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Philippines: Labour groups call for wage subsidies for 200,000 workers in economic zones affected by COVID-19 lockdowns; Incl. brands' responses

Labour groups in the Philippines, including Partido Manggagawa, are calling on employers to pay wage subsidies of P10,000 per month (approx. USD199) to some 200,000 workers affected by the closure of special economic zones as a result of COVID-19 lockdowns. The closure of the Mactan Economic Zone due to a community-wide lockdown ordered by the authorities on 27 March 2020 has affected 100,000 workers, while a further 100,000 workers have been affected by the shutdown of the Cavite Economic Zone on 19 March. 

The Department of Labor and Employment (DOLE) has launched a financial assistance program under which workers affected by COVID-19 lockdowns are eligible to receive a subsidy of P5,000. However, surveys of workers affected by the lockdown of the Cavite Economic Zone have revealed workers have not received the DOLE subsidy and are facing increasing difficulties due to the lack of support. 

Labour groups say foreign investors in the economic zones - who have benefited from increased economic growth, tax breaks and other privileges for years while worker wages have remained stagnant - should bear temporary financial losses during the COVID-19 pandemic.

According to Partido Manggagawa, with the exception of Electronics firm Fairchild Semiconductor (Philippines) Inc. - which has provided its employees with wages for 20 days while they are out of work - other employers in the Mactan Economic Zone are refusing to grant adequate assistance to workers. Among them is Sports City International, a garments conglomerate which supplies to global brands. adidas, New Balance, lululemon and Under Armour are publicly listed as buyers from facilities operated by Sports City International. 

Business & Human Rights Resource Centre invited adidas, New Balance, lululemon and Under Armour to respond to the situation facing workers in their supply chain in the Mactan Economic Zone. Responses from adidas, New Balance and lululemon are included below. Under Armour did not respond.

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25 June 2020

Philippines: Labour group calls on intl. brands to provide urgent aid for garment workers & protect freedom of association at Sports City

Author: Partido Manggagawa

"Sports City workers' demands to Adidas and other brands", 25 June 2020

Workers of the Adidas supplier Sports City conglomerate are asking the brand to mediate in their urgent demands in the light of the grave impact of the covid pandemic on their working and living conditions. Sports City’s factories are located in the Mactan Cebu Economic Zone, employ some 16,000 workers and at present manufactures for Adidas, Under Armour and Lululemon...

1.       Aid: Conversion of PhP 2,000 loan provided by Sports City into a grant and additional PhP 2,000 subsidy to workers. This will provide relief to workers who have become indebted due to the no work, no pay policy during the two-month lockdown...

2.       Safety committee...

3.       Production order: Commitment by Adidas to maintain production orders in Sports City to ensure jobs for workers... Workers...had been told that Adidas wants to relocate production to Cambodia allegedly because of less disruption due to covid...

4.       Freedom of association: The provision about Sports City respecting freedom of association in compliance with brand commitment has been deleted in the latest copy of the company rules and regulations... The statement of respect for FOA was previously included... Workers view this as a union busting maneuver by Sports City.

Read the full post here

Company non-response
8 June 2020

Under Armour did not respond

NGO rejoinder
19 April 2020

Labour group rejoinder calls on Sports City & its buyers to provide aid to 17,000 workers without jobs & pay during COVID-19 economic zone lockdown

Author: Partido Manggagawa

"Call to Sports City and its Customers to Provide Aid to Workers", 21 April 2020

Concerned workers of Sport City is calling on management and global brands to provide much needed aid to some 17,000 employees... suffering due to the no work, no pay scheme. Only a handful of workers are working as skeletal force...

Sport City factories... management gave 5 kilos of rice and a few pieces of canned goods. This was easily consumed in two or three days by workers and their families.

This is the only aid provided by the company. The other forms of so-called assistance are actually workers’ wages and benefit that are just advanced.

... [T]he Labor Department has closed its assistance for workers affected by the covid lockdown... [and] has repeatedly declared that its priority is small and medium enterprises, meaning those with less than 200 workers. It is almost a certainty that the 17,000 workers of Sports City will not be qualified. A new program, the Wage Subsidy for Small Business... has been opened but as is obvious from its name, Sports City workers will not be qualified as beneficiaries...

Sport City workers have survived only by taking out personal loans and severely restricting their consumption due to the lack of assistance...

Download the full document here

Company response
13 April 2020

lululemon's response

Author: lululemon

... We follow industry best practice guidance with regards to responsible sourcing practices... [which] includes honouring our purchasing agreements, as we continue to pay in full and with agreed upon payment terms for current orders...

A number of support measures have been put in place at [Sports City International facilities]... such as salary advancement, providing food support, and offering financial loans for employees. The supplier has applied for all workers to receive funds from the government financial support programme... A hotline has been implemented to respond to workers' grievances and concerns during the time of closure...

We will continue to closely monitor this situation...

[The full response is attached]

Download the full document here

Company response
13 April 2020

New Balance's response

Author: New Balance

... Due to the end of one of New Balance's largest football club sponsorships at the end of 2019, New Balance had been in the process of winding down our business relationship [with Sintex International (Sports City International)] and reducing orders over the period of several months, well before the COVID‐19 pandemic began. Only a small number of units now remain to be produced before the business relationship ends, which New Balance will continue to receive and pay for in full...

Sintex International has taken steps to support worker income during this period by providing salary advancement (releasing April's payroll early and providing the 13th month pay) and holiday pay, waiving social security deductions, providing food assistance and offering an employee assistance loan for those in need. New Balance also understands that Sintex International has applied for government social support... for workers, which at this time has not yet been approved as workers may not meet the prioritized criteria. Throughout this time, Sintex International has also informed New Balance that they are maintaining a hotline with workers to receive any questions and concerns...

[The full response is attached]

Download the full document here

Company response
12 April 2020

adidas' response

Author: adidas

... [T]he Department of Labor and Employment (DOLE) launched a P2-billion program providing financial assistance to workers affected by COVID-19. Under the DOLE program, qualified workers are to be provided a subsidy of P5,000.

The financial assistance applies to all workers, regardless of their employment status, whether they are ‘no work, no pay,’ contractual, or regular workers.

To help workers’ meet their daily needs during the lockdown, adidas’ suppliers operating in the Mactan Economic Zone brought forward monthly salary payments, provided a cash advance against planned end of year bonuses, and distributed basic food provisions to their employees.

They also applied for the government emergency relief funds for each worker, as per the DOLE directive. It should be noted that the factories are not fully closed. Safety measures are in place and workers are being offered limited work opportunities on a rotational basis.

Some workers have also requested, and received, paid annual leave. We continue to be closely engaged with our suppliers and the government agencies in Cebu to understand what additional measures can be taken to support the workers and their families...

[The full response is attached]

Download the full document here

30 March 2020

Philippines: Thousands of special economic zone workers without assistance from employers or govt. says labour group

Author: Partido Manggagawa

"Thousands of workers without aid from employers, gov't", 30 March 2020

Thousands of workers still have not received assistance from either their employers [or] the government... according to labor group Partido Manggagawa (PM).

"The no work, no pay policy is a recipe for hunger. We call on employers to grant quarantine subsidy to their workers and for the government to mandate companies to provide such assistance,"... PM and other group[s] are calling for P10,000 quarantine subsidy for formal workers affected by the covid pandemic.

Based in the groups monitoring of several factories in the ecozones of Cavite, majority have received not a single centavo of support since firms shuttered. A few received some assistance from their employers. However, all of the workers surveyed have not received the P5,000 CAMP subsidy from the Department of Labor and Employment (DOLE)...

A large car parts supplier in Cavite employing some 9,000 workers gave pro-rated 13th month pay to their workers... [T]hese companies in Mactan and Cavite applied for the CAMP from DOLE assistance but workers have not received the P5,000 subsidy...

"A survey of five factories in the Cavite ecozone revealed that all did not grant any assistance to their workers and also none have received any support from the DOLE. Four of these are garments factories while the last is a metal firm. In total, the five factories employs at least 2,000 workers. Eleven days into the lockdown, they all face increasing difficulties due to the lack of support."...

Read the full post here

29 March 2020

Philippines: Labour group calls on employers to grant paid quarantine to 100,000 workers affected by closure of Mactan Economic Zone

Author: Partido Manggagawa

"P10k quarantine pay for 100,000 laid off Mactan ecozone workers - labour group", Partido Manggagawa, 29 March 2020

The labor group Partido Manggagawa (PM) called on employers to grant paid quarantine of P10,000 per month to some 100,000 workers affected by the closure of Mactan ecozone as Lapu-Lapu City is locked down today. They join more 100,000 workers in the Cavite Economic Zone that shuttered a week earlier. "Foreign investors should shoulder temporary losses due to the covid pandemic," asserted Dennis Derige, PM-Cebu spokesperson.

"As far as we know locators in Mactan ecozone are throwing workers out of work without paid quarantine except for Fairchild Semiconductor (Philippines) Inc. which gave wages for the next 20 days that employees will be out of work. Even the giant garments conglomerate Sports City that supplies to Adidas, among other global brands, is refusing to give quarantine subsidy to some 17,000 employees and instead only gave a token 5 kilos of rice with some canned goods. The firm is also applying for the DOLE assistance for formal workers. This is a giant company that can very well afford to bear losses by granting quarantine subsidy."...

"Employers have benefited from recent economic growth without sharing the bounty with their workers. This was revealed in a Department of Finance study showing labor productivity grew by at least 50 percent, yet real wages were stagnant... Moreover, foreign investors in the ecozones enjoyed tax breaks and other privileges for years. Now that there is a crisis, employers are morally obliged not to pass on the burden to their hapless workers."...

Read the full post here