager explain that they pay workers both in cash and bank transfer. Delay in salary in spring 2018 was due to the demonetization that caused lack of cash and confirms that it has not been an issue lately, payment is done on 7th of month. Many workers in the region does not have bank-accounts, but the brand discussed the possibility for the factory to simply open accounts for them, which is done by many other factories. Factory will consider doing this.

2) All eligible workers must receive their bonus payment. Management should communicate clearly to workers under what conditions they are eligible for bonus. The criteria must be in line with legislation
Factory claims to have improved the maintenance of records but ask for 3 months time to complete all documents. Brand explained the importance of clear information to workers. It is though unclear if bonus really have been paid according to legal requirements.

3) Overtime hours should be within legal limits and paid at premium rate (200%).
Brand explained the importance of transparency and management confirmed that all documents will be available for the audit team next time. They claim though that the practice in the region is to pay single rate and that is what they can do for the moment. Brand plans to have further discussions. Since their leverage is small, they see this as long-term and step by step improvement.
Management denied any kind of promise made to workers about working tow extra hours daily and receiving two additional months of salary. They claim that such a promise would be ridiculous to give, since it would encourage the workers not to do their job during normal working hours and rather aim for overtime, which make sense…
4) In case of termination of workers, legal procedures must be followed.
Factory claims to have no information / evidence that the legal procedures not have been followed

2018-12-18 Remediation

Brand made a visit to the factory beginning November 2018 and had a discussion with the factory management about issues that were raise in this complaint. According to the brand the management was keen on resolving all structural issues but they need some time to make a complete improvement. Both brand and Fair Wear will follow up.

2019-01-18 Verification

Since the complaint is about structural matters and such matters is best checked with a visit and interview with workers. Fair Wear will suggest either an investigation visit or a verification audit in August 2019. This would give enough time to factory to correct their bonus and opening of bank accounts for all.

2019-12-02 Closed

Odd Molly requested to end membership, which was started and efectuated end of January 2020. A verification audit was not possible anymore. The case was closed.