Triaz GmbH, Complaint 280

CONCERNING LABOUR STANDARDS
Employment is freely chosen There is no discrimination in employment Freedom of association and the right to collective bargaining Payment of a living wage Reasonable hours of work Safe and healthy working conditions Legally binding employment relationship
STATUS
Closed
DATE
2017-11-21

The complainants reported the following grievances:

1. There has been no wage increase in recent years. Workers are not provided with wage slips. Social security (ES and PF) is deducted from their salary.
2. During peak production, workers work two shifts in a row with no breaks or weekly leave. One complainant said he/she has to work during night shifts without rest. The complainant generally works from 6:00 to 14:00 (Shift A) and conducts overtime until 22:00 in the night. If workers refuse overtime, they are asked to leave their job. Overtime hours are only paid at a regular rate. At times, workers have to work on Sundays to clean and are not reimbursed for this work.
3. Production targets are generally high. If the targets are not met, workers are verbally abused by supervisors and management staff.
4. The complainants did not raise the issue with management, fearing dismissal from employment. Management would not let them associate collectively and workers are in general afraid of organising. In the past, workers have been dismissed after voicing concerns.
5. Contract workers are paid a lower bonus (8.33%) than workers on the employment roll, although all workers work for the same amount and work equally hard. Contract workers are not provided any paid leave time.
6. Workers are instructed to take care of the machine and products first in case of fire. Mock fire drills are never conducted, but workers are forced to sign papers confirming their participation.
7. Workers are not provided any workwear.
8. Wage payments take place between the 7th-9th, there is no fixed timing. However all wages, including OT payment, is made by bank transfer.
The complainants stated that they have never been approached by any external auditors or visitors for an interview or conversation. They wanted to talk to the auditors but also feared dismissal. Therefore, the FWF helpline number was a helpful alternative.

Findings and conclusions

On 21 November 2017, FWF's complaints handler in India received a complaint from two factory workers, who raised a number of grievances including excessive overtime, high production pressure, limited freedom of association and lack of internal grievance procedures, and different working conditions for contract workers and on-roll workers. FWF declared this complaint admissible and informed Triaz, the FWF member sourcing at this factory. Triaz discussed the complaint with its agent, who received written and verbal feedback from the supplier. As a FWF audit was conducted shortly before the complaints were received, the audit report was also reviewed. Based on this information, FWF concluded that several points of the complaint were grounded, but proposed an investigation visit to clarify open points. Triaz followed up with the supplier on several occasions to discuss remediation and arrange an investigation visit. As the supplier was unwilling to allow FWF access to the part of the factory where the complaint was received from, Triaz ultimately decided to end the business relationship with the supplier.

Overview of the complaint investigation

2017-12-03 Investigation

Triaz discussed the complaint with its agent, who received written and verbal feedback from the supplier. This feedback was considered as part of the investigation.

As the complaints were received shortly after a FWF audit, FWF reviewed the audit report and interviewed the auditors to establish whether the audit findings would support the points raised in the complaint.
During the audit, several relevant documents were not provided for review at all or with significant delay, preventing a thorough revision. On-site worker interviews were not fully possibly as management followed the auditors around. Off-site interviews took place prior to the audit.

2018-01-16 Conclusion of the investigation

1. There has been no wage increase in recent years. Workers are not provided with wage slips. Social security (ES and PF) is deducted from their salary.

The factory replied that every year on 1 April, for both on-roll and contract workers receive an incremental wage increase. Apart from that, minimum wages rates change twice a year in January and July, and the factory complies with this. The factory stated that the legal minimum wages for Zone B applies to them.
The audit found that the factory paid legal minimum wages according to Zone B; however, the labour department and authorities of the Special Economic Zone (SEZ) reported that factories in the SEZ fall under Zone A, which requires a higher legal minimum wage.

Workers interviewed outside the factory during the audit generally had limited awareness about the makeup of their salary and about legal minimum wage levels. Some workers mentioned an incident in which workers who asked for a wage increase were dismissed. The audit team did not receive the relevant files to corroborate this. Management denied dismissing workers.
The audit team did not see any copies of wage slips. All workers interviewed off site confirmed that they do not receive appointment letters and wage slips.
The social security deductions reflected in documents matched legal requirements, but workers had limited awareness about these deductions.

FWF concludes that the factory pays wages below the legal minimum wage limit for Zone A. Social security appears to be paid correctly, however workers were generally not aware about how their wage is calculated and what deductions are made. There appears to be limited space to discuss wage increases.

2. During peak production, workers work for two shifts in a row with no breaks or weekly days off. One complainant said he/she also has to work during night shifts without rest. The complainant generally works between 6AM-2PM (Shift A) and conducts overtime until 10PM in the night. If workers refuse overtime, they are asked to leave employment. Overtime hours conducted are paid at single overtime only. At times workers have to work on Sundays to clean and are not reimbursed for this work.

Management denied that excessive overtime takes place, stating that if workers conduct overtime hours, they are reimbursed at a double rate.
During the audit, the team found that no time records were kept. The security registry reflected work on Sundays. Workers interviewed off site confirmed this and stated that this is paid at a single rate. They did not, however, mention that workers need to work double shifts. There were also no indications of this in the security registry.
Management confirmed cleaning work on Sundays, but it was unclear whether these workers were being paid and whether it concerned production workers or separate cleaning staff.

FWF concluded that excessive overtime took place and was likely paid at a single rate. Without further investigation, FWF could not determine whether workers have to work double shifts during peak production (the audit took place outside of peak season). FWF could not yet determine whether workers are free to refuse overtime.

3. Production targets are generally high. If workers fail to meet targets, the supervisors and management staff abuse them.

The factory management stated that no written or verbal grievances concerning this issue are on file. Workers interviewed off site during the audit did not mention verbal abuse or extremely high production targets.

FWF cannot determine whether the claim is grounded without further investigation.

4. The complainants have not raised the issue with management fearing dismissal from employment. Management would not let them associate collectively and workers are, in general, fearful of organising. In the past, workers have been dismissed after voicing their concerns.

The factory denied that they dismissed workers who raised issues with management. Workers interviewed off site mentioned that they might be fired if they were seen talking to auditor. During the audit, management stopped the audit team when they distributed worker information cards containing the FWF complaint number. Unions are not allowed to enter the SEZ in which the factory is based.

FWF concludes that there are limits to workers' ability to associate freely and bargain collectively.

5. Contract workers are paid a lower bonus (8.33%), while employed workers are paid more, although all workers work for the same amount and equally hard. Contract workers do not receive paid leave.

The audit concluded that contract workers do receive an annual bonus of 8.33%, which is the legal minimum requirement. On-roll workers received a 20% bonus. This difference could be legal, if the contractor makes less profit than the main factory.
Regarding the leave policy, FWF found that contract workers do not receive paid leave days. The situation for on-roll workers was unclear as the audit team did not see leave reports.

6. Workers were instructed to take care of the machine and product first in case of fire. Mock fire drills are never conducted, but workers are forced to sign papers confirming their participation.

The factory claimed that fire drills were conducted regularly and that workers were not forced to sign documentation about this. Workers interviewed off site were not aware of any fire drills. The information included in the documentation reviewed during the audit was exactly the same for each drill. Physical verification confirmed critical issues with fire safety in the factory. Auditors were not allowed to take pictures.

FWF concluded that fire mock drills were not conducted regularly or that at least not all workers are aware of fire safety measures.

7. Workers are not provided any workwear.

The factory shared pictures of workers wearing personal protective equipment. They also asserted that workers who handle chemicals receive appropriate training.
Workers interviewed off site shared that they are not provided with a separate set of shirts and pants during work. This is not a legal requirement.
The workers also said that they are provided with face masks, but not safety shoes (where applicable). During the audit, the auditors observed workers handling chemicals without wearing gloves.

FWF concluded that the factory is under no legal obligation to provide workwear, and does not give this to all workers.

8. Wage payments take place between the 7th and 9th; there is no fixed timing. However all wages including OT payment are paid by bank transfer.

The factory claimed that all wages are paid before the 7th of a month. Bank transfer statements shown during the audit confirmed that payment was ordered on the 7-9th. It could take up to two days for workers to receive this payment.

FWF concludes that wages are not provided in the legally required timeframe (by the 7th of each month).

2018-01-17 Remediation

Based on the investigation to date, FWF has concluded the following remediation points:

1. a) The factory needs to pay all workers legal minimum wage according Zone A. FWF recommends to start a regular dialogue between workers, management and the brand to increase wage levels beyond the legal minimum wage.
b) Workers need to receive wage slips and appointment letters.
c) Workers should be informed about the breakdown of their salary and what deductions are being made.

2. Overtime hours must stay within legal limits and be reimbursed at double rate.
Management should develop a policy to ensure workers are able to refuse overtime work.

3. Management should create appropriate internal grievance channels in line with Indian legislation, which allow workers to raise issues freely and without fear of retribution. Considering the limits to union work in the SEZ, FWF recommends to establish a workers' committee with democratically elected worker representatives.

4. Paid leave must be granted to all workers in line with Indian legislation.

5. FWF recommends explaining the differences between bonus payments to on-roll workers and contract workers to all employees.

6. Fire drills must happen regularly. The factory must ensure that all workers are aware of measures that need to be taken in the event of a fire to ensure the safety of all workers.

7. Depending on their line of work, workers must be provided with personal protection equipment. Workers handling chemicals must be trained appropriately and wear protection equipment at all times.

9. Wage payments must be settled within the legally required time frame (latest by the 7th of each month).

2018-01-17 Investigation

As some points of the complaint could not be clarified based on the information available to date, FWF plans to conduct an investigation visit in the first quarter of 2018. This concerns especially the extent of production pressure, possible verbal abuse, (excessive) overtime, and workers' ability to refuse overtime.

2018-04-24 Closed

Triaz followed up with the supplier on several occasions to discuss remediation and arrange an investigation visit to clarify open points. As the supplier was unwilling to allow FWF access to the part of the factory where the complaint was received from, Triaz ultimately decided to end the business relationship with the supplier.