Van Lier Shoes B.V., Complaint 239

CONCERNING LABOUR STANDARDS
Payment of a living wage Reasonable hours of work Legally binding employment relationship
STATUS
Closed
DATE
2017-05-21

The complainant, a driver for the factory, claimed that he/she had been working in the company since 14 April 2015, before suddenly being dismissed on 15 May 2017, without receiving a show cause notice or warning. According to the complainant, the owner became angry about some problem with the vehicle, used abusive language and then told the complainant to leave. The complainant asserted that he/she did not commit any mistake nor was he/she allowed to clarify anything, and that the sudden termination of his/her job was unjustifiable. In addition, the complainant shared the following concerns:
- ESI and PF (social security) benefits commenced in December 2016, but did not include the previous time he/she worked at the company.
- On many occasions, he/she used to work from 9:00 to 21:00 and sometimes as late as 00:00. Normally the complainant was not paid for overtime work, but when the hours extended very late (after 23:00), he/she received Rs 150 as compensation. The complainant's wage was Rs 12,000 per month.

Findings and conclusions

FWF’s complaints handler in India received a complaint from a former factory worker, who claimed that he/she was dismissed without a show cause notice or warning after a conflict related to damage to a company vehicle. The complainant claimed that this was not his/her fault and that he/she did not receive appropriate social security benefits or overtime compensation. FWF declared this complaint admissible and informed Van Lier, the FWF member sourcing at this factory. Van Lier reached out to factory management, who gave an explanation for the dismissal of the driver and sent three documents related to the procedures of the dismissal. FWF reviewed these documents and an audit report from December 2016 and concluded that the documents reflect a legal dismissal procedure and that the legally-required payments including notice pay and retrenchment compensation were paid. The audit indicated that the factory did not have any formal systems in place for employment, recruitment and dismissal and that management was not maintaining proper documentation. FWF required Van Lier and the factory to ensure follow up of the structural remediation points that were raised in the audit and in this complaint. On 28 August, the complainant confirmed receipt of the amount claimed but added that he/she did not want to pursue the complaint further. FWF will verify the remediation of the structural problems during a verification audit in 2018.

Overview of the complaint investigation

2017-06-02 Investigation

FWF informed the brand about the case, which then contacted the supplier and asked for a reply. The supplier's management gave an explanation for the dismissal of the driver and sent three documents related to the procedures of the dismissal. FWF reviewed these documents: the show cause notice from management, the resignation letter and settlement paper, along with the detailed e-mail from the supplier.
In addition, FWF also reviewed a FWF audit report from December 2016.

2017-09-11 Conclusion of the investigation

FWF discovered that the supplier first issued a warning letter asking the complainant to provide an explanation within three days of the receipt of the letter for the damaged car and for his/her late arrivals. However, the complainant went to the supplier’s office on 22 April and gave his/her resignation letter. On the same day, management paid the complainant’s dues, with two months’ salary as compensation.
FWF concludes that the documents reflect a legal dismissal procedure and that the legally-required payments including notice pay and retrenchment compensation were paid.
The complainant had also raised an issue regarding inadequately compensated overtime and mentioned that his/her social security deductions only began in December 2016, despite having been employed since April of that year. Management’s response did not address either issue, both of which could potentially also be affecting other workers.
The recent FWF audit from December 2016 drew the following conclusions about this complaint:
-The factory does not have any formal systems in place for employment, recruitment and dismissal. Documentation is not adequately maintained. No records are maintained for 70% of the workforce.
- Less than half the workers are on company payroll and only a proportion are covered by ESI and PF (social security). Some workers reported that deductions take place for ESI but they have not yet received a PF slip or ESI card.
-Workers did not receive salary slips and so it was not possible to check whether deductions were being made. Only a few workers could show ESI cards.
- There were several strong indications that overtime hours are excessive, unrecorded and unpaid for and might extend up until 23:00.
FWF concludes that the points raised in the complaint are grounded.

2017-09-11 Remediation

FWF required Van Lier and the factory to ensure follow up of the structural remediation points that were raised in the audit and in this complaint. The audit's Corrective Action Plan outlines concrete remedial actions.

2017-09-11 Verification

A follow-up call to the complainant made on 28 August 2017 confirmed that he/she received the amount claimed by the management. The structural problems of overtime and social security are under remediation. FWF will verify progress during a verification audit in 2018.

2017-09-11 Evaluation of the complaint

On 28 August, the complainant confirmed receipt of the amount claimed but added that he/she did not want to pursue the complaint further. However, the complainant refused to accept management's explanation and maintained that the points he/she raised in the complaint were all true.

2017-09-11 Closed

FWF considers the individual complaint to be closed since the complainant received the correct payment (except overtime) and does not want to pursue the other points. However, the structural matters (like excessive overtime) mentioned in the complaint and audit remain and require remediation.