German clothing group, s.Oliver, have this week given 100K Euros to 2,000 former garment workers in Indonesia who are legally owed $5.5 million in severance pay. The money comes on the week of the 8th anniversary of the Jaba Garmindo factory bankruptcy.
The workers have been fighting for the $5.5 million owed to them since the Jaba Garmindo factory went bankrupt in April 2015. The former Jaba Garmindo workers were producing for s.Oliver as well as global brand Uniqlo. Despite being one of the world’s most valuable clothing brands, Uniqlo, under parent company Fast Retailing, still refuses to pay anything towards the debt owed to these workers. To put the $5.5 million into context, as of April 2023, Fast Retailing has a market cap of $75.84 billion and Uniqlo has a brand worth of almost $10 billion.
Teddy Senadi Putra, worker representative from Labour Union PUK SPAI Federasi Serikat Pekerja Metal Indonesia (FSPMI), formerly at PT Jaba Garmindo, said: “S.Oliver’s payment is long overdue, but it doesn’t come close to what we are owed. 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 8 years, where is our justice?”
The former Jaba Garmindo workers have tried every available avenue to get the money owed to them, including going through the courts in Indonesia, where the amount owed to them was confirmed. The courts, however, have no power to compel international companies such as Fast Retailing 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, Fast Retailing remains an active member of FLA.
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.
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.
Relying on brands to do the right thing simply doesn’t work. Legislation and legally-binding agreements are urgently needed to hold brands to account for violations in their supply chains and 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 Pay Your Workers 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. The Indonesian unions involved in the Pay Your Workers campaign have requested s.Oliver to engage with them in direct negotiations, but unfortunately s.Oliver has refused to engage.
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.”