ODLO International AG, Complaint 870

Payment of a living wage
Evaluation of the complaint

On 8 April, the Fair Wear Complaints Handler in Romania received a call from a worker, who claimed that the factory workers have experienced a drastic decrease of their Easter Holiday bonus. The complainant stated that the bonus had been decreased from 500 RON (in 2019) to 50 RON this year. The complainant expressed dissatisfaction about the decision, as it was communicated with the workers without previous consultation or any worker involvement. The worker noted that this meant that the workers' efforts to work during the COVID-19 pandemic were not appreciated but rather discredited, as it resulted in a decreased Easter Bonus.

The complainant furthermore stated that the workers are always stressed and worried that they will not achieve their production targets, while at the same time, the produced products are currently not selling on the market. Management told the workers that nothing can be done in this regard.

The workers are afraid to react more openly about this issue as they are afraid to lose their jobs in these unprecedented times.

Overview of the complaint investigation

2020-04-09 Investigation

Fair Wear addressed the issue with Odlo International, who discussed the issue with the factory management. Through this they were able to confirm that the Easter bonus had indeed been reduced to 50 RON. The factory management informed worker representatives about it on Wednesday 8 April.

The reason the factory gave for this to the workers was the impact that the COVID-19 crisis was having on business.

2020-04-14 Conclusion of the investigation

Factory management confirmed that the Easter bonus was reduced due to the COVID 19 impacts on business.
Odlo International took up the issue promptly. They stated that they were not aware that factory management had made this decision when the complaint had been filed but they were informed later in the week. The brand agrees that the bonus should be paid and communicated this with the factory.

2020-04-15 Remediation

Odlo re-emphasised to the factory management the importance of and brand commitment towards reaching the goal of paying a living wage to the workers. The decisions made on factory level need to be aligned with Odlo brand beforehand as the brand agreed on paying a living wage together and every bonus are a part of that.

It will be further discussed internally how to prevent this in the future and to ensure communication flow is consistent on all matters.

Factory management agreed to pay the full bonus and they confirmed this will be communicated after the Easter holidays to the worker representatives.

2020-04-21 Verification

The Fair Wear member stated that the complaint will be resolved and the Easter Bonus will be paid, in full, to the workers after the Easter Holidays. The brand and the factory are working on formulating this payout.

2020-04-29 Verification

Odlo has confirmed that the payout will be made with the next salary paychecks.

Fair Wear will verify this information with the complainant after the salary payments are made.

2020-04-30 Evaluation of the complaint

Pertaining to the prevention of similar issues occuring in the future, Fair Wear strongly recommends that the brand work together with the factory on:

1. Driving greater ownership at the factory level to ensure a clear understanding of the brand's commitment to the payment of a living wage and building capacity of the factory to support this process. The member is encouraged to actively work and extend support to the factory to address any challenges, especially those relating to any conflicting priorities (e.g. price/cash flows vs bonus payout to workers) which the factory might face in this process.

2. Understanding and addressing the root causes of the lack of use of the internal grievance mechanisms in consultation with workers and their representatives.

3. Supporting the strengthening of the social dialogue process and worker representation.