Overview:
The WRC recently documented violations of worker rights at the Guatemalan garment factory JNB Global, also known as Sams and Rudia. Following our investigation, we shared findings and recommendations for remedial action with the factory and with its buyer, Target Corporation.
The violations of worker rights at JNB Global occurred when the factory required workers to sign new employment contracts that illegally falsified their dates of hire. Further violations occurred when the factory fired workers who refused to sign. Unfortunately, JNB Global refused to fully remedy the violations and Target did not take appropriate action to compel its supplier to comply with requirements of Guatemalan law and its own Vendor Code of Conduct.
WRC Findings:
Workers reported to the WRC that, in November 2020, the company asked all of its employees to sign new employment contracts that would reset the length of their employment to zero. The company did not make clear to the workers the reason for its request, but workers told the WRC that they did not want to sign new contracts because, as a result, they would be denied benefits that they were owed on account of their length of service at the factory. Workers receive benefits such as days of vacation and accrued severance benefits based on their length of service.
Fearing retaliation, most of the factory employees agreed to sign the new contracts. However, some of the workers did not want to lose their accumulated seniority benefits, and they informed management that they would not sign.
These workers later told the WRC that management responded by threatening them with dismissal without payment of severance, violating Guatemalan law. One worker said that the human resources manager told workers, “If you do not sign [a new contract], we will fire you . . . If you don’t sign, be prepared for the consequences . . . I will do everything possible to make sure that you do not receive payment of severance.”
According to workers, these threats were enough to convince many of the workers who initially refused to sign a new contract to sign. However, when a small group of workers did not sign a new contract, JNB managers made good on their threats and, in February and March 2021, the factory fired all workers who had not yet agreed to sign a new contract. During the termination proceedings, the company refused to pay the severance the workers were owed.
The WRC conducted an investigation on behalf of seven workers who filed a complaint concerning the company’s illegal actions. The appropriate remedy for these illegal dismissals is reinstatement with full payment of back wages. However, the workers told the WRC that they were fearful of what would happen if they were to return to work at the factory and said that they did not want to return.
Therefore, the WRC recommended that the company make payment of back wages and pay all severance owed to the seven workers. Based on worker testimony, the WRC estimated that the seven workers were owed a total of approximately US$62,000. While the company initially made no payment of severance, it did eventually make some small payments, but the sum total paid to all workers was less than US$4,000.
After the WRC shared the results of the investigation, Target replied that it conducted its own investigation of these violations, but, despite detailed reports from the WRC on the dismissals and the amounts of severance and back wages still owed to workers, Target claimed that the factory had fully remedied the violations.
JNB Global committed a clear violation of Guatemalan law by not only falsifying information on workers’ contracts but also by illegally dismissing the workers who refused to sign the illegal contracts. In order to remedy the violations, Target must ensure that its supplier factory reissue employment contracts to all employees based on their original dates of hire. Furthermore, the brand should ensure that the dismissed workers are paid the approximately US$58,000 they are owed in back wages and severance.