Indonesia: Former Jaba Garmindo garment workers continue to demand unpaid severance after 2015 factory closure; incl. company responses
In April 2015, the Jaba Garmindo garment factory in Indonesia, which supplied to global brands including UNIQLO, s. Oliver and Jack Wolfskin, closed down without paying its mostly women workforce their legally owed severance, as well as several months wages. Just two months before, the factory went bankrupt, after buyers allegedly pulled orders from the factory. Approximately 2,000 workers affected by the factory’s bankruptcy continue to demand the US$5.5 million in severance owed to them under Indonesian law and, along with labour groups, call on the buyers to take responsibility and pay them their legally owed compensation.
In April 2019, Business & Human Rights Resource Centre (BHRRC) invited Jack Wolfskin, Blackstone Group (which owns Jack Wolfskin) and Fast Retailing (UNIQLO) to respond. Blackstone said it no longer has any investment in Jack Wolfskin. Jack Wolfskin responded that it had renumerated the workers through a fund it set up with the help of the factory union. Fast Retailing referred to statements on its website in which it confirms its commitment to continue dialogue with trade union representatives to help facilitate re-employment for former Jaba Garmindo employees who remain without employment. In statements and its response to BHRRC, Fast Retailing has said it exited the factory in October 2014, and had settled all payments for orders up to that date. It further stated it had no legal obligation to financially compensate the Jaba Garmindo workers, but empathised with the workers involved, and offered to facilitate the re-employment of workers who remained unemployed.
However, labour groups and the Jaba Garmindo union say UNIQLO’s offer of re-employment is inadequate and lacks information on the number of workers that would be re-employed and the location of the new factory. Further, they say there can be no discussion of re-employment without recognition that they are still owed US$5.5 million.
In October 2019, Clean Clothes Campaign and the FSPMI labour union filed a complaint to the Fair Labor Association (FLA) against Fast Retailing and s. Oliver for, as affiliated FLA brands, violating FLA’s Workplace Code of Conduct and its “Principles of Fair Labor and Responsible sourcing”. In July 2021, the FLA published the findings from its investigation, and concluded that Uniqlo and s. Oliver were not responsible for the Jaba Garmindo bankruptcy, but recommended they, along with the eighteen other brands that sourced from Jaba Garmindo, provide financial relief to the workers.
In April 2022, Business & Human Rights Resource Centre invited UNIQLO & s.Oliver to respond to an open letter written by Jaba Garmindo workers, which referenced the FLA's recommendation and called on the brands to pay workers their owed severance. UNIQLO said the FLA report concluded that UNIQLO had no obligation to financially compensate the Jaba Garmindo workers. s.Oliver said it had been in contact with FLA and Fair Wear Foundation to discuss the process for contributing towards a relief fund for the workers .
In May 2022 we received a rejoinder from Clean Clothes Campaign, which argued the FLA report had recommended the brands come together to provide financial relief to the former Jaba Garmindo workers, and that according to the report, UNIQLO and s.Oliver were the dominant buyers of the factory. The rejoinder also argues that both brands failed in their due diligence requirements, as set out in the UN Guiding Principles on Business and Human Rights, to take measures to prevent, mitigate, and remediate the risk of severance theft, and that a lack of liability for the factory does not absolve UNIQLO or s.Oliver’s responsibility towards the workers. The rejoinder can be found below.