Van Lier Shoes B.V., Complaint 330

CONCERNING LABOUR STANDARDS
Payment of a living wage Reasonable hours of work Legally binding employment relationship
STATUS
Closed
DATE
2018-01-11

The complainant has reached retirement age and wants to retire with all benefits, but when he/she discussed this issue with the HR department they said that the company can pay him/her only INR 25 000 as full and final settlement. However, the complainant
thinks that the benefits would be more than INR 25 000 (including gratuity, earned leave etc).

The complainant claims to have been working in the company for several decades. He/she started working when the factory was located in a different location and continued working after the move to the present location. The worker does not have proof of continuous employment (no factory identity card, appointment letter or salary slip). He/she explained that his/her attendance is by way of punching in and out, so there may be attendance records with the company.
The complainant claims that when the factory moved to the new location (7 years back) he/she was not covered by social security so no deductions for ESI or PF were made.

According to the complainant, on 9 January 2018, the factory informed him/her, along with a few other workers, not to come to work for a couple of days as there was not enough work. He/she later learned that an audit was scheduled to take place during those days. This created doubt amongst workers regarding their employment records with the factory. The workers who were asked not to come were mostly those who were 60 years of age or older and the majority of these workers were demanding retirement with proper benefits.
According to the worker there are about 25 workers in the company who are dealing with this problem. The complainant has asked FWF to support him/her as well as other workers affected to receive the retirement payment that they are legally due.

General issues raised by the complainant:
1) According to the complainant, the majority of workers are not provided with a formal employment contract, they do not receive an I-card or salary slips and they are not covered under ESI and PF.
2) The wages, as reported by the complainant, appear to be lower than the minimum wage. Several workers are paid as piece rate workers and a skilled worker might receive about 7000 INR per month. The minimum wage in the state (April-September 2017) is INR 7400 for unskilled, INR 8140 for semiskilled and INR 9118 for skilled workers.
3) The complainant reported that daily work is from 9.30 to 19:00. He/she also said that the company bus service, which transports the workers from the factory to their homes, starts at 19:25. This means that workers work for at least 30 minutes of overtime on a daily basis.

Findings and conclusions

On 11 January 2018 Fair Wear received a complaint from a worker who had been working in this factory for several decades and now wanted to retire. When he checked about the benefits that she/he would get upon retirement the management said that he will be given INR 25000 as a lump sum. The complainant thinks that her/his entitlement would be an higher amount. Fair Wear suggested for an on-site investigation into the complaint, checking of documents and a meeting with the factory management but this request was declined by the brand/factory as they had decided to terminate their membership with Fair Wear Foundation. In October 2018 the worker took a retirement and received a payment of INR 50000 as lumpsum from the factory without giving any details of the amount. In the absence of investigation and hard facts Fair Wear is unable to conclude this complaint whether it was adequately resolved. Therefore, Fair Wear considers this complaint closed but not resolved.

Overview of the complaint investigation

2018-04-27 Investigation

Meeting has been planned between Van Lier and FWF to discuss the complaint on 19 June 2018.

2018-07-03 Investigation

The meeting between Fair Wear and Van Lier took place on 25th June. The complaint was discussed in detail. In response to the complaint the brand/factory sent resignation letter from three workers along with their settlement form, settlement payment calculation and copy of the cheque as a sample. All of these documents were checked by Fair Wear staff.

2018-07-03 Conclusion of the investigation

Based on the study of the documents sent it can be concluded that the settlement for the workers resigned were as per rule. Their gratuity is rightly calculated and due leaves have been paid as well. This however, does not establish the fact that all workers get the benefit upon leaving their job. Studying this complaint with another information call received from this factory in December 2016 and in view of the last CAP which said, "Factory does not have any formal systems of employment, recruitment and dismissal. Documentation is not adequately maintained. For 70% of the workforce, no records are maintained" it is feared that most of the workers would fall off the social protection and severance pay. We believe that not all 70% of these workers were contractual workers as it would go against the Contract labour (regulation and abolition) Act, 1970.

According to the legal advice seeked by Fair Wear, in case this complainant is a contractual worker the liability will be that of the contractor. However, if at any point the payments were made directly by the factory to the worker then the factory management cannot be absolved of their responsibility.

Fair Wear would like to recommend further investigation into the complaint through off site interviews of workers and on site document check and meeting with the management within this month.

2018-07-09 Investigation

Fair wear tried to reach the worker to get updates on complaint but was unable to get through him/her.

2018-08-30 Investigation

A proposal was made to the brand that a local FWF team (who is aware of the names and the details of the claims) visits the factory, checks documents, interviews management and then corroborates this before and after in confidence with the complainants. Findings can be shared with the management and with the brand (if Van Lier is visiting the factory in the coming months).

This proposal was declined by the brand the same day as they had decided to terminate their membership with Fair Wear.

2018-10-22 Conclusion of the investigation

In the absence of any investigation on the ground Fair Wear is unable to conclude the complaint with facts.

2018-10-30 Verification

Fair Wear complaint handler called the worker to check on his status of employment and got to know that the complainant retired from his job. Management offered to pay him/her a lump sum of INR 50000 (inclusive of all benefits) as retirement benefits on the condition that she/he submits resignation letter and sign the full and final payment offer. Seeing no other alternative, he submitted resignation and signed the full and final payment but he/she is not aware of the breakup of this amount under various benefit heads.

2018-10-30 Closed

In the absence of any investigation on the ground Fair Wear is unable to conclude the complaint with facts whether it was resolved. Therefore, Fair Wear considers it closed but not resolved.