final report of labor audit, in factory chi fung. sa de cv professional

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FINAL REPORT OF LABOR AUDIT, IN FACTORY CHI FUNG. S. A. DE C.V.
PROFESSIONAL TEAM
1. JUAN JOSE ZALDAÑA LINARES – ATTORNEY AND NOTARY
LEADER TEAM
2. MANUEL ALFREDO CORLETO AREVALO – AUDITOR
3. ROSA HAYDEE DELGADO – BUSINESS ADMINISTRATOR
4. ANA LINDA MICHELLE DE PORTILLO – ATTORNEY
5. STEFANNIE LUCRECIA CHACON - PSYCHOLOGIST
6. WALTER ALBERTO ZALDAÑA – CIVIL ENGINEER
AUDIT PERIOD
FEBRUARY 26 TO MARCH 18, 2010
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CONTENTS
 INTRODUCTION
 RESEARCH DESIGN
o INTEGRATION OF TEAM
o DESIGN METHODOLOGY AND TOOLS OF RESEARCH.
o PROGRAMMING FACTORY TOUR
 RESULTS OF RESEARCH
o ANALYSIS OF INCOME AND OTHER RECORDS LABOR ISSUES
o ANALYSIS OF CONDITIONS OF SAFETY AND INDUSTRIAL HYGIENE
o ANALISYSIS OF INTERVIEW
 CONCLUSIONS
o GENERAL CONCLUSIONS
o SPECIFIC CONCLUSIONS
 RECOMMENDATIONS
o TO THE STATE OF EL SALVADOR
o TO THE MINISTRY OF LABOR AND WELFARE
o TO EMPLOYERS OF THE INDUSTRY MAQUILA
o TO THE PRESTIGE BRANDS INTERNATIONAL
ANNEXES
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COMPANY DATA
Name:
CHIFUNG, S.A. DE C.V.
Tax identification number (NIT):
0514-290592-102-0
Social Security number (ISSS):
701921273
Adress:
Km. 12.5 Carretera Troncal del Norte.
City:
Apopa.
Deparment:
San Salvador.
Country:
El Salvador.
Phone:
22140-9000
Telefax:
2214-6056
Company adress:
Km. 12.5 Carretera Troncal del Norte.
Activity Economic:
Textil Industry (in accordance with payroll of
AFP) and Maquila (in accordance with payroll
of ISSS).
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 INTRODUCTION
Every company, at certain moments of its existence, will be affected by some kind of
crisis. In those circumstances will be strengthened which is able to overcome it, the
rest will perish or be extremely difficult to survive.
In times of financial and economic crisis, businesses, particularly its owners and
managers must demonstrate their ability to overcome the difficult situation, of course
this means using lots of creativity and based on respect for human rights of workers
and labor legislation.
Latin American companies often are forced to develop their operations face many
hardships, some of them derived from economic decisions taken by successive
governments, which are bad adaptations of the experiences of other countries
wrongly applied to the environments of each country.
Being in crisis is a state that companies must be willing to take. Trying to survive the
crisis and find out what to do, is a forced decision to not affect the next time the
same way.
 RESEARCH DESIGN
o INTEGRATION TEAM
The research team Chi Fung, joined as follows:
-
Two lawyers (including the Team Leader)
-
An Auditor
-
A Business Administrator
-
A Civil Engineer
-
A Psychologist
Each in his specialty suggested strategies to follow to obtain information that would be
discussed later, which led us to perform actions, including review of payroll and
production records and physical observation of the production facilities the factory.
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o DESIGN OF METHODOLOGIES AND RESEARCH TOOLS
The Auditor and Business Administrator limited their research to verify the wage records
and inquire some unusual aspects considered in the process of payment and discounts
that they make to workers. Details of the administrative investigation are attached to this
report
Civil Engineer conducted an inspection of the plant in order to investigate aspects of
industrial hygiene and safety. The result of his work is also added in this report.
Lawyers and Psychologist concentrated their efforts on interviews with 80 workers and
former workers of the factory, 30 of them outside the premises. Everything related to the
results of the interviews are discussed in the conclusions.
o SCHEDULING VISITS
Factory visits were constant for some members of the team from 26th February to 12th
March 2010. After this date, the team worked in the city of Santa Ana, analyzing and
integrating information in this report. The Head of the team made some visits to the
factory to investigate some aspects with the management of it.
A final visit to the factory, took place on Wednesday March 17 date on which they
released a preliminary report of the audit.
 RESULTS OF RESEARCH
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PRELIMINARY COMMENTS
The factory management provided all the requested documentation, but on the second
day of investigation, the factory manager said to the team leader that any activity that
involved tour the factory premises in all areas, had to be accompanied by some person
executive staff member of the factory, therefore it meant that would not be allowed free
movement of the research team
Importantly, the executives did not like the fact cards provide the team leader to the
workers. Moreover, the interviews only could be conducted only during periods of
recess, for that reason the first day we interviewed the first group in the dining room,
which gave conditions to supervisors and managers to stay nearby, using the pretext of
ensure order
The following interviews were conducted in a room of the factory managers provided for
the team was installed to work. Other interviews were conducted outside the factory
premises in two nearby malls.
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o ANALYSIS OF INCOME AND OTHER RECORDS LABOR ISSUES
A. Consideration of evidence: the view were taken for analysis of pre
production schedules developed and pay slips, signed by employees as
payment of their salaries, in addition, personnel records, payroll and AFP
ISSS (pension fund managers), and reports of marking entrances and
exits of personnel.
B. Period: The wage schedules examined, correspond to the period 2006 to
2010 the production area.
C. Minimum wage: All workers of different production units of the department
assigned to them, both in the pre made templates as pay slips, the
minimum wage, according to the following table:
Period
Current minimum wage (daily)
January 2006 =August 2006
5.04
September 2006 = Julio 2007
5.24
July 2007 = June 2008
5.40
June 2008 = December 2008
5.57
January 2009 = February 2010
5.79
D) Determination of value per hour in relation to the minimum wage:
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ANALYSIS OF WAGES
SALARY ANALYSIS OF PRODUCTION WORKERS (Expressed in U.S. $)
VALUE
VALUE SALARY
No.
NOMINAL
VALUE
HOURS
SALARY
PER HOUR
DAILY
HOURS
VALUE
PER
SALARY FOR
ORD. X
REAL
EXTRA
YEAR MONTH
SALARY
DAILY
HOUR
WAGE
WEEK
PER
HOUR
DAYTIME NIGTHTIME
Jan.2006 Ago.
$5.04
8
$0.63000 $70.56
$35.28
44
$0.8018 $1.26
$1.575
Sep.2006 Dec.
$5.24
8
$0.65500 $73.36
$36.68
44
$0.8336 $1.31
$1.640
Jan.2007 nov.
$5.24
8
$0.65500 $73.36
$36.68
44
$0.8336 $1.31
$1.640
Nov.2007 Dec.
$5.40
8
$0.67500 $75.60
$37.80
44
$0.8590 $1.35
$1.690
Jan.2008 Jun.
$5.40
8
$0.67500 $75.60
$37.80
44
$0.8590 $1.35
$1.690
Jun.2008 Dec.
$5.57
8
$0.69600 $77.98
$38.99
44
$0.8861 $1.39
$1.740
2009 Dec.
$5.79
8
$0.72375 $81.06
$40.53
44
$0.9211 $1.45
$1.810
Ene.2010 Feb.
$5.79
8
$0.72375 $81.06
$40.53
44
$0.9211 $1.45
$1.810
14 DAYS
WEEK
Jan.-
Notes: All the production staff earn the same salary
The calculation does not include legal benefits like end year bonuses, vacation, allowances,
bonuses and others benefits.
E) Review of personnel records: We performed tests of the production
personnel records, and verified compliance with legal and formal
requirements of the recruitment. Within these records are the following
documents:
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PERSONNEL FILE (sample)
General Tab of Human Resources division
Employment contract.
Employment Application
Date monitoring of compensation
Sheet commitments (work by choice)
Sheet update personal data
Solvency of the National Civil Police
Compensation constancy
Waiver sheet at the conclusion of a year of work to justify the compensation (official
paper of the Ministry of Labor and Social Welfare).
Sheet prior work record and recommendation.
Record of the employee medical consultation
Proof of medical consultation for their children.
Proof of absence on grounds of involvement in the school for their children.
Proof of Disability ISSS.
Written reprimand for missing work without permission
Record to appear as a juror
Summary NIKE code of conduct, signed by the worker
General policies of the company, signed by the worker.
Note: The personnel records contain relevant information worker
F) Wage verification: crosses were made prior information between forms and
payment vouchers, no differences were found between vouchers
The pay slips are printed signatures of the workers. We determined a pay slip
unsigned for a worker, during the period of January 29, 2009 to February 11,
2009.
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The payroll processing system, payment vouchers and report marking
entrances and exits of personnel, are effected by magnetic means, are
attached to illustrate the tables numbers: 1, 9, 10, 11, 12 Y13
G) Assist Control: The entrance and Outs of staff, are held on magnetic media,
by sliding the card to the employee by the device, generating the report for
processing payroll and other personnel actions.
H) Discounts: We examined the labor quotas provided by the workers to the
regime of ISSS and AFP, and checked the calculations regarding payrolls.
it was verified the payment to ISSS and AFP, noting that during the period
under review have been paid within these forms correctly, see Table No. 5
In the analysis of the forms of salary we determined under "Other deductions"
and by its importance, we made more thorough examination, was conducted to
verify the contents. We found in some cases lack of compliance with the legal
rules relating to deductions from wages.
The following are three examples of payment discount tickets:
i) slips from January 29, 2009 to February 11, 2009
Worker Name: Worker 1
Income
Discounts
Value received
$
81.06
81.05
0.01
Details of discounts:
ISSS
2.43
AFP
5.07
Agricultural Bank Loan
22.64
Metropolitan Credit Loan Fund
14.13
The Know Bookstore
17.56
Medicine
4.59
Medicine
4.63
Savings Plan
10.00
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Pay Ballot February 12, 2009 to February 25, 2009
Worker Name: Worker 1
Income
Discounts
Value received
Details of discounts:
ISSS
AFP
Agricultural Bank Loan
Metropolitan Credit Loan Fund
The Know Bookstore
Medicine
Savings Plan
81.06
81.05
0.01
2.43
5.07
22.64
14.13
12.98
13.80
10.00
Pay Ballot February 12, 2009 to February 25, 2009
Worker Name: Worker 2
Income
Discounts
Value received
Details of discounts:
ISSS
AFP
Workers Bank Loan
Loan Savings Plan
Loan Savings Plan
Savings Plan Loan
The Know Bookstore
Savings Plan
74.55
73.88
0.67
2.23
4.66
19.31
13.59
11.55
2.50
15.04
5.00
More details of discounts, in frames numbers: 4, 14, 15 and 16
The slips were cases of discounts and other working tools such as:
Payslip of January 29, 2009 to February 11, 2009:
Worker 3: A measuring tape.
Worker 4: A card.
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I)
Staff turnover: Staff turnover is illustrated in Table No. 2.
REVIEW OF SEVERANCE, BONUS, VACATION, PAYMENT ISSS, AFP, overtime and other
employee benefits.
A) Consideration of proof: We checked sheets bonuses, vacation allowances, ISSS, AFP,
salary and wage slips.
B) Period: 2006, 2007, 2008, 2009, January and February 2010.
C) Bonus: The bonuses are paid on separate sheets of any fee and are signed directly by
the worker.
Calculations were reviewed and checked some cases taking into account their age and
legal payment date, there were no inconsistencies.
D) Holidays and compensation: The policy established by the company is to compensate
staff, at the end of each year working on their date of admission, while recognizing the
annual leave. We checked the calculations and applications in the dates.
See tables numbers: 3, 17 and 18.
E) Payment of payroll of the ISSS an AFP: He is considered the employer contribution
ISSS, INSAFORP and AFP. The payments were made in the relevant period. Workers
are not discovered these benefits.
F) Overtime: We passed information between markings reports entrances and exits, the
payroll wage and salary receipts, there were no errors of calculation and application.
Importantly, as described by some workers interviewed, they often have been laboring
after normal working hours and checking out one or two hours of 5 pm, but those extra
hours are not reflected in the report, consequently they are not paid. They argue that
remain after normal working hours, to "advance work"
Regarding overtime that reflected in the payroll and vouchers, there is a supporting
document signed by the worker, where they establishing the number of overtime worked
and the voluntary for do it.
To illustrate the tables are numbers: 6, 7 and 8 show the summary of overtime day and
night, and the number of personnel assigned by the department.
G) They argue that remain after normal working hours, to "carry out their work"
Regarding overtime reflected in the vouchers, there are supporting document signed by
the employee, which establishes the number of overtime worked and voluntarism
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expressed.
For illustration shows the tables numbers: 6, 7 and 8 show the summary of overtime day
and night, and the number of personnel assigned by the department.
H) Other benefits:
i)
ii)
iii)
iv)
v)
vi)
vii)
Savings system: The company coordinates a system of savings, cooperative type (not
legalized) in which workers contribute biweekly contributions to the pool. Of these
funds are low rate loans made to those workers participating in the system, with an
interest rate of 10% per year, these loans are discounted to the payroll of salary,
contributions to term.
According to the company manager, at the end of each year the savings are reimbursed
to employees.
Food: There is no direct subsidy to the power of workers during the working day but the
people who provide food to workers, the company provides local, free water and
electricity, in order to the value of food more affordable.
Business Clinic: There is within the premises of the company, a corporate clinic provides
first aid services.
Medicines: There are agreements between the company and pharmacies to provide
medicine to workers; These medicines are paid by the employee contributions to
term and are discounted in return.
School Supplies: There are agreements between the company and library, to provide
school supplies for children of workers. The value will pay the employee for
contributions to term and are discounted in return.
Bonus: There are subsidies in small amounts, awarded for meeting certain goals or
others.
VERIFICATION OF WORKERS IN THE PRODUCTION LINE OF THE COMPANY.
Production lines: The Company currently has twelve production lines in the engine department.
The production lines are not a constant number, because these are assigned according to the
styles and processes of each model made.
The line ranges vary between 30 and 50 workers, but sometimes they are small cells.
Departments or units of production: The production is organized in several departments, as
illustrated by the table number 7.
SAMPLING PRODUCTION GOALS, CALCULATION AND APPLICATION
A) Consideration of proof: We tested several styles of replica NFL regarding time allocated by
machine / man, and the corresponding production goals, as well as variance
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Reports produced PARTEX units.
B) Period: We analyzed the years 2006, 2007 and 2008, because according to the statement by
the manager, the company produces PARTEX since May 2008.
C) Production Goals: The goals of production is calculated based on the "RATE", ie the
measurement of time of each style is produced. This time study, the goal is determined daily
operation, see Tables Nos. 19, 20 and 21.
We analyzed three styles replica NFL and calculated values of direct labor (only the department
of machinery), as shown in the table numbers: 22, 23 and 24.
D) Efficiency Goals: The goals of efficiency could not be verified, because these are deleted
from the system and do not keep records.
E) produced NFL PARTEX Replies: We analyzed the production of replicas NFL in terms of
units entered, produced and exported, as well as production periods according to box number:
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F) Application of payment: The wage system adopted by the company is "a day" would require
further examination to determine the unit cost for each of the styles produced.
ASSESSMENT AND VERIFICATION OF RECORDS OF WAGES FOR THE THIRD AND
FOURTH QUARTER OF 2009.
A) Verification of records: We examined payroll records for the relevant period to 02 of July
2009, until December 30, 2009, the summary of the period are presented in Table
numbers: 6 and 7
B) Evaluation: The records are in order, and its calculation and application, the important
thing to note is the amount of overtime work during the period. Monitor box number 6.
GENERAL CONSIDERATIONS ON THE ADMINISTRATION OF THE COMPANY.
Administrative records reviewed in this review and for the period under study, such as payroll of
wages, employment benefits, attendance controls, personnel records, labor contracts and
others, are in proper order, and the administration gave them all facilities for review.
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MAJOR FINDINGS:
The most significant findings identified during the audit conducted at the company
administrative Chi Fung, S. A. C. V., in the period 2006 = 2010, can be summarized in
the following aspects:
A) Overtime: Regarding overtime, we find a serious contradiction between the
statements made by some workers and the system of clock´s marking that the company
has, since when they are working to "Advancing the Production", these hours are not
reflected in the marking report that provides the basis for payroll the overtime.
But having reviewed the documents and found no irregularities, we have some
comments that raise doubts that the system of payment of overtime is efficient,
according to the following versions:
i. Version of the Workers: The interviewees stated that they are
laboring after regular working hours "work ahead for the next day"
and / or to meet the production target required by the company,
marking the exit after completing the overtime. Workers, mark only
one time their departure, which means that these extra hours of
work performed should appear in the report of overtime, which does
not happen.
ii. Company´s Manager Version: The manager of the company,
indicates they do the selection of the people they need to work
overtime, those workers sign a document which they express
willingness to do so. The staff that is authorized to work overtime,
check off his exit at the end of overtime. Expresses also, that they
will pay overtime only for staff that they are selected and that the
overtime is approved using a process that enables to the time´s
clock software, to recognize the overtime to staff who have been
authorized to it. In the case of a staff who is working to catch up on
work and / or achieve production targets, they are not allowed to
collect overtime because they do not stay as requested by the
company but on their own initiative.
Inconsistencies.
• Employees who are authorized to work overtime have a report
from those hours and of course we could verify the payment in the
payroll of salary and payment vouchers. This does not happen with
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the workers that "advance work" or are working to achieve
production targets.
• The regular departure time is at 5 pm. Monday to Thursday and
on Friday it works until 4 pm, but when somebody works overtime,
the report show the entrance simultaneously at 5 pm. The exit of
overtime varies from one employee to another.
iii. version of the owner. The time clock is programmed, using
software so that all staff checks their entry at 7 am and leaving at 5
pm. or 4 pm, the ordinary working day, depending on the day.
Inconsistencies
• Reports of markings indicate that the clock isn´t programmed for a
specific period of time, because personal entries appear before 7
am and after 8 pm. Clearly the clock programming can be altered
according with the convenience of the company.
General Conclusion
The control system and payment of overtime is controlled by the
company, so that software can be programmed so that through a
process, some workers are paid overtime and not others.
B) Discounts on worksheets: not respected legal discount rates in payroll, going beyond the
20% and in some cases to workers, is deducted up to 99.9% of their salary. Table no. 15
presents one case of discounts, in which the worker (a): Jessica Beatriz Chamul, received a
penny (0.01), for thirteen (13) catorcenas of 2009, and received wages for all By 2009, the
numbers of: 04/100 twenty-three Three hundred dollars (323.04).
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Also, the analysis of the relationship of discounts on revenue in the second half of 2009, shows
high overall percentages, according to this table
Year 2009
Period
02-07/15-07
Total
Salaries
47,891.28
Total
deductions
11,930.72
24%
16/07/29-07
52,217.57
9,692.40
18%
30-07/29-07
46,445.78
11,249.48
24%
13-08/26-08
51,648.41
11,818.62
22%
27-08/09-09
47,161.43
10,953.79
23%
10-09/23-09
49,970.59
11,940.48
23%
24-09/07-10
47,375.68
10,906.77
23%
08-10/21-10
52,493.88
12,023.34
22%
22-10/04-11
50,850.85
12,900.17
22%
19-11/02-12
58,149.61
9,375.40
16%
03-12/16-12
62,178.49
7,571.74
12%
17-12/30-12
57,911.00
3,895.72
6%
Relation
Disc. / wages
C) Savings System: There is no government watchdog agency assigned to oversee the savings
plan.
D) Output PARTEX: According to records provided by the company, production PARTEX NFL
replica, completed in the month of May 2008.
E) Unit Production Cost: To determine the unit production cost of the replicas NFL requires a
more extensive review that includes the unit cost of each department involved in the process
and other indirect costs, but the data daily goal has been to approximate a value of unit cost of
direct labor department machines, ranging between $ 0.31 and $0.33 (U.S. cents) per piece.
Also on "28 workers who produce 2.300 t-shirts a day" is distorted, in studies of time and setting
daily goals, that to produce a replica "PATRIOTS" it takes 43 machine / man per day, to
produce an estimated average 500 to 600 pieces per day.
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ANALYSIS OF CONDITIONS OF SAFETY AND INDUSTRIAL HYGIENE
PHOTO DOCUMENTATION
In a visit to the factory premises CHIFUNG SA DE CV, is located in the Municipality of
Apopa, Department of San Salvador on Monday 1th March, two thousand ten, from ten
hours and fifteen minutes in the morning, photographic information was collected.
The photographs show an alarming lack of industrial safety in the production plant of the
Chi Fung factory, which affects health and increases risks.
On the way, on a wall located near the entrance to the human resources office, found a
statement by ADIDAS GROUP aimed at workers which reads as follows:
“You may remember seeing on the
walls of this factory, posters explaining
the basic rules of work safety an
occupational health and environmental
protection to be followed by
factories….These panels have been
removed because we expect our,
partners protect your rights with trade
policies and measures…”
“…we hope that the management of the
factory complies with all laws and
regulations and to offer fair treatment to
employees and value their contribution
to the factory and our company…it will
help management to further
improvements in its workplace and offer
the necessary training to perform their
work safely.
In analyzing the content of these paragraphs, we conclude that the staff of factory
management FUNG CHI has omitted the previous regulatory compliance. Below is the
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photographic detail of electrical hazards, which can be sources of heating cables,
electric arcs, sparks, etc.
 The picture shows that there is training new staff, and the lack of protection for
the connectors that are less than 1 foot from their heads.
Connector in poor condition.
19
 In the following photos we can look the lack of maintenance within the factory,
and how the workers do not realize the risk they are manipulating the wires and
in some cases they make the repair the wires..


 plugs into disrepair
20
21
The picture shows some exposed wires and placed in a haphazard manner. The
workers dispose all the connectors for do not interfere in their working place, not
realizing that can cause an accident.
22
 In both pictures we see that the connector wires are fastened with cords of fabric,
this can cause a fire.
23
 Electrical connectors near water containers, which represents a serious risk.
\
24
 It must protect the cables that are exposed above the high voltage board.
Bad wiring
25
Using homemade equipment, they can produce heat by overuse.
There are several bottles of water near the connectors, the connectors also are not
adequate and are in poor condition.
26
 The workers ignored the preventive placards, we can look that only one worker
uses the mask, in an area where you need to use it.
 During the tour, all fan were not working and the interior was too hot.
27
 Wires in poor condition.
28
 Lack of protection in electrical box on wall .
 Flooring in poor condition, which can cause accidents.
29
 This ignition switch is located in the men's room, if someone plays with wet hands
this box without protection can cause electrical shock.
 Apparently some smoke detectors are not working but could not be verified it
because employees don´t know about it.
30
 Many of the connectors that are around the lamps are damaged, and the workers
take the cables tying them with strings of cloth, taking the risk of fire or cause it to
break a lamp by the disorderly way in which are located electrical cables.
31
INTERVIEW ANALYSIS
Most of the interviewers in the factory told us that they are afraid of loose their jobs if
they talk about the situation that is why they asked us to protect their identity, also they
required help in case they get fire.
 CONCLUSIONS
When the investigation process was finished in Chi Fung, the result was many general
and specific conclusions which are related to key points of the workers’ complains.
o GENERAL CONCLUSIONS
According with the workers who were interviewed, the factory Chi Fung has
violated many Labor Rights such as: The right to meaningful work; to safe and
healthful conditions of work; to pay sufficient to endure a life of human dignity for
a worker and his or her family; to form and join labor organizations; and to
participate in the workplace decisions affecting their lives.
It was established that these workers are not provided them with adequate
technical assistance.
The Ministry of Labour and Social Welfare do not play an active role when the
right of the workers is being violated by their employer, either on other similar
cases in El Salvador. It is important to mention that the Ministry of Labour and
Social Welfare does not apply the labor laws and the international labor
agreements ratified by El Salvador.
The case of the Maquila Chi Fung exposes the violation of labor rights, as well as
the fragility of the economic model in the maquilas is looking for a solution to
unemployment.
The different Public Institutions have played a passive role at the time the
workers have been trying to defend their workplace human rights by delaying the
suits filed against the factory Chi Fung.
The maquiladora industry in El Salvador has been violating the right of the
employees by denying their right of association. Moreover, the right to organize is
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establishes in the Labor Code those Corporations are treating works all over the
country, the employees believe that if they attempts to create a Union they could
get fired. However, there is some kind of corruption among some Labor Union in
El Salvador.
Solidarity trade union but has been reflected in various ways both nationally and
internationally, has not been enough for the government of El Salvador publicly
acknowledge their responsibility for human rights violations that occur Labour
inside the maquilas, or shows signs of adjustment to its policy of creating jobs.
All this makes clear that in El Salvador, labor laws allow them to deliberately
violate labor rights.
o SPECIFICS CONCLUSION
1) FORCED WORK. NO PAY OVERTIME:
80% of workers stated that in overtime, including from 5:00 to 7:00 pm, they were
forced to work in order to meet production goals. That the two daily overtime
were not paid. 70% of workers (s) interviewed said they were not paid overtime
even though the forms appear.
The research team checked the records of overtime and found that the time clock
inputs and outputs of the working days, reports it the overtime worked by staff
that is authorized by the company. The time clock is linked to software that is
administered by the Human Resources Department; they introduce the
information about the personal that will work overtime, so the clock´s report
reflects those hours. It is a reality that people who work additional hours without
the approval of Human Resources, don´t receive salary and there are no reports
of these hours, simply because the clock does not recognize it.
Despite the risk involved, there are workers who are willing to testify under oath
before national and international legal bodies, which have long been forced to
work overtime without pay.
2) INCENTIVES:
Worker (s), (100% of respondents) declared that they were not given incentives
to meet the goals (production bonus).
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3) HARASSMENT AND ABUSE BY SUPERVISORY STAFF
100% of those interviewed said that the staff of supervisors harassed and
humiliated, subjected to outrageous treatment. With an emphasis on those who
practice the leadership of this group. The same percentage mentioned above,
states that the person who serves as Chief of supervisors is designated as the
one that tramples on the dignity of workers. The workers claim that the chief of
supervisors forced them work overtime, which are not paid and with this
requirement is intended to force them to meet production goals.
100% said the factory owners do not harass or use the sound system to treat
them badly. Those executives do not attract attention as disrespectful and rarely
talk to them.
4) VACATION AND HOLYDAYS:
60% of workers (is) said they were forced to replace the vacation time. Whether
working overtime prior to or after the holiday period. They say that the same is
required in the days of rest established by law (mandatory). This could not be
confirmed in documents of the employer, such as time records, payroll and
production records before and after holiday periods and major holiday such as
Easter and Christmas in August.
5) RESTROOMS:
70% of respondents stated that the bathrooms of the factory are usually dirty and
in poor operating conditions. The research team confirmed this during a tour of
the factory and documented with photographs.
80% said they would only give them a roll of toilet paper a week, which is
insufficient for their physiological needs.
100% said that in the bathrooms there is no soap, only water.
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Extremely dirty inside women´s restrooms
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Extremely dirty inside women´s restrooms
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Extremely dirty inside men´s restrooms
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Dangerous box electrical inside the restrooms
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Dirty floor, all the time
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6) SURVEILLANCE CAMERAS:
80% confirmed the existence of security cameras on the premises, including the
entrances to the bathrooms.
7) INFLUENCE IN THE INTERVIEWS:
60% of respondents in the meeting room, said human resources personnel are
instructed to say in advance about the interview.
8) INTERVIEW WITH SUPERVISION STAFF:
Three supervisors were interviewed, including the head of that group. It is striking
that said they had been able to achieve higher production, but have never
received training in other important aspects like labor rights, human rights,
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human relations. They believe that to work, vacation and severance pay, an
incentive for workers and require them to recognize that production workers and
constantly threaten that they will lose their jobs. Supervisors have expressed that
as production targets and receive overtime pay to achieve them
9) DON´T EXIST SALARY PROTECTION:
It was confirmed that disrespects the maximum percentage reduction in salary
allowed by law, which is 20%. Management said the Ministry of Labour has not
made any comments.
10) SAVINGS PLAN:
With a savings plan, attract funds without authorization, or own regulatory.
Management stated that the Ministry of Labor has not expressed any opposition.
11) FORMS OF LABOUR RECRUITMENT:
100% of workers are employed for a definite term (annual), yet their activities are
of a permanent nature. The General Manager stated that they don´t have labor
liabilities, they compensated annually to the workers, in addition the Ministry of
Labor’s inspectors never have objected to this form and they said them that if
they change contracts indefinitely, can´t compensated annually to the workers.
In addition, 100% of respondents said that when they was hired first time, the
managers told they about the company's policies, but they didn´t know the code
of conduct of the brands for which Chi Fung produce and their records have
many of these documents that were signed, but they have done to keep their
jobs.
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12) SAFETY INDUSTRIAL:
By physical inspection of the plant facilities, it was found that there are serious
violations of safety and industrial hygiene, which are illustrated with photographs
and comments from them.
 RECOMENDATIONS.
o GENERALS RECOMENDATIONS:
Recommendations for the Government of El Salvador
1-
All maquila industry set in Salvadoran territory has to create an economic
fund, which will be sufficient to guarantee the employees’ benefices,
established at Article 447 of the Code of Commerce.
2-
To verify compliance with the Law Primary, Secondary and International in
relation to compliance with labor rights.
3-
The Government has to create a special commission to monitor
compliance and implementation of ILO conventions ratified by El Salvador.
Recommendations for Ministry of Labour and Social Welfare
a. The Ministry has to fulfill with the task of guaranteeing the defense of
workplace human rights.
b. The Ministry has to take an active and leading role in the defense of
workplace human rights through objective inspections to verify working
conditions.
c. The Ministry has to establish mechanisms for direct communication with
workers, in order to guarantee the opportunity to be heard.
d. The Ministry should develop ongoing training processes certified by
international bodies that ensure respect for workplace human rights,
aimed at employers and employer representatives, workers and union
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representatives, on rules and procedures that help to improve the work
culture, avoiding discrimination reasons of organization and free
association.
e. The Ministry must ensure that employers, employer representatives,
workers and workers representing unions, are accredited by specialized
agencies on workplace Human Rights.
f. The inspections of the Ministry of Labour and Social Welfare must be
reliable and really sources of objective information and the results must be
knowledge for the population.
g. The Ministry must not allow any negotiation between employer and worker
who goes against the inherent rights.
It is recommended that employers in the maquila in El Salvador:
1) The Corporations must comply with treaties and ILO conventions and national
legislation relating to compliance and enforcement of labor rights.
2) The Corporations must improve the infrastructure of the premises where the
activity occurs maquila (walls, sanitation, ventilation, lighting, drinking water, and
others).
3) Encouraging workers in the maquila with a special bonus duly authenticated and
documented by the productivity they have.
4) Corporations must contribute to projects that improve the quality of life / as
workers in the maquila industry.
5) Corporations must create within the company a social projection area to develop
projects that benefit the working community.
Recommendations for Transnational Companies
1)
International Companies should require that the maquiladoras, contractors
and subcontractors, compliance with national and international legal
framework on workplace human rights.
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2)
International Companies should ensure that all the maquiladora who have
signed contracts, they are solvents with payments of social benefits for their
workers.
3) International Companies should sing contracts only with maquiladoras which
have no history of violation of workplace human rights.
4) International Companies should establish along with the Fair Labor
Association, a permanent representation of an Ombudsman to monitor
compliance with the workplace Human Rights to check on all contractors and
subcontractors.
SPECIFICS RECOMENDATIONS:
Before we comment on:
Remediation or Repair Capacity.
The motivation to perform a job can come from several sources:
• One of the most common is the need to comply with a order. Usually it is a order
whose violation implies a punishment, a bad grade, a disqualification, a bad
evaluation. In these cases, the motivation to work is powered by a persecutory
mental state.
• A method that generates a commitment to link to short, medium and long term and,
therefore, disposed to creativity, is what comes of remediation or repair. This method
produces peace, for having known and having a difficult situation resolved. Is a
provision that comes from experience, with the advantage of creating the feeling of
having provided a service, committed and responsible for responding to the
company, employees, contractors, subcontractors, suppliers or others.
One of the factors of greatest relevance to the work undertaken since the restorative
approach is the kind of commitment is created by our commitments and with the
beneficiaries of such commitments.
In other words, people with attitude restorative are more willing than others to make
sacrifices to achieve the overall objectives, will indulge in the feeling of being useful
to the construction of a project that goes beyond their own interests, using the
values Group in making decisions of their own work and are in a constant search for
opportunities, solutions and alternatives that are functional to the group and the
company.
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Related to the findings, the following is recommended:
FORCED WORK. OVERTIME NOT PAYED.
Should not be allowed the practices extra work without it being paid. The work done by
staff using overtime hours must be paid, without looking for the excuse that some
workers work without the request of the company. The practice of canceling overtime
only to authorized workers, permits the exclusion of those who are forced to work
overtime to meet production targets
INCENTIVES:
The salaries must be paid, according with the Salvadorian law and the practice of the
international big brands.
HARASSMENT AND ABUSE BY SUPERVISORY STAFF
Staff should be trained in monitoring Human Rights Labor, Human Relations, technical
humanistic of oversight and all those others that could improve employee performance
without jeopardizing their rights.
VACATIONES AND HOLYDAYS:
Should not restrict the enjoyment of the right to leave and holidays established by law
RESTROOMS:
The surveillance cameras should be removed from places near to the restrooms and
should not be used as a pressure offensive to dignity of the worker.
INFLUENCE IN THE INTERVIEWS:
The Directors of the factory or their managers should not try to influence the responses
of the workers to pressuring them before the interviews, trying to influence the results of
audits.
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DO NOT EXIST SALARY PROTECTION:
A primary obligation of employers is to protect workers' wages and is not justified in any
way the illegal practice of discounts over the percentage allowed by law. Accordingly,
such discounts should not continue.
SAVING PLAN:
Although the factory administration says that participation in the savings plan is
voluntary, it does not have any legal basis. Therefore must be obtained legalization.
FORMS OF LABOUR RECRUITMENT:
The activities performed by workers are permanent, so it is not correct and should not
continue to practice to set up in the contracts that are for a definite term (annual), even
with the adjective "renewable. The practice of annual compensation does not justify this.
SAFETY INDUSTRIAL:
Must be overcome all the recommendations about safety industrial, identified and
signaled in this report.