On the eighth anniversary of the bankruptcy of the Jaba Garmindo garment factory, Clean Clothes Campaign (CCC) announced s.Oliver has compensated 2,000 former workers who were legally owed US$5.5m in severance pay.
CCC says the workers have been fighting for the $5.5m owed to them since the Jaba Garmindo factory went bankrupt in April 2015. However, the human rights organisation says that despite being one of the world’s most valuable clothing brands, Uniqlo, under parent company Fast Retailing, has not yet paid anything towards the debt owed to these workers.
“S.Oliver’s payment is long overdue, but it doesn’t come close to what we are owed,” said Teddy Senadi Putra, worker representative from Labour Union PUK SPAI Federasi Serikat Pekerja Metal Indonesia (FSPMI), formerly at PT Jaba Garmindo. “Where is Uniqlo? One of the richest brands in the world continues to turn their back on us, even though we made their products and profits. Uniqlo pretends to be an ethical company but they still won’t pay us what we are owed! After eight years, where is our justice?”
The former Jaba Garmindo workers went through the courts in Indonesia to secure compensation from the bankruptcy, where the amount owed to them was confirmed. The courts, however, have no power to compel international companies to pay up.
In October 2019, Clean Clothes Campaign and Indonesian labour union FSPMI filed a third-party complaint to the Fair Labor Association (FLA), a multistakeholder initiative (MSI) that both Fast Retailing and s.Oliver were members of. S.Oliver has since left FLA and is now a member of Fairwear Foundation.
In July 2021, the results of the FLA investigation were published and the report recommended that Fast Retailing and s.Oliver, along with other brands that sourced from the factory, pay into a relief fund for workers. Despite wilfully ignoring these recommendations, CCC says Fast Retailing remains an active member of FLA.
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“The failure of FLA to ensure one of its member brands takes action in line with its own recommendations exemplifies the problem with MSIs when it comes to upholding ethical practices: as voluntary initiatives they hold no power and are unable to adequately protect workers’ rights,” CCC says.
“The ongoing struggle of the former Jaba Garmindo workers has shone a spotlight on severance theft and the extreme challenges workers face when fighting for justice in the industry. In many production countries, including Indonesia, national social protection systems are not currently robust enough to adequately cover severance payments. Poverty wages are the norm across the industry, meaning garment workers have little possibility of putting money aside in savings, and legally-mandated severance pay fills this gap, acting as a vital safety net should workers lose their jobs. The need for severance pay is enshrined in national laws and yet severance theft affects hundreds of thousands of workers worldwide, with cases rising exponentially since the pandemic began.”
The Clean Clothes Campaign is calling on all brands to sign the binding Pay Your Workers agreement to ensure an end to wage and severance theft. The agreement includes the establishment of a global severance guarantee fund, which will ensure that in the future garment workers won’t be forced to fight for money owed to them, as the Jaba Garmindo workers have had to.
Ilana Winterstein, campaigner for Clean Clothes Campaign, said: “This case illustrates the lack of accountability in the garment industry, and ongoing corporate impunity. No brand should be able to simply turn their back on their workers and walk away from abuse in their supply chain, as Uniqlo has done. And no worker should be forced to fight for eight long years for money that they have legally earned.”
A spokesperson for Fast Retailing told Just Style that a “thorough and independent” investigation into this matter was already concluded by the Fair Labor Association (FLA) at the formal request of Clean Clothes Campaign and a labour union representing workers of PT Jaba Garmindo.
“The FLA investigation found unequivocally that the actions of Uniqlo, and its parent company Fast Retailing, did not contribute in any way to the PT Jaba Garmindo bankruptcy, and concluded that neither Uniqlo, nor Fast Retailing, has any obligation pertaining to this matter.”