Swedish garment brand H&M has found itself at the centre of allegations regarding worker layoffs at one of its Indian supplier facilities after a factory closure resulted in more than 1000 employees out of work.
The New Trade Union (NTU) has stated that workers at the garment factory lost their jobs without warning at a garment factory in Karnataka after H&M cancelled its orders amid the coronavirus pandemic.
Sacked workers are still protesting outside the Euro Clothing Company factory (ECC-2), owned by Gokaldas Exports, in Srirangapatna, Karnataka, weeks after the factory was shut down.
Why is this wrong?
A notice at the factory read: “The management of the company has decided to lay off the workers at Srirangapatna plant with effect from June 8, 2020, in the interest of the plant and also to save the employment of the workmen.”
Local trade unions, alongside labour department official, MV Roopa, claimed that the factory was closed without the one month notice period, that is legally mandatory, according to the Telegraph India.
According to the general secretary of Garment and Textile Workers Union (GATWU), “the process of layoff is illegal because the ECC-2 did not follow the procedure laid out under section 25 M of the Industrial Disputes Act, which states that in an establishment that employs more than 100 workers the employer needs to get prior permission from the government in a specified format to lay off its workers.”
Mr Mody said that after some machinery was removed from the factory on 30 May, officials from the GATWU, spoke to factory management, but there was no indication that the removal was related to lay-offs.
What is happening now?
Ms Roopa told The News Minute: “We held meetings with the officials on Monday but they said that they cited the same reason for laying them off, that is, due to lack of orders in view of the Covid-19 crisis.
“The labour department has now issued a notice to the company against this decision.”
Mr Mody added that the discussions are at “a complete impasse. The supplier refuses to budge and H&M is incommunicado. H&M is bound by a global framework agreement with IndustriALL Global Union which it is unwilling to even bring to the table.”
Mr Mody added: “H&M is the only MNC (manufacturer) for which ECC-2 has been manufacturing in 2020. In 2019, ECC-2 manufactured almost 90% production for H&M.
“Therefore, H&M was clearly aware that they were reducing orders leading to the shutting down of the factory.”
What does H&M have to say?
After a video of the protesters circulated on social media on Monday, H&M said it was attempting to resolve the conflict. H&M replied to a tweet that criticised the factory closure, and said: “The drop in customer demand due to Covid-19 will inevitably impact suppliers, however we are placing orders with this supplier and we fully stand by our responsible purchasing practices.
Mr Mody added that he thinks “the actions of the supplier are patently illegal and H&M has nothing to say on this. Which law allows the supplier not to pay wages or to lay-off without notice? H&M is in effect party to the union busting through its silence.”
He claimed: “H&M must take full responsibility of the situation and require Gokaldas to immediately place orders specifically at ECC-2 and live up to its commitment that it has made to the international community to ensure jobs are not lost in their supply chain.”