Sportswear giant Nike today (12 January) told just-style it "commends" one of its Indonesian suppliers after it agreed to reimburse workers more than US$1m in unpaid overtime.

As part of measures to resolve the long-running dispute, the PT Nikomas Gemilang IY plant shoe factory in Banten province will pay US$1,002,830 in back wages to around 4,500 workers. The dispersion of these funds will be overseen by a local third party.

The company also said it would offer training programmes for the local management team covering "cultural sensitivity, respectful supervisory skills, team leadership and human resource management," as well as set up a task force to address grievances.

A third party accredited by the Fair Labor Association (FLA) has also been engaged to review plans, conduct employee satisfaction surveys, and report on results.

"The decisive actions taken by PT Nikomas Gemilang IY plant clearly demonstrate how seriously they are taking the allegations of workplace misconduct," Nike said, adding that it "commends the factory on their action plan and efforts to correct inadequacies in current policies designed to protect the rights of workers. 

"Nike will continue to monitor and support their efforts to remediate the situation."

The settlement comes seven months after manufacturers and brands including Adidas, Nike and Puma signed a pact with textile, clothing and footwear unions that strengthens rights for workers in Indonesian sportswear factories.

The agreement, described as "historic" by the parties involved, allows workers to organise and carry out union activities at sportswear supplier factories.

It's not the first time Nike has been caught up in unfair labour practices at Indonesian factories. Most recently, in June last year, it promised "immediate and decisive action" after reports surfaced of alleged physical and verbal abuse at the Pou Chen and PT Amara facilities near Jakarta, which make footwear for the company's Converse brand.