Alongside with the Hong Kong Confederation of Trade Unions and Global Monitor, WE had issued a joint letter to the Hong Kong-based international apparel giant, Global Brands Group (GBG), regarding the shameless act of sudden closure of one of its main supplier factories in El Salvador, resulting in the arrears of wages, severance and benefits of 824 garment workers.
Hundreds of workers and their families, caught off guard by the sudden closure, are financially precarious due to the irresponsible acts of GBG’s supplier. We demand the Global Brands Group to take up the responsibilities and provide workers with their legally-owed amount. Read the full letter below:
Dear Mr Bruce Philip Rockowitz,
We, the undersigned organisations are Hong Kong-based labour organisations.
We are contacting you regarding your sourcing relationship with the L.D. El Salvador S.A. de C.V. factory (LD) in El Salvador, as we have recently learned severe severance violations undertaken as part of the factory’s closure. Global Brands Group (GBG) maintained an important sourcing relationship with LD and was one of LD’s largest buyers in the period leading to its sudden shut down on March 7th of this year. This special relationship leaves you with obligations to the workers who produce apparel at LD and a responsibility to ensure the factory operated within the confines of Salvadoran law. Due to this, we urge you to take the necessary steps to ensure former LD workers receive all outstanding wages, severance payments, and terminal benefits.
As you are aware, in the wake of the LD factory’s closure earlier this year, the owner of LD, Jyung Ryoloo Kim, refused to pay workers two weeks of outstanding wages, legally-mandated severance payments, and other terminal benefits totaling $2.3 Million USD. To avoid paying workers what they are owed, Kim went so far as to flee El Salvador, abandoning all responsibility to ensure the implementation of the law and the just compensation of his workers. This failure to meet outstanding financial obligations is negatively impacting the 824 former workers of LD, who are owed an average of $2800 (USD) under Salvadoran law.
More than 7 months after the closure of LD, workers have not received the severance, wages, and terminal benefits owed to them. This is a heavy burden for the workers to bear due to the lack of unemployment benefits available to garment workers in El Salvador. LD workers were relying on severance payments legally-owed to them to support themselves and their families until they were able to find new work. The unwillingness to meet outstanding obligations has left these workers in a financially dangerous position.
In situations where a factory owner fails to meet severance obligations after a closure, it is typical, and many buyer codes of conduct require, for brands sourcing from the factory to ensure compliance with national law, including paying all legally-mandated severance. Unfortunately, GBG is choosing to disregard this responsibility to the workers that made GBG apparel and has instead offered workers a one-time “humanitarian” payment of $300,000 USD, while expressly denying any further commitments.
This payment, which represents a fraction of what the workers are owed, is far from a remediation of the outstanding owed severance. This is especially true considering that GBG is a corporation with revenues of billions of dollars and could easily cover the full sum owed to workers. In fact, the sum owed to the works amounts to less than 1% of GBG’s 2017 revenues and of GBG Chairman William Fung’s net worth. More so, the payment represents a portion of what the workers are owed for their labor and is by no means an act of “humanitarian” charity on the part of GBG.
As an important brand sourcing from LD, we encourage you to justly compensate workers and meet your legally-required severance obligations. We urge you to do this by covering the $2.3 Million USD owed to LD workers in its entirety, as any solution proposed by GBG that does not cover this full amount will not be considered a comprehensive solution to this problem.
To assure a workers are compensated in a timely fashion, we request that you inform us of your plan to pay-out remaining severance no later than 19 Nov 2018. Thank you for your continued attention to this issue. We look forward to your response.
Hong Kong Confederation of Trade Unions