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FLA Audit Profile
Country Pakistan
Name of Factory 260257628F
Independent External Monitoring Organization T-Group Solutions Pvt. Ltd.
Date(s) in Facility August 28-29, 2007
FLA Affiliated Compan(ies) Nike, Inc. & Russell Corp.
Number of Workers 3900
Product(s) Knits - Tops and Bottoms
Production Processes Knitting - dyeing - cutting - printing - embroidery - sewing - finishing - packing
FLA Code/Benchmark Compliance Status Describe noncompliance, risk of noncompliance or List sources/documentation used Cite and describe local and/or Describe notable features
uncorroborated evidence of noncompliance for reference and corroborating country laws used for additional implemented by factory
evidence (e.g. worker interviews, reference management or Company
factory walkthrough, records
review, etc.)
1. Code Awareness
GEN 2: Ensure that all Company factories as well as contractors Noncompliance Most workers interviewed were not aware of the Code Interview with workers
and suppliers inform their employees about the workplace Elements
standards orally and through the posting of standards in a
prominent place (in the local languages spoken by employees
and managers) and undertake other efforts to educate
employees about the standards on a regular basis.
GEN 3: Develop a secure communications channel, in a manner Noncompliance Nike contact details were not provided in the Code posters Visual inspection and interview
appropriate to the culture and situation, to enable Company seen in the work areas. Workers were not aware of any with workers
employees and employees of contractors and suppliers to report confidential non-compliance reporting mechanism
to the Company on noncompliance with the workplace standards, implemented by the P.C.
with security that they shall not be punished or prejudiced for
doing so.
2. Forced Labor
There will not be any use of forced labor, whether in the form of
prison labor, indentured labor, bonded labor or otherwise.
F.9 Employment Records Noncompliance 1.Employment documents were not maintained for Daily Review of records and Interviews
wage workers except for National identity Cards 2.Daily with workers and Management.
wage workers were issued a Temporary Entry Pass valid
for 1 week. They were issued a time card for that week
only. Incase they continue to work fresh time cards and
passes were issued with a different registration number
for another week. Hence , every week a fresh time card
and pass were issued
F.13 Worker Ability to Terminate-Freedom of Movement Noncompliance 1.Factory does not have a policy for Termination. 2. Review of records and Interviews
Procedure for disciplinary action/ termination is not defined with workers and Management.
by the factory.
Other Noncompliance 1.Discrepancies noticed in the total number of employees Review of records and visual
based on department wise breakdown and shift wise inspection
worker breakdown. As per department wise breakdown,
there were 3766 employees. As per shift breakdown, there
were 3900 employees. As per section wise shift
breakdown with timings, there were 3750
employees.2.During the opening meeting, the
management mentioned that they hired daily wage
workers and currently there were approximately 150 such
workers. However, at 11am the auditors went to the work
areas and none of these workers were available. Review
of the time cards punched revealed that few of these
workers entered the factory between 6 am and 8.30 am.
There were few who worked on the night shifts also. It
appeared that these workers were asked to leave the
facility so that they would not be around during the audit.
3. Some postings were seen in the time office. Workers
did not read these as they had been instructed to swipe
their cards quickly, to avoid over-crowding, while entering
and exiting the factory.
3. Child Labor 1
FLA Code/Benchmark Compliance Status Describe noncompliance, risk of noncompliance or List sources/documentation used Cite and describe local and/or Describe notable features
uncorroborated evidence of noncompliance for reference and corroborating country laws used for additional implemented by factory
evidence (e.g. worker interviews, reference management or Company
factory walkthrough, records
review, etc.)
No person will be employed at an age younger than 15 (or 14
where the law of the country of manufacture allows) or younger
than the age for completing compulsory education in the country
of manufacture where such age is higher than 15.
4. Harassment or Abuse
Every employee will be treated with respect and dignity. No
employee will be subject to any physical, sexual, psychological or
verbal harassment of abuse.
H&A.2 Discipline/Progressive Discipline Noncompliance 1.Factory does not have a policy for Termination. 2. Review of records and Interviews
Procedure for disciplinary action/ termination is not defined with workers and Management.
by the factory.
5. Non-Discrimination
No person will be subject to any discrimination in employment,
including hiring, salary, benefits, advancement, discipline,
termination or retirement, on the basis of gender, race, religion,
age, disability, sexual orientation, nationality, political opinion, or
social or ethnic origin.
6. Health and Safety
Employers will provide a safe and healthy working environment to
prevent accidents and injury to health arising out of, linked with,
or occurring in the course of work or as a result of the operation
of employer facilities.
H&S.1 General Compliance Health and Safety Noncompliance 1.Medical check up of all employees for detecting Review of records and interview Factories Act 1934, section 23 -
contagious disease was not conducted in Jan and July with Management and workers. A
2007 as required by Law. 2. Vaccination for Small pox,
Typhoid and Cholera, as required by Law was not done.
The last vaccination done was in Feb 2004 for Hepatitis
(B).
H&S.8 Permits and Certificates Noncompliance 1. Lift inspection Certificate , Lift operator training record, Visual inspection Factories Act 1934 Section 33-
Lift maintenance record were not produced for review in A, Punjab Factories Rules,
spite of repeated requests. 2. Building stability certificate 1978; Rule 95(1),Punjab
was available only for new Building ( B2) . This document Factories Rules, 1978; Rule 17
was not available for other buildings.3. Lime wash and & 45,Factories Act, 1934;
painting records not maintained as required by Law. Section 33-C
4.Factory did not have a pressure plant inspection
certificate as required by Law. 5.Only Chemical test report
of Drinking water was available. Biological test report was
not available as required by Law.
2
FLA Code/Benchmark Compliance Status Describe noncompliance, risk of noncompliance or List sources/documentation used Cite and describe local and/or Describe notable features
uncorroborated evidence of noncompliance for reference and corroborating country laws used for additional implemented by factory
evidence (e.g. worker interviews, reference management or Company
factory walkthrough, records
review, etc.)
H&S.9 Evacuation Requirements and Procedure Noncompliance 1. Fire Evacuation Logs did not provide details of number Visual inspection Factories Act, 1934; Section 24
of workers present during the evacuation. There were no , Section 25.and Section 33-A.
remarks on the responses from emergency teams.2. Few
exits had illuminated exit signage which may not be visible
in thick smoke owing to poor illumination. High beam
emergency lights were not installed above exits and on
staircase landings. 3. Aisle and Evacuation route markings
were either missing or faded in most work areas. 4.
Approach to 2nd Exit from Finishing section in Sampling
section located in building no.3 was blocked with
garments. 5.Most aisles in all work areas were either
partially blocked or completely blocked with garment bins,
pedestal fans, tables or other work stations. 6.Side aisles
in the printing section were very narrow. There was hardly
any space between the tables and side walls. A person
could not even walk freely on the aisle.7. Approach to Fire
exit from Print Curing section was blocked with Bed Press
machine.8. Few Exit doors in the facility open inwards. 9
Evacuation plans were missing from most work areas.
H&S.9 Evacuation Requirements and Procedure Noncompliance 10.Most of the aisles in the cutting section were very Visual inspection
narrow. 11. Auto spreader blocks aisles in the cutting
section. 12.Numerous instances noticed where access to
passages for workers were completely blocked with
garments, tables and bins. These workers were
completely caged in their work stations. The auditor was
unable to reach these work stations located on the sides
of the floor. Approach to these work stations was blocked
from both ends. 13. 2nd Exit from sample Section 1 was
through a window opening into the cutting section.
Wooden steps were provided on both sides of the window.
However, when the auditor attempted to cross over, the
steps on the cutting side gave away . The steps provided
on both the sides were weak and unstable. 14. 2nd Exit
from the Sampling section was blocked with tables and a
cupboard on the Cutting Side. There was no way that
anyone could use this Exit. 15. There was no 2nd exit from
thread cutting area in the finishing section located on the
3rd floor. The passage was completely blocked with tables.
H&S.9 Evacuation Requirements and Procedure Noncompliance 16. Air coolers were installed on the Fire Exit from Visual inspection
Sampling section in building no.3. 17. Workers were seen
standing on aisles and working in most of the work areas.
18. Sample section I had only 1 exit.19. Area in front of
Exits from room housing printing tables 1 & 2 was very
narrow. 20.There was a drop of approximately 3 feet in the
floor level of the area in front of Exit from knitting section.
No fencing or guard was installed to prevent accidents
during an emergency evacuation. Also no signage was
posted near this area to warn workers of the drop in floor
level. 21 Electric cable connecting heaters with the mains,
in the printing section were loose, close to workers feet
and crossing walk ways. 22. Due to constraint of space,
factory conducted fire evacuation drills section wise, once
every 3 months. The complete factory was evacuated once
a year. 23. “Do not use lift incase of fire” signage was not
posted near the lifts 24 2 to 3 workers seen working in the
same work station .
3
FLA Code/Benchmark Compliance Status Describe noncompliance, risk of noncompliance or List sources/documentation used Cite and describe local and/or Describe notable features
uncorroborated evidence of noncompliance for reference and corroborating country laws used for additional implemented by factory
evidence (e.g. worker interviews, reference management or Company
factory walkthrough, records
review, etc.)
H&S.9 Evacuation Requirements and Procedure Noncompliance 25.Few work stations on the sewing floor were Visual Inspection
overcrowded with workers caged in with garments and
tables from all sides. They had no access to the passages.
The auditors could not reach few of these work stations
H&S.10 Safety Equipment and First Aid Training Noncompliance 1.Instructions for First Aid was not posted near the kits as Visual inspection Punjab Factories Rules, 1978;
required by Law. 2. List of supplies in the First Aid kit did Rule 96(2),Punjab Factories
not meet legal requirements. 3. Approach to few fire Rules, 1978; Rule 96(1) and
extinguishers were seen blocked with garments and fabric Factories Act, 1934; Section 25
bundles.
H&S.11 Personal Protective Equipment Noncompliance 1. Excessive floating fiber noticed in the sewing floors. Visual inspection & interview with Factories Act, 1934; Section 33-
Workers complained of lint on their hair and face which workers. K, Section 33-G, Section 26
was aggravating the sinus and asthma allergy in many and Section 33
instances.2. None of the operators were using the eye
shields installed on over lock machines.3.Tag guns were
not marked. 4.Snap button machine did not have a finger
guard. 5. Band knife operator uses mesh gloves only on 1
hand. 6. Few workers in the dyeing section were not using
ear plugs, gloves and appropriate shoes. 7. Over lock
operators were not using respiratory masks. Excessive
floating fiber were seen in the area which was also noticed
on workers’ hair.
H&S.13 Chemical Management and Training Noncompliance 1. Chemical storage area in the dyeing section was open Visual inspection
and easily accessible to employees. 2.Containers with
chemicals used for Printing were lying open near the
printing tables.
H&S.17 Ventilation/Electrical/Facility Installation and Maintenance Noncompliance 1. Few open electric junction boxes noticed. 2.Few Visual inspection Factories Act, 1934; Section 15
Pedestal fans were connected to the mains without a plug. & Section 19.Factories Act,
3.Temperatures recorded in the facility were ranging from 1934; Section 33-N
95 to 110 degrees F. 4. Ventilation was very poor in the
work areas. 5.Lighting levels recorded was ranging
between 52 lux to 230 lux on few sewing machines and
285 lux in the print curing section . Lighting Level recorded
on few checking stations in the finishing sections was 410
to 480 lux. 6. Excessive lint seen on all electrical
installations.7. Review of Accident register revealed
instances of many workers being sent to Hospital for
falling unconscious.
H&S.18 Machinery Maintenance and Worker Training Noncompliance 1.Needle guards were missing from few sewing machines. Visual inspection Factories Act, 1934; Section 26
Few had been tampered rendering them ineffective. 2. Belt
guards were missing from most sewing machines 3. Pedal
Mats were missing from most sewing machines. Many
workers were noticed operating these machines bare feet.
H&S.20 Bodily Strain Noncompliance 1 .Few workers with standing jobs were seen wearing high Visual inspection
heeled footwear. 2. Workers were provided with hard
stools to sit on .
H&S.22 Sanitation in Factory Facilities Noncompliance 1. Water Seepage was noticed on the walls in the finishing Visual inspection Factories Act, 1934; Section 13
area in Sampling section located in building no. 3. 2.
Fabric was seen kept on the floor in the cutting section .3.
Fabric was seen kept on the floor in the cutting section.
4.Excessive amount of waste material comprising of cut
ends and cartons were seen piled up near building three.
5.Housekeeping standards were poor. All work areas were
littered with cut ends of fabric.
H&S.23 Toilets Noncompliance Number of toilets for Males were inadequate. Visual inspection Factories Act, 1934; Section 21
H&S.25 Food Preparation Noncompliance Factory did not have a Canteen as required by Law. Visual inspection West Pakistan Factories
Canteen Rules, 1959
4
FLA Code/Benchmark Compliance Status Describe noncompliance, risk of noncompliance or List sources/documentation used Cite and describe local and/or Describe notable features
uncorroborated evidence of noncompliance for reference and corroborating country laws used for additional implemented by factory
evidence (e.g. worker interviews, reference management or Company
factory walkthrough, records
review, etc.)
H&S.26 Drinking Water Noncompliance Cool drinking water was not available as required by Law. Visual inspection Factories Act, 1934; Section 20
Other Noncompliance 1.Factory did not have Welfare and Safety officers as Interview with Management Factories Act, 1934; Section 24-
required by Law.2.. Review of record of grievances A , Punjab Factories Rules,
received in the Suggestion / Grievance boxes for Aug 07 1978; Rule 38 and West
revealed that workers felt uncomfortable to use the PPE Pakistan Industrial &
due to excessive heat on the production floors. Drinking Commercial Employment
water points provided for ladies was also being used by (Standing Order) Ordinance,
male workers.3.Particulars of Room ( Working space in 1968; Section 10-B
work areas ) - FORM I (Rule 38 ) was not being
maintained as required by Law 4.Factory did not have a
group insurance for Death , Partial , Full , Temporary and
Permanent disability and fortnight income benefit for
employees, as required by Law
7. Freedom of Association and Collective Bargaining
Employers will recognize and respect the right of employees to
freedom of association and collective bargaining.
FOA.5 Employer Interference/Constitution, Elections, Noncompliance As per the Management the representatives in the Joint Interview with Management
Administration, Activities and Programs Worker management committees had been nominated by
the Management. .
FOA.14 Severance Pay Noncompliance Terminal dues were not being paid within the time Review of records and interview West Pakistan Industrial &
stipulated by the local law with Management. Commercial Employment
(Standing Orders) Ordinance,
1969; Section 12
FOA.26 Grievance Procedure Risk of Workers interviewed were not aware of any worker Interview with workers
noncompliance committees or Joint Worker – Management committees.
8. Hours of Work
Except in extraordinary business circumstances, employees will
(i) not be required to work more than the lesser of (a) 48 hours
per week and 12 hours overtime or (b) the limits on regular and
overtime hours allowed by the law of the country of manufacture
or, where the laws of such country will not limit the hours of work,
the regular work week in such country plus 12 hours overtime;
and (ii) be entitled to at least one day off in every seven day
period.
HOW.1 General Compliance Hours of Work Noncompliance Review of Time Records of Security Guards revealed that Review of records Factories Act, 1934; Section 34
on few occasions they had worked for 16 to 24 hours per & 47
day continuously
HOW.2 Rest Day Noncompliance 1.Review of documents collected from the Production floor Review of records and interview Factories Act, 1934; Section 35
revealed that factory had been working on all weekly rest with workers and Management and 35 A.
days over the past 3 months. 2. Factory did not provide a
Compensatory off, for work done on rest days. 3. Instances
noticed where few workers had worked 12 to 13 days
continuously without a day of rest. 4. Most workers
interviewed stated that they do not get a weekly off
5
FLA Code/Benchmark Compliance Status Describe noncompliance, risk of noncompliance or List sources/documentation used Cite and describe local and/or Describe notable features
uncorroborated evidence of noncompliance for reference and corroborating country laws used for additional implemented by factory
evidence (e.g. worker interviews, reference management or Company
factory walkthrough, records
review, etc.)
HOW.6 Time Recording System Noncompliance 1.Daily wage workers were issued a Temporary Entry Pass Review of records and interview
valid for 1 week. They were issued a time card for that with Management.
week only. Incase they continued to work, fresh time card
and pass were issued with a different registration number
for another week. Hence, every week a fresh time card
and pass was issued.2.The auditors had access to the
main server after repeated requests. Review of options in
the software revealed a software menu link which said
“Reports – Actual OT”. When opened, this file had data
pertaining to actual hours of work. . On investigating
further, the Management stated that they officially
reflected only 2 hours of OT per day . This is to comply
with requirements of few brands that the factory produces
for. OT hours worked beyond 2 hours a day were
recorded separately and compensated through a voucher.
This practice was not disclosed during interview with the
Management.
HOW.8 Overtime/Reduced Mandated Overtime Noncompliance Review of actual time records collected from the main Review of records. Factories Act, 1934; Section 34
server, revealed that Housekeeping workers & Security
Guards worked more than 60 hours a week. Few piece
rated workers had worked up to 148 hours of overtime in
July 07 and had worked up to 82.5 hours per week.
HOW.12 Extraordinary Business Circumstance/Overtime Noncompliance Though workers signed on the consent form for working Review of records
Explanation overtime, hours of overtime work to be done were not
mentioned on these sheets
HOW.13 Public Holidays Noncompliance Factory had worked on a national holiday ( Aug 14, 07 – Review of records and interview Factories Act, 1934; Section 35-
Independence Day ). with workers. A
HOW.18 Annual Leave/Wage Payments Noncompliance Yearly and half yearly returns for Holiday with pay was not Review of records and interview Punjab Factories Rules, 1978;
maintained as required by Law. with Management. Rule 135(1) & (2)
HOW.20 Sick Leave/Restrictions Noncompliance Factory provided sick Leave for 8 days instead of 16 days Review of records and interview Factories Act, 1934; Section 49-
a year as required by Law with Management and workers. H
Other Noncompliance 1.Information on Actual shift timings of workers could not Interview with Management & Factories Act, 1934; Section 39
be produced till the end of the audit on day two. 2.Though visual inspection.
the Management stated that few sections work on 3 shifts
i.e. from 6 am to 2pm, 2pm to 10 pm and from 10 pm to
6am, few workers were seen entering the factory at 3 pm.
The management later stated that the cutting section
worked on 3 shifts from 7 am to 3 pm, 3pm to 11pm and
from 11pm to 7 am.
9. Wages, Benefits and Overtime Compensation
WAGES AND BENEFITS: Employers recognize that wages are
essential to meeting employees’ basic needs. Employers will pay
employees, as a base, at least the minimum wage required by
local law or the prevailing industry wage, whichever is higher, and
will provide legally mandated benefits.
OVERTIME COMPENSATION: In addition to their compensation
for regular hours of work, employees will be compensated for
overtime hours at such premium rate as is legally required in the
country of manufacture or, in those countries where such laws
will not exist, at a rate at least equal to their regular hourly
compensation rate.
6
FLA Code/Benchmark Compliance Status Describe noncompliance, risk of noncompliance or List sources/documentation used Cite and describe local and/or Describe notable features
uncorroborated evidence of noncompliance for reference and corroborating country laws used for additional implemented by factory
evidence (e.g. worker interviews, reference management or Company
factory walkthrough, records
review, etc.)
WBOT.2 Minimum Wage Noncompliance 1.Calculation of wages for days worked did not comply Review of records and interview Pakistan Minimum Wages for
with legal requirement. Factory calculated wages based on with Management. Unskilled Workers Act, 1969;
number of days in the month instead of 26 as specified by Section 3 Definition of Month,
the local law. 2. Minimum Wages were not being paid as Min. Wage Board Notification
per skill levels, notified by the local minimum wage board. dated 13-06-2007
E.g. Few Packers were being designated as loaders and
were being paid Rs 4600 ( unskilled wages ) instead of
being paid Rs 4753 (Semi skilled ).Similarly the Quality
checker was being paid Rs 4600 (Unskilled wage) instead
Rs 5137.3. Review of wage records for stitchers (Piece
rated) revealed that they were being paid an unskilled
wage of Rs 4600 as total wage.
WBOT.4 Timely Payment of Wages Noncompliance Night allowance being paid to night shift workers and Review of records Payment of Wages Act, 1936;
production incentives being paid to all workers did not Section 5
reflect on wage records. These were being paid through a
separate pay sheet. There was no fixed date for payment
of these incentives.
WBOT.5 Holidays, Leave, Legal Benefits and Bonuses Noncompliance 1.Factory provided Sick Leave for 8 days instead of 16 Review of records Factories Act, 1934; Section 49-
days as required by Law. 2. Daily wage workers ( H
approximately 150 workers ) were being frequently rotated
and their time cards and gate-pass were changed every
week. This was being done with the intent of ensuring that
mandatory benefits were not provided to these workers.
WBOT.8 Calculation Basis for Overtime Payments Noncompliance 1.Calculation for Overtime compensation did not comply Review of records and interview Pakistan Minimum Wages for
with legal requirements. Factory calculated OT with Management Unskilled Workers Act, 1969;
compensation by multiplying 80 % of gross salary by 12 Section 3
months and then divided the result by 313 working days X
8 hours X 2. By law, full gross salary should be divided by
208 hours X 2 (i.e. at twice the ordinary rate of pay). Based
on the calculation adopted by the factory the worker was
being compensated at a lower rate than applicable. E.g. If
a worker was earning Rs 4600, he was being paid
overtime at the rate of Rs 35.27 per hour instead of Rs
44.23. 2. Pay records for July 2007 of piece rated workers
being shown on Salary basis revealed inaccurate
calculation for OT compensation. This calculation was
based on an unskilled wage and not on wage applicable
as per skill category.
WBOT.12 Overtime Compensation for Piece Rates and Other Noncompliance 1.Till June 07, wages for tailors were being paid on piece Review of records Min. Wage Board Notification
Incentive Schemes rate basis. Effective July07, these workers were being paid dated 13-06-2007
on a monthly salary basis. As per the management, these
workers were shown on a monthly salary though they
continued to work on piece rate basis. Their OT
compensation was being calculated based on a monthly
salary.The difference between the earnings and actual
piece rate earnings was paid as incentive. So far there was
no appropriately defined basis for calculating the incentive
being paid.This system was being introduced to comply
with legal requirements for OT compensation. However,
since actual work was based on a piece-rate system
calculation of compensation for overtime was not legally
compliant. 2. Pay records for July 2007 of piece rated
workers being shown on Salary basis revealed inaccurate
calculation for OT compensation. This calculation was
based on an unskilled wage and not on wage applicable
as per skill category
7
FLA Code/Benchmark Compliance Status Describe noncompliance, risk of noncompliance or List sources/documentation used Cite and describe local and/or Describe notable features
uncorroborated evidence of noncompliance for reference and corroborating country laws used for additional implemented by factory
evidence (e.g. worker interviews, reference management or Company
factory walkthrough, records
review, etc.)
WBOT.13 Deposit of Legally Mandated Deductions Noncompliance 1. Legally mandated benefits of Employee Old Age Benefit Review of records and interview Employee Old-Age Benefit Act,
and Social Security were not being extended to Daily with management. 1976
Wage Workers. The Factory was not contributing towards
these benefits as required by Law. 2. Member application,
declaration of share, nomination for minor / non minor for
Provident benefits was not maintained in the facility.
WBOT.17 Accurate Calculation and Recording of Wage Noncompliance Till June 07 wages for tailors were being paid on piece rate Review of records and interview
Compensation basis. Effective July 07, these workers were being paid on with Management.
a monthly salary basis. As per the management, these
workers were being shown on a monthly salary though
they continue to work on piece rate basis. Their OT
compensation was being calculated based on a monthly
salary. The difference between the earnings and actual
piece rate earnings was paid as incentive. However, there
was no formula for calculating the incentive being paid.
This system was being introduced to comply with legal
requirements for OT compensation as stated by the
management. However, this methodology does not meet
legal standards for piece-rate earnings.
WBOT.18 Accurate Length of Service Calculation Noncompliance Daily wage workers were issued a Temporary Entry Pass Review of records
valid for 1 week. They were issued a time card for that
week only. Incase they continued to work fresh time card
and pass were issued with a different registration number
for another week. Hence , every week a fresh time card
and pass were issued. Hence actual length of service
could not be verified.
WBOT.20 Payroll Record Maintenance/Worker Acknowledgement Noncompliance Interviews with Daily wage loaders and loading supervisor Review of records and interview
revealed that the loading supervisor would collect the with workers.
wages of these loaders from the accounts department by
signing on the Daily wages attendance / Payment sheet.
He would then disburse the wages. These sheets did not
reflect details of wages paid to individual loaders.
However, workers had acknowledged receipt of wages.
Amount received was not mentioned anywhere . Same
system for daily wage workers was being followed for
workers working in the Waste store, Inverter Section,
General store, Fabric Store and Housekeeping workers.
Many payment sheets had entries reflecting “Wages for
double duty”. Management could not provide any
explanation for this “Double Duty”.
WBOT.21 Record Maintenance Noncompliance 1.Record of service was not maintained for employees as Review of records Employment (Record of
required by Law.2. Audit reports for Provident Fund Service) Act, 1951,
accounts for fiscal years 2005 – 06 and 2006-07 were not
available. As per the Law, these should be maintained in
the facility.3. Member application, declaration of share ,
nomination for minor / non minor for Provident benefits
were not maintained in the facility
WBOT.26 Pay Statement Noncompliance Daily wage workers did not receive a wage slip. Interview with workers and West Pakistan Minimum
Management. Wages Rules, 1962; Section
19(2)
Other Noncompliance 1 Factory was not registered with Government Review of records and interview Apprenticeship Ordinance, 1.Factory has a worker
Apprenticeship Institute as required by Law. 2.Factory had with Management. 1962,Punjab Fair Price Shop incentive scheme
not provided a fair price shops required by law. 3.Worker (Factories) Ordinance, 1971 2.Factory provides pick
Welfare fund had not been established as required by Law. and Worker Welfare Fund and drop facility for
Ordinance, 1971 female workers.
10. Miscellaneous
Subcontracting, homework and other issues not covered by
above benchmarks and code requirements.
8
FLA Code/Benchmark Compliance Status Describe noncompliance, risk of noncompliance or List sources/documentation used Cite and describe local and/or Describe notable features
uncorroborated evidence of noncompliance for reference and corroborating country laws used for additional implemented by factory
evidence (e.g. worker interviews, reference management or Company
factory walkthrough, records
review, etc.)
Other Noncompliance 1.Abstract of the Local Labour Law were not posted .2. Visual inspection. Factories Act, 1934 1.Factory organizes inter
Towards the end of day two of the audit a person was department Cricket
seen walking into the factory with a polybag containing cut Matches. 2.Factory
pieces. He was carrying a material transfer document extends financial
which stated that the pieces were being transferred from assistance for natural
unit - Cutting 3 . On further investigation , it was found that calamities.
cutting was being done in a building opposite the factory
across the road. One of the auditors walked into the
building with the worker and noticed cutting operations in
progress and a store. Usage of this building was neither
disclosed by the Management during the opening meeting
nor during the audit procedure. Although this unit was not
covered in the audit a brief walk through revealed
numerous Health & Safety flaws.
9
FLA Audit Profile
Country Pakistan
Name of Factory 260257628F
Independent External Monitoring Organization T-Group Solutions Pvt. Ltd.
Date(s) in Facility August 28-29, 2007
FLA Affiliated Compan(ies) Nike, Inc. & Russell Corp.
Number of Workers 3900
Product(s) Knits - Tops and Bottoms
Production Processes Knitting - dyeing - cutting - printing - embroidery - sewing - finishing - packing
FLA Code/Benchmark Compliance Status Remediation Status
Description of noncompliance, risk of noncompliance or Company Company Remediation Plan Target Factory Response Company Follow-Up (March 12, 2008) Documentation Completed, Pending,
uncorroborated evidence of noncompliance Internal Audit Completion Date (optional) On-going
Findings
(optional)
GEN 2: Ensure that all Company factories as well as contractors and Noncompliance Most workers interviewed were not aware of the Code Code of Conduct posters are posted and provided in training Done 3-12-08. COC posters are prominently posted and contents Completed
suppliers inform their employees about the workplace standards orally and Elements and worker's handbook. Induction training is mandatory for are incorporated in induction training and workers handbook.
through the posting of standards in a prominent place (in the local languages each employee on the first day of employment. All contents of
spoken by employees and managers) and undertake other efforts to handbook are read for illiterate workers.
educate employees about the standards on a regular basis.
GEN 3: Develop a secure communications channel, in a manner appropriate Noncompliance Nike contact details were not provided in the Code Contact details missed by Nike and ****Name of the Factory*** Done Completed
to the culture and situation, to enable Company employees and employees posters seen in the work areas. Workers were not and both remediated for correction. Nike local contact
of contractors and suppliers to report to the Company on noncompliance aware of any confidential non-compliance reporting numbers have been posted on all Code of Conduct posters in
with the workplace standards, with security that they shall not be punished or mechanism implemented by the P.C. the factory.
prejudiced for doing so.
F.9 Employment Records Noncompliance 1.Employment documents were not maintained for 1. To conduct payroll as per law. 2. Proper documentation. 11/1/2007 Due to high turnover. 3-12-08. Completed
Daily wage workers except for National identity Cards 1) Personnel files for daily workers are being maintained which
2.Daily wage workers were issued a Temporary Entry contain all the information relating to an individual's service
Pass valid for 1 week. They were issued a time card 2) Factory has worked on development of a policy for
for that week only. Incase they continue to work fresh streamlining daily workers. Daily workers are only employed
time cards and passes were issued with a different for a period of 2-4 days for loading activities at the time of
registration number for another week. Hence , every shipments. Factory now has an active defined policy for
week a fresh time card and pass were issued management of these workers including their timekeeping,
wage payments, and social benefits provided. No issues noted
in records review from Jan 08 onwards.
F.13 Worker Ability to Terminate-Freedom of Movement Noncompliance 1.Factory does not have a policy for Termination. 2. 1. Termination policy will be put into policy. 2. To be a part of 11/1/2007 3-12-08. Factory has developed a disciplinary and termination Completed
Procedure for disciplinary action/ termination is not the termination policy. policy. The same has been communicated to workers by
defined by the factory. display on the factory notice board.
Other Noncompliance 1.Discrepancies noticed in the total number of 1. The factory uses 150 wage rate workers during high peak 11/1/2007 Factory uses daily wage 3-12-08. 1.) Detailed shift wise breakdown has been prepared Completed
employees based on department wise breakdown and production worker in excess of 150 with total number of workers working the factory.
shift wise worker breakdown. As per department wise 2. Proper documentation. Factory has reduced daily wage 2.) Effective 11/1/07 all daily wage workers have been
breakdown ,there were 3766 employees. As per shift workers. Complete tracking from HR department to their absorbed as permanent workers. If there is a need for
breakdown , there were 3900 employees. As per payment record is computerized. temporary worker, proper documentation is made including
section wise shift breakdown with timings, there were 3. Postings adequately displayed in time office. Additional appointment contract, payment record, attendance and
3750 employees.2.During the opening meeting, the postings placed in Production Halls. Local law requires posting payment slip.
management mentioned that they hired daily wage at main entrance, thus posted in time office.
workers and currently there were approximately 150
such workers. However, at 11am the auditors went to
the work areas and none of these workers were
available . Review of the time cards punched revealed
that few of these workers entered the factory between 6
am and 8.30 am . There were few who worked on the
night shifts also . It appeared that these workers were
asked to leave the facility so that they would not be
around during the audit. 3. Some postings were seen in
the time office. Workers did not read these as they had
been instructed to swipe their cards quickly, to avoid
over-crowding, while entering and exiting the factory.
H&A.2 Discipline/Progressive Discipline Noncompliance 1.Factory does not have a policy for Termination. 2. 1. Termination policy will be put into policy. 2. To be a part of 11/1/2007 3-12-08. Factory has formulated and implemented a Completed
Procedure for disciplinary action/ termination is not the termination policy. termination policy.
defined by the factory.
H&S.1 General Compliance Health and Safety Noncompliance 1.Medical check up of all employees for detecting 1. Factory has established in-house clinic for regular checkup 1/1/2008 3-12-08. 1.) It is now a regular practice and all the workers Completed
contagious disease was not conducted in Jan and July of all employees. 2. Vaccination process to be conducted are being checked at newly established clinic. The whole lot of
2007 as required by Law. 2. Vaccination for Small pox, upon consultation with pharmaceutical companies. works is expected to be checked once by the end and of
Typhoid and Cholera, as required by Law was not done. March 08 after which we will start checkups once gain and so
The last vaccination done was in Feb 2004 for Hepatitis on.
(B). 2.) Vaccination completed.
H&S.8 Permits and Certificates Noncompliance 1. Lift inspection Certificate , Lift operator training 1. Lift inspection certificate provided at closing meeting. 12/31/2007 3-12-08 1.) Lift certificate available and confirmed in closing Ongoing
record, Lift maintenance record were not produced for 2. Noted. Will be obtained. meeting.
review in spite of repeated requests. 2. Building stability 3. Painting completed; records to be maintained. 2.) Certificates available for both buildings.
certificate was available only for new Building ( B2) . 4. No government authority performs pressure plant 3.) - 3-12-08 confirmed painting as required per law.
This document was not available for other buildings.3. inspections. 5. Noted. Will be obtained. 4.) - 3-12-08. Will be checked with relevant authority. Boilers
Lime wash and painting records not maintained as have been annually inspected. As per auditors request, we
required by Law. 4.Factory did not have a pressure have checked with government, they do not do any inspection
plant inspection certificate as required by Law. 5.Only for Air Compressors.
Chemical test report of Drinking water was available. 5.) - Biological test pending.
Biological test report was not available as required by
Law.
10
FLA Code/Benchmark Compliance Status Remediation Status
Description of noncompliance, risk of noncompliance or Company Company Remediation Plan Target Factory Response Company Follow-Up (March 12, 2008) Documentation Completed, Pending,
uncorroborated evidence of noncompliance Internal Audit Completion Date (optional) On-going
Findings
(optional)
H&S.9 Evacuation Requirements and Procedure Noncompliance 1. Fire Evacuation Logs did not provide details of 1. Evacuation plan implemented with proper documentation. 12/31/2007 3-12-08 1.) Will be done. Ongoing
number of workers present during the evacuation. 2. Factory will add additional emergency lighting. 2.) Emergency light installed at all relevant points.
There were no remarks on the responses from 3. Routine re-marking will be executed. 3.) All access points are marked as per requirements. Excess
emergency teams.2. Few exits had illuminated exit 4 & 5. Removed immediately. traffic does require frequent fresh markings.
signage which may not be visible in thick smoke owing 6. Removed tables. Will work on space restraint. 4.) Removed immediately.
to poor illumination. High beam emergency lights were 7. Removed immediately. 6.) Work has been stopped in that section as is requires major
not installed above exits and on staircase landings. 3. 8. All exits lead outside of building. All opening inwards from construction changes for proper aisles.
Aisle and Evacuation route markings were either inside building to be corrected. 7.) Removed immediately.
missing or faded in most work areas. 4. Approach to 9. Evacuation plans have now been posted. 8.) Ensured that all exits leading to outside the building open
2nd Exit from Finishing section in Sampling section outward. A few exits open inwards, which will be corrected.
located in building no.3 was blocked with garments. Re-designed door openings.
5.Most aisles in all work areas were either partially 9.) Evacuation palns have been posted throughout the factory.
blocked or completely blocked with garment bins, As discussed during closing meeting two missing plans have
pedestal fans, tables or other work stations. 6.Side been replaced.
aisles in the printing section were very narrow. There 12.) Removed completely and noted for future compliance.
was hardly any space between the tables and side
walls. A person could not even walk freely on the 14.) Thread cutting workers are
aisle.7. Approach to Fire exit from Print Curing section sitting in the main production hall which has 2 proper exits.
was blocked with Bed Press machine.8. Few Exit doors Poly bags obstructing the free movement have been removed.
in the facility open inwards. 9 Evacuation plans were 16.) This is no longer used as a fire exit because a new
missing from most work areas. second exits has been created. Old sign of fire exit created
confusion, which has been removed. Exit permanently closed
as a new exit has been made.
20.) The ramp is for amterials exit/entry only. There are 3 other
exits (one with stairs and two with ramps) for worker
movement. The platform beyond the exit has a spread of 5
feet followed by stable slope, which makes it reasonably safe
to use as and when required.
21.) An overhead string with rings has been provided to hold
H&S.9 Evacuation Requirements and Procedure Noncompliance 10.Most of the aisles in the cutting section were very 10. Aisles will be modified. Ongoing
narrow. 11. Auto spreader blocks aisles in the cutting 11. Removal of old aisles marks.
section. 12.Numerous instances noticed where access 12. Removed immediately.
to passages for workers were completely blocked with 13. To make proper exit.
garments, tables and bins. These workers were 14. Removal of blocked aisles
completely caged in their work stations. The auditor 15. Thread cutting workers sit in main production hall. Poly
was unable to reach these work stations located on bags obstructions are caused by movement prior to cutting.
the sides of the floor. Approach to these work stations
was blocked from both ends. 13. 2nd Exit from sample
Section 1 was through a window opening into the
cutting section. Wooden steps were provided on both
sides of the window. However, when the auditor
attempted to cross over, the steps on the cutting side
gave away . The steps provided on both the sides were
weak and unstable. 14. 2nd Exit from the Sampling
section was blocked with tables and a cupboard on the
Cutting Side. There was no way that anyone could use
this Exit. 15. There was no 2nd exit from thread cutting
area in the finishing section located on the 3rd floor.
The passage was completely blocked with tables.
H&S.9 Evacuation Requirements and Procedure Noncompliance 16. Air coolers were installed on the Fire Exit from 16. Exit is no longer needed; as second exit was created. 3-12-08 overhead string with rings has been provided to hold Ongoing
Sampling section in building no.3. 17 Workers were 17. Removal of old aisles marks. the pipe in while in use.
seen standing on aisles and working in most of the 18. Second exit as noted. Proper exit created.
work areas. 18.Sample section I had only 1 exit.19. 19. Noted. Exit is adequate for 5 workers.
Area in front of Exits from room housing printing tables 20. This exit is only for exit/entry of materials.
1 & 2 was very narrow. 20 There was a drop of 21. Electrical safety policies will be reviewed and implemented.
approximately 3 feet in the floor level of the area in front 22. Fire evacuation policy noted.
of Exit from knitting section. No fencing or guard was 23. Fire signage posted inside of lift along control panel.
installed to prevent accidents during an emergency 24. Factory will review policy and update.
evacuation. Also no signage was posted near this area
to warn workers of the drop in floor level. 21 Electric
cable connecting heaters with the mains, in the printing
section were loose, close to workers feet and crossing
walk ways. 22. Due to constraint of space, factory
conducted fire evacuation drills section wise, once
every 3 months. The complete factory was evacuated
once a year. 23. “Do not use lift incase of fire” signage
was not posted near the lifts 24 2 to 3 workers seen
working in the same work station .
H&S.9 Evacuation Requirements and Procedure Noncompliance 25.Few work stations on the sewing floor were 25. All work stations have been cleared for easy accessibility. Completed
overcrowded with workers caged in with garments and Increased Committee meetings and regular follow-up by
tables from all sides. They had no access to the members. Close monitoring by Nike representatives.
passages. The auditors could not reach few of these
work stations
H&S.10 Safety Equipment and First Aid Training Noncompliance 1.Instructions for First Aid is not posted near the kits as 1. First aid instructions posted immediately. Confirmed 3-12- Done 3-12-08 1.) Posted instructions near first aid boxes. Completed
required by Law. 2. List of supplies in the First Aid kit 08. 2.) Maintaining as per law and Doctor's advice.
do not meet legal requirements. 3. Approach to few fire 2. First aid supplies to be updated. 3-12-08, being maintained 3.) ESH committee members have been asked to take care
extinguishers were seen blocked with garments and per law and Doctor's advice. of it and situation has improved a lot.
fabric bundles. 3. Blocked areas removed immediately.
11
FLA Code/Benchmark Compliance Status Remediation Status
Description of noncompliance, risk of noncompliance or Company Company Remediation Plan Target Factory Response Company Follow-Up (March 12, 2008) Documentation Completed, Pending,
uncorroborated evidence of noncompliance Internal Audit Completion Date (optional) On-going
Findings
(optional)
H&S.11 Personal Protective Equipment Noncompliance 1. Excessive floating fiber noticed in the sewing floors. 1. Vacuum cleaners provided. Ventilation to be reviewed. Done 3-12-08 Completed
Workers complained of lint on their hair and face which 2. Refresher training for proper use of PPEs to be provided. 1.) has been ensured that all workers wear masks. ESH
was aggravating the sinus and asthma allergy in many 3. Tag guns will be properly marked. committee members have also been assigned to take care of
instances.2. None of the operators were using the eye 4. Finger guard will be provided. it.
shields installed on over lock machines.3.Tag guns 5. & 6. Provided appropriate PPEs in all departments and will 3.) Individual tag guns have been provided to packing workers
were not marked. 4.Snap button machine did not have provide refresher training. which are properly marked. Any removed mark shall be
a finger guard. 5. Band knife operator uses mesh 7. Operators provided with proper masks and trained for replaced.
gloves only on 1 hand. 6. Few workers in the dyeing protection. Refresher of training will be provided. 6.) Factory has provided proper PPEs in all departments.
section were not using ear plugs, gloves and Training has also been given to all the workers. Regular
appropriate shoes. 7. Over lock operators were not refresher trainings on use of PPE are also given. Further
using respiratory masks. Excessive floating fiber were refresher training is being imparted to eliminate such type of
seen in the area which was also noticed on workers’ rare occurrences.
hair. 7.) Overlock operators are provided masks and are trained to
wear these masks for protection against fluff but in some
cases workers take the mask off to communicate with fellow
workers and then continue to keep them off. We are
encouraging and re-training the workers to wear masks.
H&S.13 Chemical Management and Training Noncompliance 1. Chemical storage area in the dyeing section was 1. Chemical area was accessed only the appropriate Done Chemical store is 3-12-08. 1.) Accessible to dyeing employees only. Authorized Completed
open and easily accessible to employees. 2.Containers employees. 2. Containers contained glue for the printing located between relative entry display boards are placed.
with chemicals used for Printing were lying open near process. Workers trained for proper usage. chemical sections.
the printing tables.
H&S.17 Ventilation/Electrical/Facility Installation and Maintenance Noncompliance 1. Few open electric junction boxes noticed. 2.Few 1. Noted. Action taken. Done or 1/1/08 3-12-08. 1. Boxes closed immediately. Supervisors of area Ongoing
Pedestal fans were connected to the mains without a 2. Noted. Action taken. have been directed accordingly.
plug. 3.Temperatures recorded in the facility were 3. Temperatures not consistent across factory floors or 2. ESH committees have been asked to look at these issues
ranging from 95 to 110 degrees F. 4. Ventilation was throughout the year. and report to the management.
very poor in the work areas. 5.Lighting levels recorded 4. Continuous improvement in ventilation system. 3. This finding is not consistent across all factory floors,
was ranging between 52 lux to 230 lux on few sewing 5. Alignment of light to be assigned. throughout year. Factory has improved cooling system.
machines and 285 lux in the print curing section . 6. Brushed fabric. Add vacuum process. 4. Modifications are being made to improve the efficiency of
Lighting Level recorded on few checking stations in the 7. Total of 7 accidents in 2007; 0.035% total. Documentation the system. Additional air washers are being added to improve
finishing sections was 410 to 480 lux. 6. Excessive lint will be implemented. the air circulation/cooling. The job as been awarded and the
seen on all electrical installations.7. Review of Accident vendor has promised to complete the job latest by 4/30/08.
register revealed instances of many workers being 5. The reading will be impaired on those few check points
sent to Hospital for falling unconscious. since they were taken next to an inventory of black color
garments. Lighting levels are maintained at and above the
required levels consistently rechecked the lighting levels.
Some engineering modifications are being made to improve
light level where required which is expected to be completed
by 3/31/08.
6. Injury/illness will be tracked and analyzed.
H&S.18 Machinery Maintenance and Worker Training Noncompliance 1.Needle guards were missing from few sewing 1. Noted. To be immediately corrected. Done 3-12-08 1.) - Needle guards and eye guards have been Completed
machines. Few had been tampered rendering them 2. Attending to the few missing belt guards. replaced.
ineffective. 2. Belt guards were missing from most 3. Noted. Pedal mats to be added. 2.) they are present on most machines. We are immediately
sewing machines 3. Pedal Mats were missing from attending to the few missing ones. Belt guards, pulley guards
most sewing machines. Many workers were noticed have been replaced.
operating these machines bare feet. 3.) Pedal mats are being replaced. Workers have been
instructed to ensure not to operate machines bare foot.
H&S.20 Bodily Strain Noncompliance 1 .Few workers with standing jobs were seen wearing 1. Awareness/training will be implemented for proper footwear. 1/1/2008 3-12-08 - 1.) Awareness training has been given to lady Ongoing
high heeled footwear. 2. Workers were provided with 2. Noted. Will review. workers housed to wear high heels. Moreover ESH
hard stools to sit on . committee members have also been instructed to take care of
it in their respective departments.
2.) Factory working on same.
H&S.22 Sanitation in Factory Facilities Noncompliance 1. Water Seepage was noticed on the walls in the 1. Noted. Will repaint. Heavy rains due to 3-12-08. 3.) Only work in process packed fabric is kept in Ongoing
finishing area in Sampling section located in building no. 2. Only work that is in process is placed on floor. Noted. monsoon season. cutting area. It is only taken out of the polybag just before
3. 2. Fabric was seen kept on the floor in the cutting 3. Repeat from #2. spreading on the table. 4.) Waste material is removed at the
section .3. Fabric was seen kept on the floor in the 4. Waste material is discarded at the end of each shift. end of every shift.
cutting section. Confirmed 3-12-08. 5.) Noted and will work for immediate improvement.
4.Excessive amount of waste material comprising of cut 5. Noted and immediate improvement made. 3-12-08.
ends and cartons were seen piled up near building
three. 5.Housekeeping standards were poor. All work
areas were littered with cut ends of fabric.
H&S.23 Toilets Noncompliance Number of toilets for males were inadequate. Noted. Plan in place to upgrade after recent worker increase. Done Completed
H&S.25 Food Preparation Noncompliance Factory did not have a Canteen as required by Law. Currently the factory has a space restraint. Public canteens are 3-12-08. Factory would want to do it properly, but currently we Ongoing
available to workers during break time within 59 meters cannot due to space constraints. However public canteens are
outside of factory. available at less than 100 meters from the factory and workers
are freely allowed to go outside during break.
H&S.26 Drinking Water Noncompliance Cool drinking water was not available as required by Water system is to be upgraded by central chiller, which is now Done 3-12-08. Drinking water stations have been provided outside Completed
Law. functional. the production floor.
12
FLA Code/Benchmark Compliance Status Remediation Status
Description of noncompliance, risk of noncompliance or Company Company Remediation Plan Target Factory Response Company Follow-Up (March 12, 2008) Documentation Completed, Pending,
uncorroborated evidence of noncompliance Internal Audit Completion Date (optional) On-going
Findings
(optional)
Other Noncompliance 1.Factory did not have Welfare and Safety officers as 1. As per law, welfare officer is assigned. Done 3-12-08. Ongoing
required by Law.2.. Review of record of grievances 2. Record or grievances posted and provided. Workers have 2.) All grievances received are reviewed and recorded.
received in the Suggestion / Grievance boxes for Aug been re-trained to wear PPE during required work only. Remedial action taken and posted on the notice boards in
07 revealed that workers felt uncomfortable to use the Workers in dying section required to wear PPE only at the time production halls for workers awareness. However
PPE due to excessive heat on the production floors. of loading/unloading of the lot and dosing of chemicals. management advices to provide more regular impact training
Drinking water points provided for ladies was also being 3. Noted and will implement by training and observation. to build awareness among workers on grievance channels
used by male workers.3.Particulars of Room ( Working 4. As per provisions as such liability the amount paid by the available and its functioning.
space in work areas ) - FORM I (Rule 38 ) was not company. 3.) Will be done.
being maintained as required by Law 4.Factory did not 4.) As per provisions in Section 10-B (2) and (4) in case of any
have a group insurance for Death , Partial , Full , such liability the amount is paid by the company. This is being
Temporary and Permanent disability and fortnight strictly adhered to by the factory. According to the law, factory
income benefit for employees, as required by Law either has to have Group Insurance or pay the equivalent
amount as compensation covered by Group Insurance.
Factory is following the law and has the examples when in past
it has paid such compensations.
FOA.5 Employer Interference/Constitution, Elections, Administration, Noncompliance As per the Management the representatives in the List of the members have been posted along with Done 3-12-08. Factory will look into the same and follow the process Ongoing
Activities and Programs Joint Worker management committees had been photographs. No conclusive response at this point in time. It is in next round of selection of committee members.
nominated by the Management. . unprecedented requirement in Pakistan Government and there
is no instance of such or similar practice in the industry.
Nonetheless, since this is a compliance and labor laws
requirement the factory is deliberating with consultants for long-
term sustainable solution.
FOA.14 Severance Pay Noncompliance Terminal dues were not being paid within the time Final dues to be paid to each and every employee after Done 3-12-08. Final dues are paid to each and every employee after Ongoing
stipulated by the local law clearance to individual's service. their clearance from all the departments. This at times takes
more time than stipulated. Factory to work on system to
ensure that all full and final settlements are cleared in
stipulated time.
FOA.26 Grievance Procedure Risk of noncompliance Workers interviewed were not aware of any worker List of the members have been posted along with Done 3-12-08. Factory to work on strengthening their training and Ongoing
committees or Joint Worker – Management photographs. Half of the committee is comprised of factory education programs. Factory working on developing an HR
committees. workers. Committee meetings at least monthly. Grievances team that can manage the training more effectively.
and remediation are discussed and action agreed.
Proceedings posted for workers information.
HOW.1 General Compliance Hours of Work Noncompliance Review of Time Records of Security Guards revealed There are 0 cases of any worker warning in excess of 16 hours 1/1/2008 3-12-08. No excessive OT noted for any security guard from Completed
that on few occasions they had worked for 16 to 24 and for isolated cases for some working up to 16 hours in 2 1/08.
hours per day continuously shifts. Such instances only occur in departments that are
running 24 hours in three shifts and are caused when the next
shift workers/guards do not show up for duty. Working to
control such happenings.
HOW.2 Rest Day Noncompliance 1.Review of documents collected from the Production 1. Factory continues to progressively reduce OT and from Feb 3/1/2008 3-12-08. 1.) Factory has been working progressively reducing Ongoing
floor revealed that factory had been working on all 2008 all excessive OT has been controlled. OT and from Feb 08 all excessive OT has been controlled at
weekly rest days over the past 3 months. 2. Factory did 2. Factory is providing 7th day of rest for all workers. the factory.
not provide a Compensatory off, for work done on rest Exceptions noted. Factory is continuing to remediate with an 2, 3 & 4.) Factory has been able to control working on weekly
days. 3. Instances noticed where few workers had effective reliever system. (3/12/08) offs and now all workers are getting one day off in 7.
worked 12 to 13 days continuously without a day of 3. Piece rate has been converted to permanent. Implementing Exceptions noted where some workers are still working for
rest. 4. Most workers interviewed stated that they do system to eliminate isolated cases. weekly offs and no compensatory offs provided. Factory still
not get a weekly off 4. Same as above. working on continued remediation.
HOW.6 Time Recording System Noncompliance 1.Daily wage workers were issued a Temporary Entry 1. Practice due to extraordinary work conditions. Proper Done 3-12-08. 2.) Factory has maintained separate sheets for Completed
Pass valid for 1 week. They were issued a time card for documentation will be maintained. 2. The OT documentation workers to have better understanding of OT hours and
that week only. Incase they continued to work, fresh will be corrected for October salary. Reduction in the number payment. However as advised the practice has been
time card and pass were issued with a different of such workers has been able to reestablish a system of discontinued and from 10/07 all payment made in full on wage
registration number for another week. Hence, every proper documentation of daily wage workers. Bar coded gate slip.
week a fresh time card and pass was issued.2.The passes are made and job contract is signed of each worker.
auditors had access to the main server after repeated Attendance is recorded through bar code scanning and the
requests. Review of options in the software revealed a payment is calculated on basis of this attendance and wage
software menu link which said “Reports – Actual OT”. slip issued.
When opened, this file had data pertaining to actual
hours of work. . On investigating further, the
Management stated that they officially reflected only 2
hours of OT per day . This is to comply with
requirements of few brands that the factory produces
for. OT hours worked beyond 2 hours a day were
recorded separately and compensated through a
voucher. This practice was not disclosed during
interview with the Management.
HOW.8 Overtime/Reduced Mandated Overtime Noncompliance Review of actual time records collected from the main Factory will properly monitor all OT for all shifts and will Done 3-12-08. OT for rest while piece rated workers have been Completed
server, revealed that Housekeeping workers & Security continue to work to improve processes as per the legal limit. controlled and excessive OT has progressively reduced from
Guards worked more than 60 hours a week. Few piece Reduction in the number of such workers has been able to Nov 07 onwards. Nil excessive OT recorded for month of Feb
rated workers had worked up to 148 hours of overtime reestablish a system of proper documentation of daily wage 08. OT for security and housekeeping also controlled and no
in July 07 and had worked up to 82.5 hours per week. workers. Bar coded gate passes are made and job contract is excessive OT noted since Jan 08.
signed of each worker. Attendance is recorded through bar
code scanning and the payment is calculated on basis of this
attendance and wage slip issued.
HOW.12 Extraordinary Business Circumstance/Overtime Explanation Noncompliance Though workers signed on the consent form for working Noted. Will add hours. 12/1/2007 3-12-08. From Feb 08 factory has added a column for Completed
overtime, hours of overtime work to be done were not estimated OT hours in the OT consent form. Workers are now
mentioned on these sheets informed of the OT hours they are expected to work at the
time of signing the consent form.
HOW.13 Public Holidays Noncompliance Factory had worked on a national holiday ( Aug 14, 07 In extraordinary workloads and to meet deadlines the factory 12/31/2007 3-12-08. In order to meet deadlines factory was operational on Ongoing
– Independence Day ). was operational on said holiday. Factory will improve to work Aug 14. All workers were paid OT and compensatory leave as
zero scheduled Sundays. per law. Factory assured that going future all voluntary
consents will be maintained.
HOW.18 Annual Leave/Wage Payments Noncompliance Yearly and half yearly returns for Holiday with pay was Noted with corrective action. 1/1/2008 3-12-08. As per factory the same is maintained on computer Completed
not maintained as required by Law. systems in same format as required by law.
13
FLA Code/Benchmark Compliance Status Remediation Status
Description of noncompliance, risk of noncompliance or Company Company Remediation Plan Target Factory Response Company Follow-Up (March 12, 2008) Documentation Completed, Pending,
uncorroborated evidence of noncompliance Internal Audit Completion Date (optional) On-going
Findings
(optional)
HOW.20 Sick Leave/Restrictions Noncompliance Factory provided sick Leave for 8 days instead of 16 Implement the revisions required by local law. Done Completed
days a year as required by Law
Other Noncompliance 1.Information on Actual shift timings of workers could 1. All shift schedules were provided at opening meeting with Done Shifts vary to control 3-12-08 Department wise shifts list has been prepared and Ongoing
not be produced till the end of the audit on day two. the exception of one, which was later provided. 2. In order to traffic at factory gates. factory is working on consolidating some shifts. As it is a
2.Though the Management stated that few sections control traffic at entry gates, schedules were staggered. vertical unit working on continuous production model with
work on 3 shifts i.e. from 6 am to 2pm, 2pm to 10 pm Provided display of shift schedule for all the departments. different processes like spinning, knitting, dyeing and
and from 10 pm to 6am, few workers were seen garmenting, factory has to maintain different shifts.
entering the factory at 3 pm. The management later Management has been suggested to try to consolidate shifts if
stated that the cutting section worked on 3 shifts from 7 same is possible
am to 3 pm, 3pm to 11pm and from 11pm to 7 am.
WBOT.2 Minimum Wage Noncompliance 1.Calculation of wages for days worked did not comply 1. Wages to be paid as per law with the 26-day payroll Done 3-12-08. #1-OT rate calculation corrected to comply with local Completed
with legal requirement. Factory calculated wages based formula, this wage calculation has been applied with effect on law requirements. From 11/07 wages onwards factory
on number of days in the month instead of 26 as October 2007 onwards. Minimum wage for skilled workers calculates OT rate on 26 days instead of number of days.
specified by the local law. 2. Minimum Wages were not was announced on August 30, 2007. 2. Revise minimum wage Government notification was announced on 8/30/07, which has
being paid as per skill levels, notified by the local to reflect skill levels and to be implemented. 3. Revised been implemented in 09/07. Arrears were also paid
minimum wage board. E.g. Few Packers were being minimum wage to reflect skill levels and to be implemented. accordingly.
designated as loaders and were being paid Rs 4600 (
unskilled wages ) instead of being paid Rs 4753 (Semi
skilled ).Similarly the Quality checker was being paid Rs
4600 (Unskilled wage) instead Rs 5137.3. Review of
wage records for stitchers (Piece rated) revealed that
they were being paid an unskilled wage of Rs 4600 as
total wage.
WBOT.4 Timely Payment of Wages Noncompliance Night allowance being paid to night shift workers and Night allowance is paid along with salary as production Done 3-12-08. Night allowance was only paid as an incentive for Completed
production incentives being paid to all workers did not incentive. Will implement single sheet documentation. workers working in non-rotational night shift. It was paid on
reflect on wage records. These were being paid through separate sheet for workers to understand this incentive easily.
a separate pay sheet. There was no fixed date for From November salary onwards all incentives paid on single
payment of these incentives. wage slip along with regular wages.
WBOT.5 Holidays, Leave, Legal Benefits and Bonuses Noncompliance 1.Factory provided Sick Leave for 8 days instead of 16 1. Sick leaves will be implemented as per the local law. 2. Due Done 3-12-08. 1.) From Nov 07 onwards 16 days sick leave with half Completed
days as required by Law. 2. Daily wage workers ( to high turnover for daily wage workers. Contributions will be pay is being provided.
approximately 150 workers ) were being frequently applied as per law. Wages to be paid as per law with the 26-
rotated and their time cards and gate-pass were day payroll formula, this wage calculation has been applied
changed every week. This was being done with the with effect from October 2007 onwards. Minimum wage for
intent of ensuring that mandatory benefits were not skilled workers was announced on August 30, 2007.
provided to these workers.
WBOT.8 Calculation Basis for Overtime Payments Noncompliance 1.Calculation for Overtime compensation did not 1. Formula has been reviewed by governmental agency. Done 3-12-08. OT payments have been corrected to comply with completed
comply with legal requirements. Factory calculated OT Follow-up forthcoming. local law requirements. Per hour OT rate now calculated by
compensation by multiplying 80 % of gross salary by 12 2. Implementation as per local law. dividing gross wages 208 and then multiplied by premium rate
months and then divided the result by 313 working days i.e. 2 times.
X 8 hours X 2. By law, full gross salary should be
divided by 208 hours X 2 (i.e. at twice the ordinary rate
of pay). Based on the calculation adopted by the factory
the worker was being compensated at a lower rate than
applicable. E.g. If a worker was earning Rs 4600, he
was being paid overtime at the rate of Rs 35.27 per
hour instead of Rs 44.23. 2. Pay records for July 2007
of piece rated workers being shown on Salary basis
revealed inaccurate calculation for OT compensation.
This calculation was based on an unskilled wage and
not on wage applicable as per skill category.
WBOT.12 Overtime Compensation for Piece Rates and Other Incentive Noncompliance 1.Till June 07, wages for tailors were being paid on This calculation is being further reviewed. It is to reaffirm that Ongoing 3-12-08. The factory is not in noncompliance with any law as Completed
Schemes piece rate basis. Effective July07, these workers were these workers are now employed without exception. Incentive they are paying both minimum wages as well as OT wages in
being paid on a monthly salary basis. As per the calculation is based on production. accordance with law. As advised by auditors they are looking
management, these workers were shown on a monthly at streamlining the incentive program. Factory is working with
salary though they continued to work on piece rate an external consultant to develop more effective incentive
basis. Their OT compensation was being calculated based payment systems based on to worker efficiencies and
based on a monthly salary.The difference between the improved production planning to elevate productivity and also
earnings and actual piece rate earnings was paid as help workers increase their earned wages.
incentive. So far there was no appropriately defined #2-Notification of min. wage for different skill levels was
basis for calculating the incentive being paid.This announced on August 30, 07. Factory adjusted its wages with
system was being introduced to comply with legal Oct 07 salary accordingly and paid arrears for all adjusted
requirements for OT compensation. However, since salaries.
actual work was based on a piece-rate system
calculation of compensation for overtime was not legally
compliant. 2. Pay records for July 2007 of piece rated
workers being shown on Salary basis revealed
inaccurate calculation for OT compensation. This
calculation was based on an unskilled wage and not on
wage applicable as per skill category
WBOT.13 Deposit of Legally Mandated Deductions Noncompliance 1. Legally mandated benefits of Employee Old Age 1. Will follow law and implement immediately. Done 3-12-08. 1.) -Factory is now contributing towards legally Completed
Benefit and Social Security were not being extended to 2. According to law there is no concept of nomination; rather mandated benefits for daily wage workers also from
Daily Wage Workers. The Factory was not contributing inheritance. Factory feels it is being implemented. December 07 onwards.
towards these benefits as required by Law. 2. Member
application, declaration of share, nomination for minor /
non minor for Provident benefits was not maintained in
the facility.
14
FLA Code/Benchmark Compliance Status Remediation Status
Description of noncompliance, risk of noncompliance or Company Company Remediation Plan Target Factory Response Company Follow-Up (March 12, 2008) Documentation Completed, Pending,
uncorroborated evidence of noncompliance Internal Audit Completion Date (optional) On-going
Findings
(optional)
WBOT.17 Accurate Calculation and Recording of Wage Compensation Noncompliance Till June 07 wages for tailors were being paid on piece Calculations will be maintained accurately with documentation. Ongoing Ongoing
rate basis. Effective July 07, these workers were being
paid on a monthly salary basis. As per the
management, these workers were being shown on a
monthly salary though they continue to work on piece
rate basis. Their OT compensation was being
calculated based on a monthly salary. The difference
between the earnings and actual piece rate earnings
was paid as incentive. However, there was no formula
for calculating the incentive being paid. This system was
being introduced to comply with legal requirements for
OT compensation as stated by the management.
However, this methodology does not meet legal
standards for piece-rate earnings.
WBOT.18 Accurate Length of Service Calculation Noncompliance Daily wage workers were issued a Temporary Entry Practice occurred during high work load. Immediate action. Done. 3-12-08. Factory is ensuring that every worker is issued a Completed
Pass valid for 1 week. They were issued a time card punch card the day he joins the factory, accurate time keeping
for that week only. Incase they continued to work fresh is recorded from first day itself.
time card and pass were issued with a different
registration number for another week. Hence , every
week a fresh time card and pass were issued. Hence
actual length of service could not be verified.
WBOT.20 Payroll Record Maintenance/Worker Acknowledgement Noncompliance Interviews with Daily wage loaders and loading When the worker has worked for more than one department Done. 3-12-08. Factory has worked on development of a policy for Completed
supervisor revealed that the loading supervisor would he is considered "double duty". Practice to be removed. streamlining daily workers. Daily workers are only employed
collect the wages of these loaders from the accounts for a period of 2-4 days for loading activities at the time of
department by signing on the Daily wages attendance / shipments. Factory now has an active defined policy for
Payment sheet. He would then disburse the wages. management of these workers including their timekeeping,
These sheets did not reflect details of wages paid to wage payments, and social benefits provided. No issues noted
individual loaders. However, workers had in records review from Jan 08 onwards.
acknowledged receipt of wages. Amount received was
not mentioned anywhere . Same system for daily wage
workers was being followed for workers working in the
Waste store, Inverter Section, General store, Fabric
Store and Housekeeping workers. Many payment
sheets had entries reflecting “Wages for double duty”.
Management could not provide any explanation for this
“Double Duty”.
WBOT.21 Record Maintenance Noncompliance 1.Record of service was not maintained for employees 1. Personnel files are maintained that contain all information Ongoing 3-12-08. 1.)Personnel files are being maintained which contain Ongoing
as required by Law.2. Audit reports for Provident Fund regarding service. all the information relating to an individual's service.
accounts for fiscal years 2005 – 06 and 2006-07 were 2. Audit in process. 2.) The audit reports have been received and are available for
not available. As per the Law, these should be 3. No concept of nomination; inheritance is being followed. verification.
maintained in the facility.3. Member application, 3.) Factory yet to work on the remediation of same.
declaration of share , nomination for minor / non minor
for Provident benefits were not maintained in the facility
WBOT.26 Pay Statement Noncompliance Daily wage workers did not receive a wage slip. Noted for immediate correction. Done 3-12-08. All workers including daily wage workers are now Ongoing
provided with wage slips, though the format is not very user
friendly and management has been advised to revise the
format to make it easier for the worker to understand.
Other Noncompliance 1 Factory was not registered with Government 1. Will verify with local authority. 12/31/2007 3-12-08. Ongoing
Apprenticeship Institute as required by Law. 2.Factory 2. Space Restraint. 1..) Factory has checked the same with authorities and has
had not provided a fair price shops required by law. 3. Fund established by Government of Pakistan. Exempt for been informed that if a factory runs any program under the
3.Worker Welfare fund had not been established as 2006, first contribution will be make for 2007 apprenticeship Act, that program should be registered not the
required by Law. factory.
2.) Due to space constraint factory has not been able to meet
the requirement. Also noted that the government run
subsidized utility store is located within 1 kilometer radius of
the factory.
3.) By law, this fund is established by Government of Pakistan.
Factory was exempted from contribution till June 30, 2006.
Subsequently paid up to June 2007. Balance till date yet to be
paid.
Other Noncompliance 1.Abstract of the Local Labour Law were not posted 1. Posted in time office and Garment and Fabric Divisions. 2. Done 3-12-08. Abstract of local labor laws have been posted at Completed
.2. Towards the end of day two of the audit a person All premises were made available to Russell Pakistan office visible height throughout the different department in the
was seen walking into the factory with a polybag personnel. Personally viewed and the yarn store & they made factory.
containing cut pieces. He was carrying a material shift arrangement during peak production which has now 2.) The adjoining premises is a storage yard for excess fabric
transfer document which stated that the pieces were stopped. No cutting work is dong inside yarn store. and yarns. No process is conducted at this facility.
being transferred from unit - Cutting 3 . On further
investigation , it was found that cutting was being done
in a building opposite the factory across the road. One
of the auditors walked into the building with the worker
and noticed cutting operations in progress and a store.
Usage of this building was neither disclosed by the
Management during the opening meeting nor during the
audit procedure. Although this unit was not covered in
the audit a brief walk through revealed numerous
Health & Safety flaws.
15
FLA Audit Profile
Country PAKISTAN
Name of Factory 260257628F
Independent External Monitoring Organization T GROUP SOLUTIONS PVT LTD
Date(s) in Facility August 28-29, 2007
FLA Affiliated Compan(ies) Nike, Inc. & Russell Corp.
Number of Workers 3900
Product(s) KNITS - TOPS & BOTTOMS
Production Processes KNITTING - DYEING - CUTTING - PRINTING - EMBROIDERY- SEWING - FINISHING -PACKING .
FLA Code/Benchmark Compliance Status [Status] Description of noncompliance, risk of noncompliance or Updates (Cite Date of Follow- Third-Party Verification Company Verification Follow-
Completed, Pending, uncorroborated evidence of noncompliance Company Documentatio External Documentatio Company Documentatio
On-going Follow-Up n Verification n Follow-Up n
(Date) (cite date of
GEN 2: Ensure that all Company factories as well as contractors and Noncompliance Completed Most workers interviewed were not aware of the Code planned or
suppliers inform their employees about the workplace standards orally Elements
and through the posting of standards in a prominent place (in the local
languages spoken by employees and managers) and undertake other
efforts to educate employees about the standards on a regular basis.
GEN 3: Develop a secure communications channel, in a manner Noncompliance Completed Nike contact details were not provided in the Code posters
appropriate to the culture and situation, to enable Company employees seen in the work areas. Workers were not aware of any
and employees of contractors and suppliers to report to the Company confidential non-compliance reporting mechanism
on noncompliance with the workplace standards, with security that they implemented by the P.C.
shall not be punished or prejudiced for doing so.
F.9 Employment Records Noncompliance Completed 1. Employment documents were not maintained for Daily
wage workers except for National identity Cards 2. Daily
wage workers were issued a Temporary Entry Pass valid
for 1 week. They were issued a time card for that week
only. Incase they continue to work fresh time cards and
passes were issued with a different registration number for
another week. Hence , every week a fresh time card and
pass were issued
F.13 Worker Ability to Terminate-Freedom of Movement Noncompliance Completed 1.Factory does not have a policy for Termination. 2.
Procedure for disciplinary action/ termination is not defined
by the factory.
Other Noncompliance Completed 1.Discrepancies noticed in the total number of employees
based on department wise breakdown and shift wise
worker breakdown. As per department wise breakdown
,there were 3766 employees. As per shift breakdown , there
were 3900 employees. As per section wise shift breakdown
with timings, there were 3750 employees.2.During the
opening meeting, the management mentioned that they
hired daily wage workers and currently there were
approximately 150 such workers. However, at 11am the
auditors went to the work areas and none of these workers
were available . Review of the time cards punched
revealed that few of these workers entered the factory
between 6 am and 8.30 am . There were few who worked
on the night shifts also . It appeared that these workers
were asked to leave the facility so that they would not be
around during the audit. 3. Some postings were seen in the
time office. Workers did not read these as they had been
instructed to swipe their cards quickly, to avoid over-
crowding, while entering and exiting the factory.
H&A.2 Discipline/Progressive Discipline Noncompliance Completed 1. Factory does not have a policy for Termination. 2.
Procedure for disciplinary action/ termination is not defined
by the factory.
H&S.1 General Compliance Health and Safety Noncompliance Completed 1. Medical check up of all employees for detecting
contagious disease was not conducted in Jan and July
2007 as required by Law. 2. Vaccination for Small pox,
Typhoid and Cholera, as required by Law was not done.
The last vaccination done was in Feb 2004 for Hepatitis (B).
16
FLA Code/Benchmark Compliance Status [Status] Description of noncompliance, risk of noncompliance or Updates (Cite Date of Follow- Third-Party Verification Company Verification Follow-
Completed, Pending, uncorroborated evidence of noncompliance Company Documentatio External Documentatio Company Documentatio
On-going Follow-Up n Verification n Follow-Up n
(Date) (cite date of
H&S.8 Permits and Certificates Noncompliance Ongoing 1. Lift inspection Certificate , Lift operator training record, planned or
Lift maintenance record were not produced for review in
spite of repeated requests. 2. Building stability certificate
was available only for new Building ( B2) . This document
was not available for other buildings. 3. Lime wash and
painting records not maintained as required by Law. 4.
Factory did not have a pressure plant inspection certificate
as required by Law. 5. Only Chemical test report of Drinking
water was available. Biological test report was not
available as required by Law.
H&S.9 Evacuation Requirements and Procedure Noncompliance Ongoing 1. Fire Evacuation Logs did not provide details of number of
workers present during the evacuation. There were no
remarks on the responses from emergency teams. 2. Few
exits had illuminated exit signage which may not be visible
in thick smoke owing to poor illumination. High beam
emergency lights were not installed above exits and on
staircase landings. 3. Aisle and Evacuation route markings
were either missing or faded in most work areas. 4.
Approach to 2nd Exit from Finishing section in Sampling
section located in building no.3 was blocked with garments.
5. Most aisles in all work areas were either partially blocked
or completely blocked with garment bins, pedestal fans,
tables or other work stations. 6.Side aisles in the printing
section were very narrow. There was hardly any space
between the tables and side walls. A person could not even
walk freely on the aisle.7. Approach to Fire exit from Print
Curing section was blocked with Bed Press machine.8. Few
Exit doors in the facility open inwards. 9 Evacuation plans
were missing from most work areas.
H&S.9 Evacuation Requirements and Procedure Noncompliance 10.Most of the aisles in the cutting section were very
narrow. 11. Auto spreader blocks aisles in the cutting
section. 12.Numerous instances noticed where access to
passages for workers were completely blocked with
garments, tables and bins. These workers were completely
caged in their work stations. The auditor was unable to
reach these work stations located on the sides of the floor.
Approach to these work stations was blocked from both
ends. 13. 2nd Exit from sample Section 1 was through a
window opening into the cutting section. Wooden steps
were provided on both sides of the window. However, when
the auditor attempted to cross over, the steps on the cutting
side gave away . The steps provided on both the sides
were weak and unstable. 14. 2nd Exit from the Sampling
section was blocked with tables and a cupboard on the
Cutting Side. There was no way that anyone could use this
Exit. 15. There was no 2nd exit from thread cutting area in
the finishing section located on the 3rd floor. The passage
was completely blocked with tables.
H&S.9 Evacuation Requirements and Procedure Noncompliance 16. Air coolers were installed on the Fire Exit from
Sampling section in building no.3. 17. Workers were seen
standing on aisles and working in most of the work areas.
18. Sample section I had only 1 exit.19. Area in front of
Exits from room housing printing tables 1 & 2 was very
narrow. 20.There was a drop of approximately 3 feet in the
floor level of the area in front of Exit from knitting section.
No fencing or guard was installed to prevent accidents
during an emergency evacuation. Also no signage was
posted near this area to warn workers of the drop in floor
level. 21 Electric cable connecting heaters with the mains,
in the printing section were loose, close to workers feet and
crossing walk ways. 22. Due to constraint of space, factory
conducted fire evacuation drills section wise, once every 3
months. The complete factory was evacuated once a year.
23. “Do not use lift incase of fire” signage was not posted
near the lifts 24 2 to 3 workers seen working in the same
work station .
17
FLA Code/Benchmark Compliance Status [Status] Description of noncompliance, risk of noncompliance or Updates (Cite Date of Follow- Third-Party Verification Company Verification Follow-
Completed, Pending, uncorroborated evidence of noncompliance Company Documentatio External Documentatio Company Documentatio
On-going Follow-Up n Verification n Follow-Up n
(Date) (cite date of
H&S.9 Evacuation Requirements and Procedure Noncompliance 25.Few work stations on the sewing floor were overcrowded planned or
with workers caged in with garments and tables from all
sides. They had no access to the passages. The auditors
could not reach few of these work stations
H&S.10 Safety Equipment and First Aid Training Noncompliance Completed 1.Instructions for First Aid is not posted near the kits as
required by Law. 2. List of supplies in the First Aid kit do
not meet legal requirements. 3. Approach to few fire
extinguishers were seen blocked with garments and fabric
bundles.
H&S.11 Personal Protective Equipment Noncompliance Completed 1. Excessive floating fiber noticed in the sewing floors.
Workers complained of lint on their hair and face which was
aggravating the sinus and asthma allergy in many
instances.2. None of the operators were using the eye
shields installed on over lock machines.3.Tag guns were
not marked. 4.Snap button machine did not have a finger
guard. 5. Band knife operator uses mesh gloves only on 1
hand. 6. Few workers in the dyeing section were not using
ear plugs, gloves and appropriate shoes. 7. Over lock
operators were not using respiratory masks. Excessive
floating fiber were seen in the area which was also noticed
on workers’ hair.
H&S.13 Chemical Management and Training Noncompliance Completed 1. Chemical storage area in the dyeing section was open
and easily accessible to employees. 2.Containers with
chemicals used for Printing were lying open near the
printing tables.
H&S.17 Ventilation/Electrical/Facility Installation and Maintenance Noncompliance Ongoing 1. Few open electric junction boxes noticed. 2.Few Pedestal
fans were connected to the mains without a plug.
3.Temperatures recorded in the facility were ranging from
95 to 110 degrees F. 4. Ventilation was very poor in the
work areas. 5.Lighting levels recorded was ranging between
52 lux to 230 lux on few sewing machines and 285 lux in
the print curing section . Lighting Level recorded on few
checking stations in the finishing sections was 410 to 480
lux. 6. Excessive lint seen on all electrical installations.7.
Review of Accident register revealed instances of many
workers being sent to Hospital for falling unconscious.
H&S.18 Machinery Maintenance and Worker Training Noncompliance Completed 1.Needle guards were missing from few sewing machines.
Few had been tampered rendering them ineffective. 2. Belt
guards were missing from most sewing machines 3. Pedal
Mats were missing from most sewing machines. Many
workers were noticed operating these machines bare feet.
H&S.20 Bodily Strain Noncompliance Ongoing 1 .Few workers with standing jobs were seen wearing high
heeled footwear. 2. Workers were provided with hard stools
to sit on .
H&S.22 Sanitation in Factory Facilities Noncompliance Ongoing 1. Water Seepage was noticed on the walls in the finishing
area in Sampling section located in building no. 3. 2. Fabric
was seen kept on the floor in the cutting section .3. Fabric
was seen kept on the floor in the cutting section.
4.Excessive amount of waste material comprising of cut
ends and cartons were seen piled up near building three.
5.Housekeeping standards were poor. All work areas were
littered with cut ends of fabric.
H&S.23 Toilets Noncompliance Completed Number of toilets for Males were inadequate.
H&S.25 Food Preparation Noncompliance Ongoing Factory did not have a Canteen as required by Law.
H&S.26 Drinking Water Noncompliance Completed Cool drinking water was not available as required by Law.
18
FLA Code/Benchmark Compliance Status [Status] Description of noncompliance, risk of noncompliance or Updates (Cite Date of Follow- Third-Party Verification Company Verification Follow-
Completed, Pending, uncorroborated evidence of noncompliance Company Documentatio External Documentatio Company Documentatio
On-going Follow-Up n Verification n Follow-Up n
(Date) (cite date of
Other Noncompliance Ongoing 1.Factory did not have Welfare and Safety officers as planned or
required by Law. 2. Review of record of grievances
received in the Suggestion / Grievance boxes for Aug 07
revealed that workers felt uncomfortable to use the PPE
due to excessive heat on the production floors. Drinking
water points provided for ladies was also being used by
male workers.3.Particulars of Room ( Working space in
work areas ) - FORM I (Rule 38 ) was not being
maintained as required by Law 4.Factory did not have a
group insurance for Death , Partial , Full , Temporary and
Permanent disability and fortnight income benefit for
employees, as required by Law
FOA.5 Employer Interference/Constitution, Elections, Administration, Noncompliance Ongoing As per the Management the representatives in the Joint
Activities and Programs Worker management committees had been nominated by
the Management. .
FOA.14 Severance Pay Noncompliance Ongoing Terminal dues were not being paid within the time stipulated
by the local law
FOA.26 Grievance Procedure Risk of noncompliance Ongoing Workers interviewed were not aware of any worker
committees or Joint Worker – Management committees.
HOW.1 General Compliance Hours of Work Noncompliance Completed Review of Time Records of Security Guards revealed that
on few occasions they had worked for 16 to 24 hours per
day continuously
HOW.2 Rest Day Noncompliance Ongoing 1.Review of documents collected from the Production floor
revealed that factory had been working on all weekly rest
days over the past 3 months. 2. Factory did not provide a
Compensatory off, for work done on rest days. 3. Instances
noticed where few workers had worked 12 to 13 days
continuously without a day of rest. 4. Most workers
interviewed stated that they do not get a weekly off
HOW.6 Time Recording System Noncompliance Completed 1.Daily wage workers were issued a Temporary Entry Pass
valid for 1 week. They were issued a time card for that week
only. Incase they continued to work, fresh time card and
pass were issued with a different registration number for
another week. Hence, every week a fresh time card and
pass was issued.2.The auditors had access to the main
server after repeated requests. Review of options in the
software revealed a software menu link which said “Reports
– Actual OT”. When opened, this file had data pertaining to
actual hours of work. . On investigating further, the
Management stated that they officially reflected only 2
hours of OT per day . This is to comply with requirements of
few brands that the factory produces for. OT hours worked
beyond 2 hours a day were recorded separately and
compensated through a voucher. This practice was not
disclosed during interview with the Management.
HOW.8 Overtime/Reduced Mandated Overtime Noncompliance Completed Review of actual time records collected from the main
server, revealed that Housekeeping workers & Security
Guards worked more than 60 hours a week. Few piece
rated workers had worked up to 148 hours of overtime in
July 07 and had worked up to 82.5 hours per week.
HOW.12 Extraordinary Business Circumstance/Overtime Explanation Noncompliance Completed Though workers signed on the consent form for working
overtime, hours of overtime work to be done were not
mentioned on these sheets
HOW.13 Public Holidays Noncompliance Ongoing Factory had worked on a national holiday ( Aug 14, 07 –
Independence Day ).
HOW.18 Annual Leave/Wage Payments Noncompliance Completed Yearly and half yearly returns for Holiday with pay was not
maintained as required by Law.
19
FLA Code/Benchmark Compliance Status [Status] Description of noncompliance, risk of noncompliance or Updates (Cite Date of Follow- Third-Party Verification Company Verification Follow-
Completed, Pending, uncorroborated evidence of noncompliance Company Documentatio External Documentatio Company Documentatio
On-going Follow-Up n Verification n Follow-Up n
(Date) (cite date of
HOW.20 Sick Leave/Restrictions Noncompliance Completed Factory provided sick Leave for 8 days instead of 16 days planned or
a year as required by Law
Other Noncompliance Ongoing 1.Information on Actual shift timings of workers could not be
produced till the end of the audit on day two. 2.Though the
Management stated that few sections work on 3 shifts i.e.
from 6 am to 2pm, 2pm to 10 pm and from 10 pm to 6am,
few workers were seen entering the factory at 3 pm. The
management later stated that the cutting section worked on
3 shifts from 7 am to 3 pm, 3pm to 11pm and from 11pm to
7 am.
WBOT.2 Minimum Wage Noncompliance Completed 1.Calculation of wages for days worked did not comply with
legal requirement. Factory calculated wages based on
number of days in the month instead of 26 as specified by
the local law. 2. Minimum Wages were not being paid as
per skill levels, notified by the local minimum wage board.
E.g. Few Packers were being designated as loaders and
were being paid Rs 4600 ( unskilled wages ) instead of
being paid Rs 4753 (Semi skilled ).Similarly the Quality
checker was being paid Rs 4600 (Unskilled wage) instead
Rs 5137.3. Review of wage records for stitchers (Piece
rated) revealed that they were being paid an unskilled wage
of Rs 4600 as total wage.
WBOT.4 Timely Payment of Wages Noncompliance Completed Night allowance being paid to night shift workers and
production incentives being paid to all workers did not
reflect on wage records. These were being paid through a
separate pay sheet. There was no fixed date for payment of
these incentives.
WBOT.5 Holidays, Leave, Legal Benefits and Bonuses Noncompliance Completed 1.Factory provided Sick Leave for 8 days instead of 16 days
as required by Law. 2. Daily wage workers ( approximately
150 workers ) were being frequently rotated and their time
cards and gate-pass were changed every week. This was
being done with the intent of ensuring that mandatory
benefits were not provided to these workers.
WBOT.8 Calculation Basis for Overtime Payments Noncompliance completed 1.Calculation for Overtime compensation did not comply
with legal requirements. Factory calculated OT
compensation by multiplying 80 % of gross salary by 12
months and then divided the result by 313 working days X 8
hours X 2. By law, full gross salary should be divided by
208 hours X 2 (i.e. at twice the ordinary rate of pay). Based
on the calculation adopted by the factory the worker was
being compensated at a lower rate than applicable. E.g. If a
worker was earning Rs 4600, he was being paid overtime at
the rate of Rs 35.27 per hour instead of Rs 44.23. 2. Pay
records for July 2007 of piece rated workers being shown
on Salary basis revealed inaccurate calculation for OT
compensation. This calculation was based on an unskilled
wage and not on wage applicable as per skill category.
WBOT.12 Overtime Compensation for Piece Rates and Other Incentive Noncompliance Completed 1.Till June 07, wages for tailors were being paid on piece
Schemes rate basis. Effective July07, these workers were being paid
on a monthly salary basis. As per the management, these
workers were shown on a monthly salary though they
continued to work on piece rate basis. Their OT
compensation was being calculated based on a monthly
salary.The difference between the earnings and actual
piece rate earnings was paid as incentive. So far there was
no appropriately defined basis for calculating the incentive
being paid.This system was being introduced to comply with
legal requirements for OT compensation. However, since
actual work was based on a piece-rate system calculation
of compensation for overtime was not legally compliant. 2.
Pay records for July 2007 of piece rated workers being
shown on Salary basis revealed inaccurate calculation for
OT compensation. This calculation was based on an
unskilled wage and not on wage applicable as per skill
category
20
FLA Code/Benchmark Compliance Status [Status] Description of noncompliance, risk of noncompliance or Updates (Cite Date of Follow- Third-Party Verification Company Verification Follow-
Completed, Pending, uncorroborated evidence of noncompliance Company Documentatio External Documentatio Company Documentatio
On-going Follow-Up n Verification n Follow-Up n
(Date) (cite date of
WBOT.13 Deposit of Legally Mandated Deductions Noncompliance Completed 1. Legally mandated benefits of Employee Old Age Benefit planned or
and Social Security were not being extended to Daily Wage
Workers. The Factory was not contributing towards these
benefits as required by Law. 2. Member application,
declaration of share, nomination for minor / non minor for
Provident benefits was not maintained in the facility.
WBOT.17 Accurate Calculation and Recording of Wage Compensation Noncompliance Ongoing Till June 07 wages for tailors were being paid on piece rate
basis. Effective July 07, these workers were being paid on
a monthly salary basis. As per the management, these
workers were being shown on a monthly salary though they
continue to work on piece rate basis. Their OT
compensation was being calculated based on a monthly
salary. The difference between the earnings and actual
piece rate earnings was paid as incentive. However, there
was no formula for calculating the incentive being paid. This
system was being introduced to comply with legal
requirements for OT compensation as stated by the
management. However, this methodology does not meet
legal standards for piece-rate earnings.
WBOT.18 Accurate Length of Service Calculation Noncompliance Completed Daily wage workers were issued a Temporary Entry Pass
valid for 1 week. They were issued a time card for that
week only. Incase they continued to work fresh time card
and pass were issued with a different registration number
for another week. Hence , every week a fresh time card and
pass were issued. Hence actual length of service could not
be verified.
WBOT.20 Payroll Record Maintenance/Worker Acknowledgement Noncompliance Completed Interviews with Daily wage loaders and loading supervisor
revealed that the loading supervisor would collect the
wages of these loaders from the accounts department by
signing on the Daily wages attendance / Payment sheet. He
would then disburse the wages. These sheets did not
reflect details of wages paid to individual loaders. However,
workers had acknowledged receipt of wages. Amount
received was not mentioned anywhere . Same system for
daily wage workers was being followed for workers working
in the Waste store, Inverter Section, General store, Fabric
Store and Housekeeping workers. Many payment sheets
had entries reflecting “Wages for double duty”.
Management could not provide any explanation for this
“Double Duty”.
WBOT.21 Record Maintenance Noncompliance Ongoing 1.Record of service was not maintained for employees as
required by Law.2. Audit reports for Provident Fund
accounts for fiscal years 2005 – 06 and 2006-07 were not
available. As per the Law, these should be maintained in
the facility.3. Member application, declaration of share ,
nomination for minor / non minor for Provident benefits
were not maintained in the facility
WBOT.26 Pay Statement Noncompliance Ongoing Daily wage workers did not receive a wage slip.
Other Noncompliance Ongoing 1 Factory was not registered with Government
Apprenticeship Institute as required by Law. 2.Factory had
not provided a fair price shops required by law. 3.Worker
Welfare fund had not been established as required by Law.
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FLA Code/Benchmark Compliance Status [Status] Description of noncompliance, risk of noncompliance or Updates (Cite Date of Follow- Third-Party Verification Company Verification Follow-
Completed, Pending, uncorroborated evidence of noncompliance Company Documentatio External Documentatio Company Documentatio
On-going Follow-Up n Verification n Follow-Up n
(Date) (cite date of
Other Noncompliance Completed 1.Abstract of the Local Labour Law were not posted .2. planned or
Towards the end of day two of the audit a person was seen
walking into the factory with a polybag containing cut
pieces. He was carrying a material transfer document which
stated that the pieces were being transferred from unit -
Cutting 3. On further investigation , it was found that cutting
was being done in a building opposite the factory across the
road. One of the auditors walked into the building with the
worker and noticed cutting operations in progress and a
store. Usage of this building was neither disclosed by the
Management during the opening meeting nor during the
audit procedure. Although this unit was not covered in the
audit a brief walk through revealed numerous Health &
Safety flaws.
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