Takko Holding GmbH, Complaint 202

CONCERNING LABOUR STANDARDS
Payment of a living wage
STATUS
Resolved
DATE
2016-11-29

The complainant claimed that (s)he and other workers had not received their salary for the last three weeks. The salary for one week has been deposited in the bank, but the complainant was unable to withdraw it.

After a strike, the management settled the salary for 40 workers.

The factory facilitated that workers could open bank accounts last week, but there are still difficulties in issuing ATM cards.

The Indian government recently and with a notice period of four hours announced that 500 and 1000 INR currency notes would no longer be a valid tender. This comprises 86 % of all currency in circulation.
Due to demonetization every bank restricts the account holder to withdraw a minimum amount.

The worker is aware about the restrictions (also to the factory), but stated that other factories in the area have been able to settle salary payment.

Findings and conclusions

On 29 November 2016, FWF complaints handler in India received a complaint from a factory worker, who claimed that The complainant claimed that (s)he and other workers had not received their salary for the last three weeks. The salary for one week has been deposited in the bank, but the complainant was unable to withdraw it. The factory facilitated that workers could open bank accounts last week, but there are still difficulties in issuing ATM cards. Furthermore, the Indian government recently and with a notice period of four hours announced that 500 and 1000 INR currency notes would no longer be a valid tender. This comprises 86 % of all currency in circulation. Due to demonetization every bank restricts the account holder to withdraw a minimum amount. The worker is aware of the restrictions (also to the factory), but stated that other factories in the area have been able to settle salary payment. FWF declared this complaint admissible and reached out to Takko, the FWF member brand sourcing at this factory. Takko's local audit team conducted an investigation into this complaint on 2 December 2016. Takko concluded that salary payments were indeed delayed due to the unexpected demonetization situation. As a reaction, management proceeded to open salary bank accounts for all workers and ordered ATM cards. This process was taking longer than usual given the recent high demand. Management plans to install an ATM machine at the factory. The FWF verification in February 2017 audit confirmed the findings of the Takko audit team. All workers now receive their salary in their bank account latest by the 5th of each month. The complaint has been resolved.

Overview of the complaint investigation

2016-12-01 Investigation

FWF informed Takko about the case on 1st December 2016. Takko’s local audit team conducted an investigation on 2nd December 2016. The findings of the investigation were discussed with the complainant by FWF.

2016-12-02 Conclusion of the investigation

The investigation by Takko concluded that salary payments were indeed delayed due to the unexpected demonetization situation.
As a reaction, management proceeded to open salary bank accounts for all workers and ordered ATM cards. This process was taking longer than usual given the recent high demand.
As per 30th November 2016, factory management has opened accounts for all workers and has deposited their salary. Since some workers still experienced problems in withdrawing cash, management assisted them in this process as well.
In the future, management plans to install an ATM machine at the factory.

2016-12-02 Remediation

No further remediation needed. The planned ATM machine would certainly be of further benefit to the workers.

2017-02-02 Verification

The FWF verification in February 2017 audit confirmed the findings of the Takko audit team. All workers now receive their salary in their bank account latest by the 5th of each month.

2017-08-02 Evaluation of the complaint

The complainant also confirmed that all salaries are paid regularly now via bank accounts, but has since left the company for other reasons.

2017-08-02 Resolved

The complaint has been resolved.