Indonesia: Garment workers forced to resign after factory closure receive $4.5 million in unpaid severance after WRC intervention
Author: Worker Rights Consortium (WRC), Published on: 9 December 2019
"Largest Sum Ever: WRC recovers US$4.5 Million in unpaid severance", 4 December 2019
... [T]wo thousand Indonesian workers [have] received... the largest amount workers have won in a single case of illegally denied severance.
... [In] 2018... PT Kahoindah Citragarment... an Indonesian garment factory owned by the Korean firm Hojeon LLC, had announced that the factory would be closing... in response to Nike’s decision to end its sourcing relationship with... the factory, which at the time... employed 2,001 workers [and] produced... for Nike and... Fanatics.
... [A]ccording to the WRC’s findings, management engaged in a campaign of consistent and targeted harassment to coerce [the majority of] workers to resign from the factory before the closure, which greatly reduced the amount they owed to workers in severance [as per Indonesian law]... sav[ing] the company approximately US$4.5 million...
[T]he WRC approached... key brands sourcing from Hojeon’s Indonesian factories. After Fanatics, Gap, and Under Armour communicated clearly to Hojeon that they expected the firm to make workers whole...Hojeon [paid] ... affected workers an additional US$4.5 million... in August and November 2019. On average, workers received the equivalent of seven months’ pay... a critical resource... after losing their jobs...