An Overview of Working Conditions in Sportswear Factories in Indonesia, Sri Lanka & the Philippines
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An Overview of Working Conditions in Sportswear Factories in Indonesia, Sri Lanka & the Philippines April 2011 Introduction In the final quarter of 2010 the ITGLWF carried for export to the EU and North America, and out research in major sportswear producer many of those in the Philippines are also countries to examine working conditions in exporting to Japan. factories producing for multinational brands and retailers such as adidas, Dunlop, GAP, Greg Collectively the 83 factories employed over Norman, Nike, Speedo, Ralph Lauren and 100,000 workers, the majority of whom were Tommy Hilfiger (for a full list of the brands females under the age of 35. This report con- and retailers please see Annex 1). tains an executive summary of the findings, based on information collected from workers, The researchers collected information on work- factory management, supervisors, human ing conditions at 83 factories, comprising 18 resource staff and trade union officials. factories in Indonesia, 17 in Sri Lanka and 47 in the Philippines. In Indonesia researchers focused The research was carried out by the ITGLWF’s on 5 key locations of sportswear production: Bekasi, Bogor, Jakarta, Serang and Tangerang. affiliates in each of the target countries, in In Sri Lanka researchers examined conditions some cases with the assistance of research in the major sportswear producing factories, institutes. The ITGLWF would like to express mainly located in Export Processing Zones, and our gratitude to the Free Trade Zones and in the Philippines researchers focused on the General Services Employees Union, the National Capital Region, Region III and Region ITGLWF Philippines Council, Serikat Pekerja IV-A. All of the factories covered are producing Nasional and F GARTEKS SBSI. The International Textile, Garment and Leather Workers’ Federation (ITGLWF) is the global voice of textile, garment and leather workers. The ITGLWF brings together 217 trade unions from 110 countries with a combined membership of ten million workers. 1 Executive Summary Contract and Agency Labour The ITGLWF asked researchers in Indonesia and permanent employees to sign short term contracts. the Philippines to examine the use of contract and On average 25% of the workforce in the surveyed agency labour (CAL) in the sportswear sector. We Indonesian factories were employed on a short use the term CAL to describe many forms of pre- term or temporary basis. carious work, including temporary contract and fixed-term employment, agency work, bogus Researchers found that workers employed via self-employment, individual contracts, seasonal private agencies were denied a number of work, zero hours contracts, on call / daily hire and day labour. entitlements and benefits. Workers reported that they did not receive: Indonesia l pay when taking annual leave Researchers in Indonesia found that a high per- l separation payments at the end of the centage of workers, in a number of factories, employment period were employed on short term contracts. At two l written contracts factories in Tangerang, which we will call Factory l sick pay A and Factory B, 80% and 50% of the workforce respectively were found to be employed on short Workers told researchers that during peak season term contracts. Factory A currently supplies apparel the factory would recruit permanent staff, but these to one of the world’s largest sportswear brands while workers were often fired at the end of their 3 month Factory B supplies two well known US brands. The probationary period because the employer no researchers also confirmed that the primary business longer required them. The employers would not of Factory A was acting as a subcontractor for a larger pay minimum wage or social security provisions factory in the vicinity. In Factory C alone, a company during this probationary period. which supplies shoes to a major sportswear multina- tional, 1,892 workers were employed on temporary contracts. The shortest contract recorded in Indonesia was 6 months. The majority of workers employed on short term contracts had their contracts renewed between 2 and 4 times. One worker interviewed had been employed on a series of 6 month contracts at the same employer for over 5 years. It was also found that the use of contract workers was spread across most production positions and not limited to any specific role or level of responsibility. When comparing responses from permanent The researchers found that the percentage of CAL workers and CAL workers, researchers noted that workers employed at the surveyed factories has contract and agency workers were more likely to increased year on year since the implementation be exploited by factory management, and were of Labour Legislation No.13/2003. Workers inter- most likely to suffer from lower wages, forced viewed reported that management have forced overtime, intimidation and higher production targets. 2 Marisa, a worker at Factory P producing for a North-American luxury apparel company, told researchers: Violations of labor standards is evident in the company such as non-payment of “ legally mandated minimum wage, especially to our co-workers who are under “contractual arrangement, maltreatment of supervisors and non-payment of separation benefits. The Philippines Workers are also unlikely to challenge management practices or raise grievances relating to working In the Philippines researchers found that 25% of conditions as they feel that those who do so are the workers were employed precariously, over one unlikely to secure permanent employment at the third of who were employed through a private end of the probationary period. employment agency. Other agency workers were employed through the DOLE Public Employment At Factory D in Cavite, 50% (1,500) of workers were Services Office. The researchers report that the employed on 5 month contracts. Researchers found percentage of the workforce employed on a con- that the company forced workers to join the in-house tract basis has been increasing steadily year on manpower cooperative before providing them with a year, in line with DOLE figures1 which show the use new contract. This manpower cooperative was set up of contract labour increasing by 20% in recent years. by the factory owner and as such contravenes Philip- pines Labour code provisions on contracting and All the casual2 and short term contract workers subcontracting arrangements which prohibits surveyed were found to be carrying out core the “Contracting out of a job, work or service through business activities yet were being denied regu- an in-house agency”. lar employee status as provided for in Article 280 of the Labour Code of the Philippines. This At Factory E in Bataan 85% of the 1,600 employees article states that employment will be deemed were employed on 5 month contracts. At the end of regular “where the employee has been engaged the 5 month period workers were forced to sign a let- to perform activities which are usually necessary ter acknowledging that their contract had expired. or desirable in the usual business or trade of the They could then apply to work as an emergency employer”. worker for 15 days. If they wished to continue employment after these 15 days workers were The findings also suggest that employers are required to submit yet another application, and systematically circumventing the law in order to were then hired on another 5 month contract. avoid regularising their workforce. Researchers noted that CAL workers are denied the regular The number of instances where such practice was employment status automatically granted after documented shows that it is widely practiced. It also 6 months, as they are usually let go after only 5 seems that employers are letting go of workers just months. The research findings show that no casual before they would be granted regular employment or temporary worker surveyed was employed and security of tenure as defined by the Philippines beyond the 6 month point, although some were Labour Code. rehired on new contracts. The short-term nature of their employment means that all casual and The Filipino Courts have ruled as invalid the use temporary workers are essentially subject to a of 5 month contracts involving workers who were probationary period for their entire employment performing activities usually necessary or desirable period. This means that the workers are easier to to the business. Despite this practically all of the dismiss and they are entitled to fewer benefits. temporary workers covered in our research were performing core duties. 1 http://www.bles.dole.gov.ph/LABSTAT/Vol14 6.pdf 2 Filipino definition of a Casual Worker: A worker engaged to fill up a vacancy or a new position created by the absence of a prospective employee or qualified job applicant. Unlike permanent or regular employees, they are 3 Department Order No. 18-02 on contracting and subcontracting. given appointments for the position for a fixed date or time only. 4 (Pure Foods Corp. vs. NLRC et al, 283 SCRA 133). 3 SUPREME COURT FIRST DIVISION Trade union rights G.R. No. 122653 December 12, 1997 Pure Foods Corp. vs. NLRC et al, 283 SCRA 133 In both Indonesia and the Philippines researchers found that the vast majority of CAL workers were not “This scheme of the petitioner (employer) was apparently members of trade unions. The main reason for this designed to prevent the private respondents (employees) was fear that if management and employers found and the other “casual” employees from attaining the status out about their union membership they would not of a regular employee. It was a clear circumvention of the have their contract extended. This seems to be a employees’ right to security of tenure and to other benefits justified concern as trade unions confirmed that the like minimum wage, cost-of-living allowance, sick leave, holiday pay, and 13th month pay. Indeed, the petitioner majority of CAL workers they recruited did not have succeeded in evading the application of labor laws.