Takko Holding GmbH, Complaint 757

CONCERNING LABOUR STANDARDS
Payment of a living wage Legally binding employment relationship
STATUS
Closed
DATE
2019-07-24

The complainant stated that the factory did not announce the piece prices of the sewing workers before production ; and when an order was finished, if the factory thought their wages were too high, it reduced their piece price to control their income to be 'balanced'. The worker complained her/his wage has been decreased by 800 Yuan per month, from the previous 4000 or more Yuan per month to the current 3000 or more RMB/month.
On the 24 July 2019, all the sewing workers from the 3rd and 4th floor, over one hundred people went on a strike.
According to the complainant the workshop director threatened them that 'if you don't want to work, you can quit'.
The complainant sent another message to inform they were still on strike on the 25th July 2019.

Overview of the complaint investigation

2019-07-25 Investigation

Fair Wear reached out to Takko to follow up on the unclear piece rate pricing and to confirm whether wages had gone down after the order was finished. This was the second complaint in this factory regarding unclear piece-rates (last complaint was made in 2018).

2019-07-29 Investigation

Takko informed Fair Wear that they would immediately take this up with the supplier.
The supplier responded that they were very sorry to receive this complaint and informed Fair Wear that the factory has standard cutting and sewing prices for the basic styles. Nevertheless, they may slightly adjust these prices according to the style and quantity of the garment. If quantity is small, they will increase the price, if the quantity is big, they will reduce it slightly. All workers are informed about this process.

Last month the factory received a pyjama order for 260,000 pieces. This order was not from Takko, but from a US customer. Due to this large quantity, the factory reduced pricing by 2-5 cents (RMB) for 30% of the process. However, some workers did not agree with this adjustment and wished to keep the same piece price. The factory manager noticed this and had a discussion with these workers. Finally the manager increased some prices and all workers were satisfied with this result. The next day all these workers went to work.
In the future, the factory has promised to have better communication with workers in advance of price adjustments. Takko will also advice their colleagues to keep an eye on this during order placement.

2019-07-31 Conclusion of the investigation

In addition, Fair Wear spoke to the Takko representative in China who confirmed that the strike had been stopped and that all workers had returned to work.
The strike was caused by an order of pyjamas from an American client. After finishing this order, the factory owner thought they did not make the profits expected, and as a result, they lowered workers piece prices. Due to workers strike, the factory reached an agreement with workers to raise the piece prices for that order accordingly and all workers resumed to work.
The local Takko representative mentioned that currently the piece prices at this factory are still not 100% transparent, as the factory owner claims it is difficult to announce the orders prices before production. They say they need to fine-tune the final prices after the orders are finished based on the defective rate, quality, real costs etc.
Takko is aware that the piece price must be 100% transparent before production begins.

2019-08-01 Remediation

Fair Wear requested that Takko must inform the factory that they must announce the piece price before production and that they cannot change the piece price after production.

2019-10-02 Verification

Takko informed Fair Wear that the factory management posts the piece price listing in the factory in advance and that they do this for every order.
Fair Wear is trying to set up connections with the complainant to verify this and is still waiting for his/her response.

2019-10-06 Evaluation of the complaint

Fair Wear received feedback from the complainant:
The complainant confirmed that the piece prices were posted on the notice board in the factory accessible to the workers. However, after finishing an order, the workers are required to submit the quantity data to the factory for wage calculation. Based on the quantity data provided, the factory sets the final piece prices; these final prices will be slightly different from the prices that were published initially, depending on the styles, craftsmanship etc. She/he claimed the current piece prices published in the workshop are basically consistent with the final ones, so even though they do not exactly match the initial piece price listed , the deviations are so subtle that the complainant finds it acceptable.
The complainant was grateful for Fair Wear's help on the matter.

2019-10-06 Closed

This complaint was closed. Nevertheless there appears to be a structural problem within the factory.
A similar complaint was received in November 2018 and was also mentioned in the Fair Wear audit of September 2018: "3 cutting workers complained the piece price for some specific orders were not announced until the order was finished".
Therefore Fair Wear requested that Takko should continue to follow up with this factory and push for a completely transparent piece price list before production. Fair Wear suggested another audit or visit to the factory in 2020 to verify this issue.