Circular Notice for Employee Timing by srv17896

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									FLA Audit Profile
Country                   Vietnam
Factory name              36038480D
IEM                       Global Standards Vietnam
Date(s) in facility       Jul 29-30, 2005
PC(s)                     PUMA, Reebok International, Ltd., Twins Enterprise, Inc.
Number of workers         2,094
Product(s)                CAP
Production processes      Cutting, Sewing, Packing



                                                                                                                                                                  IEM Findings                                                                                                                      Remediation                                                                                    Updates (Cite Date of Follow up)                        Updates (Cite Date of Follow up)                                                                     Updates (Cite Date of Follow up)                                             Third-Party Verification                              Company Verification Follow up                                                  Company Verification Follow up                                                  Company Verification Follow up
    FLA Code/                 Country Law/Legal                        FLA Benchmark                               Non-compliance                       Risk of         Evidence of    If not        Sources/      Notable                   PC Remediation plan                        Target     Factory Response (Optional)             Company follow up               Documenta               Company follow up            Documentat                Company follow up            Documentation                         Company follow up                           Documentation              Target Completion Date         Status     External     Documenta    Company Follow up (Cite date of planned or follow up Documentat             Status                      Company Follow up                          Documentation                        Company Follow up                         Documentation
  Compliance issue               Reference                                                                                                          Non-compliance          Non-     corrobora Documentation used Features                                                             Completio                                        ( September 29, 2005 )                tion                 ( March 15, 2006 )               ion             (September 22 and October 03,                                             ( June 17-2008)                                                                                               Verification        tion                  visit, if appropriate)                      ion                                             April 23, 2009                                                                December 29, 2009
                                                                                                                                                                        compliance      ted,    for corroborating implement                                                             n Date                                                                                                                                                                 2006)                                                                                                                                                                           (Date)
                                                                                                                                                                       (uncorroborat explain                        ed by
                                                                                                                                                                            ed)         why                        Factory
                                                                                                                                                                                                                  Managem
1. Code Awareness
Confidential non-                                       FLA Principle of Monitoring, Obligation of    Only Reebok has put in place                                                            Visual inspection,              Reebok complies with direct communication                                                          Sticker labels now pasted on the                         One group of workers and another                                                                                                                                                                                                   Completed
compliance reporting                                    Companies: Develop a secure                   direct communications channel                                                           Management                      channels.                                                                                          copies of Puma Code of Conduct.                          group of supervisors who were
channel                                                 communications channel, in a manner           but other PCs do not have such                                                          interview                                                                                                                                                                                   interviewed were also given each a
                                                        appropriate to the culture and situation, to  a system.                                                                                                               Puma will place sticker label on every copy of the                                                 Interviewed workers were also given                      copy of the Puma S.A.F.E. Pocket
                                                        enable Company employees and                                                                                                                                          Code of Conduct indicating the contact information                                                 each a copy of the Puma S.A.F.E.                         Guide
                                                        employees of contractors and suppliers to                                                                                                                             for confidential reporting of cases of non-                                                        Pocket Guide which contains the
                                                        report to the Company on noncompliance                                                                                                                                compliance                                                                                         Code of Conduct and a brief of the
                                                        with the workplace standards, with security                                                                                                                                                                                                                              general guidelines, safety, health and
                                                        that they shall not be punished or prejudiced                                                                                                                                                                                                                            environmental standards and contact
                                                        for doing so.                                                                                                                                                                                                                                                            data for confidential reporting.

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
3. Child Labor
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.
Legal compliance for Juvenile workers are               Employers will comply with applicable laws         At least 4 cases of juvenile                                                       Record review.                  (1) Factory to develop a special policy for juvenile     9/15/2005                                 9/29/2005 - Factory has developed         Puma and       Two separate meetings (one with all       Review of                                                                                                                                                                                Completed
juvenile workers         workers under 18 years of that apply to young workers, i.e., those                workers hired due to lapses in                                                     Mgt & HR staff                  workers as required by law. Juvenile workers can                                                   the juvenile labor policy that complies   Reebok         managers and union representatives        training
                         age (Art.119 - Labor           between the minimum working age and the            hiring procedures, working in                                                      interview                       be recruited for simple work for 7 hrs per day with                                                with legal requirements. Factory has      monitors       and another with 46 supervisors and       documents,
                         Code).                         age of 18, including regulations relating to       violation of company                                                                                               full pay and no overtime. (2) Factory to improve its                                               also developed its recruitment            have           line leaders) were held on Sept. 30,      interview
                         -Treatment for juvenile        hiring, working conditions, types of work,         policy/procedure and without                                                                                       recruitment procedure to require the human                                                         procedure, but the procedure needs        reviewed a     2005, the day after the first follow up
                         workers: not to exceed 7       hours of work, proof of age documentation,         special provisions as required                                                                                     resources staff to ensure that no juvenile workers                                                 to be improved. The recruitment           copy of the    visit, to discuss the new policies and
                         hrs/day with full pay and no and overtime                                         by local law.                                                                                                      are recruited for heavy/dangerous work. The                                                        policy and procedure were                 juvenile       procedures, labor law provisions on
                         overtime work (Art.122 -                                                                                                                                                                             human resources manager shall review monthly                                                       communicated to human resources           labor policy   juvenile and female workers, factory
                         Labor Code); 14 days for                                                                                                                                                                             reports concerning juvenile laborers. (3)                                                          staff, but not to the production staff.   and are        rules and rules on discipline.
                         annual leave (Art.74 -                                                                                                                                                                               Recruitment staff and HR manager shall be                                                          New Target Completion Date:               keeping it
                         Labor Code)                                                                                                                                                                                          disciplined in case of infractions.                                                                10/15/05                                  on file.

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.
Progressive Discipline Article 84 & 85 of Labor      Employers will utilize progressive discipline,        Monitors found several                                                             No documentation                Factory to conduct training on discipline system for 9/15/2005                                     9/29/2005- Factory conducted a                           Penalties are now specified for each review of          Aside from the regular orientation of                                                                                                                                      Completed
                         Code.                       e.g., escalating discipline using steps such          discipline cases for issues not                                                    Discipline records              supervisors, managers and personnel staff.                                                         training in discipline system for                        of the three classifications of       training          new workers, the factory also an
                         Decree 41/CP dated Jul      as verbal warning, written warning,                   specified in work rules and/or                                                     review.                         Training records and material is to be submitted                                                   personnel staff. However, the                            offenses. Briefing of supervisors and documents,        annual reinforcement training every
                         6th 1995.                   suspension, termination. Any exceptions to            which did not follow proper                                                        Mgt & HR interview.             and maintained on file. Any infraction (arbitrary                                                  discipline system is to be revised so                    line leaders was done on Sept. 30,    interview         September. Before the scheduled
                                                     this rule, e.g., immediate termination for            discipline procedures in                                                                                           decision of discipline) shall be disciplined.                                                      as to specify the penalties for each                     2005.                                                   retraining, new rules or policies are
                                                     theft or assault, shall be in writing and clearly     compliance with local law.                                                                                                                                                                                            classification of offense. No training                                                                           announced to workers by supervisors
                                                     communicated to workers.                                                                                                                                                                                                                                                    for supervisors and workers was                                                                                  and a copy of such are posted on the
                                                                                                                                                                                                                                                                                                                                 conducted. New deadline: 10/16/05                                                                                bulletin boards.

Training of                                             Employers will provide training to managers Facility has no training on                                                               No documentation.               Factory to conduct training in discipline system for     9/15/2005                                 9/29/2005 - Factory conducted a                          Penalties are now specified for each review of          Aside from the regular orientation of                                                                                                                                      Completed
Management in                                           and supervisors in appropriate disciplinary progressive discipline system                                                             Mgt, supervisors &              supervisors, managers and personnel staff.                                                         training in discipline system for                        of the three classifications of       training          new workers, the factory also an
Disciplinary Practices                                  practices                                   for workers, supervisors and                                                              workers interview               Training records and material is to be submitted                                                   personnel staff. However, the                            offenses. Briefing of supervisors and documents,        annual reinforcement training every
                                                                                                    managers to maintain                                                                                                      and maintained on file. Any infraction (arbitrary                                                  discipline system is to be revised so                    line leaders was done on Sept. 30,    interview         September. Before the scheduled
                                                                                                    compliance with code and law.                                                                                             decision of discipline) shall be disciplined.                                                      as to specify the penalties for each                     2005.                                                   retraining, new rules or policies are
                                                                                                                                                                                                                                                                                                                                 classification of offends. No training                                                                           announced to workers by supervisors
                                                                                                                                                                                                                                                                                                                                 for supervisors and workers was                                                                                  and a copy of such are posted on the
                                                                                                                                                                                                                                                                                                                                 conducted. Deadline: 10/16/05                                                                                    bulletin boards.
5. Nondiscrimination
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
Fire Safety Health         Article 96 of the Labor        Employer will comply with applicable health      Two fire extinguishers were                                                        Visual inspection.              Factory to verify that fire extinguishers are not   9/15/2005                                                                                               Inspection of production areas            visual        All fire extinguishers were well-        visual                                                                                                                            Completed
and Safety legal           Code: "Machinery,              and safety laws and regulations. In any          blocked/not kept clear in security                                                                                 blocked in all areas of the factory. To make this                                                                                                           showed that a) access to all fire         inspection,   maintained and not obstructed.           inspection,
compliance                 equipment, materials, and case where laws and code of conduct are               office and canteen                                                                                                 sustainable, factory to develop a health and safety                                                                                                         extinguishers were clear. b) The          document      Health and Safety Committee              document
                           items which have strict        contradictory, the higher standards will                                                                                                                            system that covers all H&S aspects (Fire safety,                                                                                                            production area was cluttered and         review        developed inspection checklist and       review
                           requirements for               apply. The factory will possess all legally                                                                                                                         work safety, health and hygiene, food supply, PPE                                                                                                           workers were not following the safety                   has designated staff member to
                           occupational safety and        required permits                                                                                                                                                    policy, training, etc). A H&S committee should be                                                                                                           signs. c) There is a functioning                        ensure that all extinguishers and
                           hygiene must be                                                                                                                                                                                    established and a senior staff member designated                                                                                                            Health and Safety Committee but it                      production areas are maintained
                           registered and verified in                                                                                                                                                                         accountable for all aspects.                                                                                                                                should be more active in enforcing                      obstruction free.
                           accordance with                                                                                                                                                                                                                                                                                                                                                and sustaining the health and safety
                           regulations of the                                                                                                                                                                                                                                                                                                                                             system. Further follow up needed.
                           Government"
Document                                                  All documents required to be available to         Emergency evacuation plan is                                                      Visual inspection,              Factory posted evacuation plans at workshop              9/15/2005                                                                                          Evacuation plans with color codes for visual            Evacuation plans are included in the                                                                                                                                       Completed
Maintenance/                                              workers and management by applicable             not posted in the factory and                                                      records review.                 gates, but not inside production floors. Factory to                                                                                                         each line/area are now posted at the inspection         general safety inspection checklist.
Accessibility                                             laws (such as policies, MSDS, etc.) shall be     does not clearly show aisles for                                                                                   post fire evacuation plans on production floors and                                                                                                         production sections, and are easily
                                                          made available in the prescribed manner          egress, exit path and assembly                                                                                     train workers again in evacuation procedures. To                                                                                                            visible.
                                                          and in the local language or language            area outside.                                                                                                      make this sustainable, factory to develop a health
                                                          spoken by majority of the workers if different                                                                                                                      and safety system that covers all H&S aspects
                                                          from the local language.                                                                                                                                            (Fire safety, work safety, health and hygiene, food
                                                                                                                                                                                                                              supply, PPE policy, training, etc). A H&S
                                                                                                                                                                                                                              committee should be established and a senior
                                                                                                                                                                                                                              staff member designated accountable for all
                                                                                                                                                                                                                              aspects.
Evacuation Procedure Article 102 of labor code,         All applicable legally required or                 Arrows and markings for aisles                                                     Visual inspection.              Factory to improve arrows and demarcation for            9/15/2005                                                                                          Directional arrows and demarcation        visual        Exit aisles in most sections are kept    visual          Observation found condition improved. However in some Observation and site              30-Sep-08                                                            - Factory has planned to renovate all exit aisles in the   Written      On-going     1. The renovation started on Sep 20, 2008 and finished       Written plan,       All directional arrows in the production lines have been   Construction
                     Circular No.08/LDTBXH-             recommended elements of safe evacuation            to emergency exits are lacking                                                                                     aisles in cutting & packing sections, and make                                                                                                              lines for aisles are now clear.           inspection    clear, but directional arrows and        inspection      aisles are still obstructed by fabric and materials and inspection ( picture)                                                                                premise, the renovation proposal has been approved         plan,                     in late December 2008.                                       construction        replaced by stone arrows, the replacement was carried      contract, approved
                     TT dated 11 Apr 1995 &             (such as posting of evacuation plans,              or unclear in cutting and finishing                                                                                sure that aisles are also kept clear of boxes and                                                                                                           However, aisles in most sections are                    demarcation lines faded in some                          found exit arrows are scratched, as workers used to                                                                                                          by Factory Top Mgmt and will be started on Sep 20,         construction              Factory walkthrough reflected all exit aisles are kept       proposal            out from Jul to early Sep 2009 with a total 119 stone      budget allocated
                     Circular No.23/LDTBXH-             unblocked aisles/exits, employee education,        sections of factories 1 and 2.                                                                                     products. In addition, factory to develop a health                                                                                                          obstructed by crates and material.                      production sections.                                     drag the materials container over the arrow sign .                                                                                                           2008.                                                      proposal                  clear with directional arrows made of stone. Currently all   approved by         arrows following color standards of white color with       for this renovation
                     TT dated 19 Sept 1995              evacuation procedures, etc.) shall be              Marked aisles are not                                                                                              and safety system as described above.                                                                                                                                                                                                                                        Factory has committed to change the painted arrow with                                                                                                       - All directional arrows (totally 107 arrows) will be      approved                  directional arrows in the production lines are               Factory Top Mgmt,   green back ground have been finished
                                                        complied with and workers shall be trained         consistently kept clear of                                                                                                                                                                                                                                                     Further follow up needed                                                                                         ceramic tile based on adidas color coding standard to                                                                                                        made of stone following safety color standards.            by Factory                demarcation painted and factory has planned to replace       budget forecast     All aisles are kept free of obstruction, the working
                                                        in proper safety, first aid, and evacuation        materials, boxes and product                                                                                                                                                                                                                                                                                                                                                                    solve the existing repetitive issues.                                                                                                                        - Construction materials were ready at the factory at      Top Mgmt,                 by stone by Jun 2009                                         On-going            condition is very neatly at the time of visit
                                                        procedures                                         crates.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      the time of visit                                          budget                                                                                                     Completed.
                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   forecast




PPE                       Article 101 of the Labor      Workers shall wear appropriate protective          Most recent HS environment test                                                    Record review &                 Factory to provide PPEs for buttoning workers,        9/15/2005                                    H&S Committee established on          PPE policy         Workers are wearing the correct           visual                                                                                                                                                                                   Completed
                          Code                          equipment (such as gloves, eye protection,         report shows excessive noise in                                                    factory walkthrough             and post signs and instructions at every work                                                      4/28/05, and policies including PPE   and training       PPE and safety instruction signs are      inspection,
                          Circular No. 10/1998/TT-      hearing protection, respiratory protection,        embroidery and buttoning areas.                                                                                    station. In addition, factory to develop a health and                                              developed on 8/29/05. Health &        pictures           posted.                                   document
                          BLDTBXH dated May             etc.) to prevent unsafe exposure (such as          Embroidery workers generally                                                                                       safety system as described above.                                                                  safety policies were communicated     and                The remediation is completed.             check
                          28th, 1998                    inhalation or contact with solvent vapors,         wear hearing protection, but                                                                                                                                                                                          to all employees during the three     material
                                                        noise, dust, etc.) to hazardous elements           buttoning workers do not                                                                                                                                                                                              days training on 9/20, 22, 24.        maintained
                                                        including medical waste.                           have/wear PPE consistently                                                                                                                                                                                                                                  on
                                                                                                                                                                                                                                                                                                                                                                       monitors'
                                                                                                                                                                                                                                                                                                                                                                       file.
Chemical                                                All chemicals and hazardous substances             Inadequate safety procedure                                                        Visual inspection,              Factory to provide chemical labels and MSDS in           9/15/2005                                 Factory has provided chemical         MSDS in            MSDS in local language and labels         visual        At the time of the visit, no chemicals                                                                                                                                     Completed
Management                                              should be properly labeled and stored in           systems for storage and use of                                                     records review.                 Vietnamese in all workplaces and the warehouse.                                                    labels and MSDS in Vietnamese in      Vietnames          for chemicals are available in            inspection,   were found in any warehouse or
                                                        accordance with applicable laws. Workers           chemicals in factory: large 20 l.                                                                                  In addition, factory to develop a health and safety                                                all workplaces and training on use of e, training        production / spot cleaning areas and      document      office. Factory management
                                                        should receive training, appropriate to their      containers of Acetone found in                                                                                     system as described above.                                                                         chemical was conducted on 8/19/05. pictures              chemical warehouse. Safety                check         confirmed that they have shifted to
                                                        job responsibilities, in the safe use of           the production workshop,                                                                                                                                                                                              H&S committee was set up 4/28/05, and                    instruction signs are posted as                         regular soap for spot cleaning.
                                                        chemicals and other hazardous substances           offices, storage etc. without                                                                                                                                                                                         and the health & safety policy was    materials,         mentioned above.
                                                                                                           proper labels or warnings. Spot                                                                                                                                                                                       developed 8/29/05. Health & safety    H&S policy
                                                                                                           cleaning stations with exhaust                                                                                                                                                                                        policy was communicated to all        maintained
                                                                                                           ventilation and PPE available,                                                                                                                                                                                        employees during the three days       in monitors'
                                                                                                           but no signs or instructions for                                                                                                                                                                                      training on 9/20, 22, 24              file.
                                                                                                           use of PPE or chemicals.
                                                                                                           MSDS posted in English only.

Sanitation in Dining      Decision 4128/2001/QD-        All food preparation shall be prepared,                                                  Workers eat all at once                      Worker interview &              Factory to discuss ways to improve the food              8/31/2005                                 Factory has provided more food            Visual         The cost of meal is increased from       document       Unlike in previous interviews when       document                                                                                                                          Completed
Area                      BYT dated October 3,          stored, and served in a sanitary manner in                                               and complain portions                        visual inspection               service and quality with the union and the food                                                    trolleys and designated areas for the     inspection     VND 6,800 to 8,000. Aside from the check,               workers complained about the food,       check, visual
                          2001                          accordance with applicable laws. Safe                                                    are small & service is                                                       contractor.                                                                                        trolleys in the canteen. Further                         main counter for food distribution,      visual         no complaints were made about the        inspection
                                                        drinking water should be available in each                                               disorderly resulting in a                                                    In addition, the factory should separate canteen                                                   observation required concerning                          satellite stations for food trays have   inspection     food quantity or quality. Food
                                                        building.                                                                                rush to get food. Lack                                                       floors by department. If this is still not sufficient,                                             additional action.                                       been designated to make food                            distribution, as observed during
                                                                                                                                                 of system, order, or                                                         especially for departments with a large number of                                                                                                           distribution faster. The auditors                       mealtime, was relatively orderly.
                                                                                                                                                 lines is a potential                                                         workers, the factory should consider having                                                                                                                 asked the factory to install directional
                                                                                                                                                 safety hazard and                                                            staggered meal breaks. Furthermore, the factory                                                                                                             arrows to guide the flow of traffic for
                                                                                                                                                 cause of conflict                                                            should arrange a queue system for workers in the                                                                                                            workers when getting food trays.
                                                                                                                                                 among workers.                                                               canteen and arrange food trays such that there will
                                                                                                                                                                                                                              be a smooth flow as workers pick up food trays,
                                                                                                                                                                                                                              obtain food and move out of the line.



7. Freedom of Association and Collective Bargaining
Employers will recognize and respect the right of employees to freedom of association and
collective bargaining
8. 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

Wage Benefits                                           Employers will communicate orally and in                                                 No clear policy for                          Records review.                 It is 'performance bonus' with ABC grades.         9/15/2005                                       9/29/2005 -The bonus system has           (9/29/2005)    Revised system (effective Oct. 7,        document       Bonus scheme for Embroidery         document                                                                                                                               Completed
Awareness                                               writing to all employees in the language of                                              determining “Sensitive”                      HR & workers                    Workers are aware of productivity standards, but                                                   been improved, but it does not            Puma and       2005) now indicates the amount of        review,        Section was revised and workers are review,
                                                        the worker the wages, incentive systems,                                                 bonus for workers.                           interview                       the bonus is subject to conditions of no warning                                                   clearly indicate the amount of bonus      Reebok         bonus that can be earned; effect of      interview      well aware of it. All workers may   interview
                                                        benefits and bonuses to which all workers                                                Bonus is based on                                                            and full attendance (no absence without notice,                                                    for every type of work. There is no       review the     one day leave had been removed.                         avail of bonuses depending on their
                                                        are entitled in that company and under the                                               productivity attendance                                                      allowed absence not over 1 day, no lateness).                                                      rule regarding the impact of leaves       bonus          However, the bonus system in                            performance. Performance
                                                        applicable law                                                                           and other factors, but                                                       Since workers do not fully understand the system,                                                  taken by the bonus earner. Factory        system.        Embroidery Section limits the                           standards are relatively clear.
                                                                                                                                                 system appears                                                               factory must re-communicate it to all workers and                                                  management did not communicate                           number of persons entitled to the
                                                                                                                                                 arbitrary and open to                                                        post the standards on production floors. The bonus                                                 with workers concerning how the                          bonus to only 10 per shift. Factory
                                                                                                                                                 abuse. It is neither                                                         system must provide the name of accountable                                                        bonus is computed or how it is                           was advised to adjust this policy to
                                                                                                                                                 clear nor                                                                    person so that workers can report any unfair                                                       earned/calculated. New Deadline:                         ensure that all workers are eligible for
                                                                                                                                                 comprehensible to                                                            treatment.                                                                                         10/15/05                                                 the bonus.
                                                                                                                                                 workers.                                                                                                                                                                                                                                 New deadline: April 20, 2006.
9. 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

Overtime Limitations                                  Except in extraordinary business              Some workers worked 1-2          Records review.     Factory must revise the working hours policy and       9/15/2005                                       (9/29/2005) New working hours           (9/29/2005)                                                        The OT policy is clearly understood                                                                                                          Completed
                                                      circumstances, employees will (i) not be      Sunday per month during period   Workers, HR & Mgt   procedures to include a procedure to monitor                                                           policy is developed and dated           Puma and                                                           by workers who were interviewed. It
                                                      required to work more than the lesser of (a) covered by audit without          interview.          working hours involving other departments in the                                                       8/1/05. The procedure is that the       Reebok                                                             is also included in the company
                                                      48 hours per week and 12 hours overtime or compensating day off as                                 process (planning, production). Factory must                                                           production units must plan overtime     review the                                                         handbook distributed to all workers.
                                                      (b) the limits on regular and overtime hours required by code and law.                             enforce the compensation for time off in case of                                                       work 4 days in advance and submit       new                                                                No excessive OT or work on rest day
                                                      allowed by the law of the country of                                                               overtime hours on a rest day.                                                                          the list of workers who agree to work   working                                                            was found during the visit.
                                                      manufacture or, where the laws of such                                                                                                                                                                    overtime. Human resources must          hours policy
                                                      country will not limit the hours of work, the                                                                                                                                                             enforce the compensation in cases       and training
                                                      regular work week in such country plus 12                                                                                                                                                                 of overtime hours on a rest day. The    pictures.
                                                      hours overtime; and (ii) be entitled to at                                                                                                                                                                working hours policy was
                                                      least one day off in every seven day period.                                                                                                                                                              communicated to the employees on
                                                      An extraordinary business circumstance is a                                                                                                                                                               8/20, 22, 24.
                                                      temporary period of extra work that could
                                                      not have been anticipated or alleviated by
                                                      other reasonable efforts

Overtime Limitations                                  Except in extraordinary business              Some workers worked in excess    Records review.     Factory must develop a procedure to monitor            9/15/2005                                       (9/29/2005) Factory has not                            What the factory did / will do to    managemen      New facility was in operation, and        management   Based on the computerized record the Highest OT found Documentation Check             Completed   OT policy was in place, the commitment to comply with      OT Policy,    Pending   1. Written procedure to monitor working hours which           OT Policy, HR
                                                      circumstances, employees will (i) not be      of 60-hour code limits during    Workers, HR & Mgt   working hours that takes into account the activities                                                   developed a procedure to monitor                       reduce overtime:                     t interview,   new workers have been recruited.          interview,   from YTD is 179 hrs in sewing lines E.                                                            60hrs/week was made by the factory's top                   HR                      involves all depts. has been developed in October 2008.       Management
                                                      required to work more than the lesser of (a) period covered by audit.          interview.          of other departments (planning, production, Union,                                                     working hours which involves other                     a. hired more than 500 new workers   document       Working hours have been under             document                                                                                                       management.                                                Manageme                Also, the written OT monitoring procedure were                interview, workers
                                                      48 hours per week and 12 hours overtime or                                                         etc.). Factory must submit a written plan how to                                                       departments. There is no written plan                  during the last 4 months             review,        control, except a few particular cases review          Randomly check on the monthly OT record from Jan to                                               - Workers interviews reflected OT is under control,        nt interview,           developed in October 2008.                                    interviews, weekly
                                                      (b) the limits on regular and overtime hours                                                       reduce the working hours in particular                                                                 for how to reduce working hours in                     b. added 10 more embroidery          visual         slightly exceeded 60 hrs per week.                     April, no excessive OT is found.                                                                  weekly OT is 2-3days/week and 3hrs/day on average          workers                 - Trainings on working hours monitoring procedures            OT tracking report,
                                                      allowed by the law of the country of                                                               departments.                                                                                           particular departments with high                       machines                             inspection     Recruitment of workers for the new                     '- In Line A & B, out of 32 selected workers, the highest                                         - Weekly OT tracking records are available, any OT         interviews,             have been provided to Mgmt level that includes                Factory monthly
                                                      manufacture or, where the laws of such                                                                                                                                                                    working hours; There is only a                         c. One more factory (opposite the                   facility will continue in order to reduce              OT was 18,5 hrs OT in April .                                                                     excessive will be recorded and reported to Factory         weekly OT               supervisors and line leaders on Oct 14, 2008. 63              internal
                                                      country will not limit the hours of work, the                                                                                                                                                             commitment to comply with 60-hrs                       existing one) to be operational in                  OT for any workers who surpass the                     - In Cutting, out of 35 selected workers record, the                                              Management. However, through documentation review          tracking                participants in total, training materials and all training    assessment report
                                                      regular work week in such country plus 12                                                                                                                                                                 requirement.                                           April 2006                                          60 hours/week.                                         highest OT was 36 hrs in March                                                                    reflected there were more than 20 packing workers          report, Fty             records were available at the time of visit                   Completed
                                                      hours overtime; and (ii) be entitled to at                                                                                                                                                                                                                                                                                                                                  - Factory have a system to track down OT by weekly                                                worked up to 62.5hrs/week in May 2008 due to late          monthly                 - Interview conducted to 10 supervisors and line leaders
                                                      least one day off in every seven day period.                                                                                                                                                                                                                     Further monitoring needed                                                                                  check up : first step HR reported weekly OT to                                                    delivery.                                                  internal                reflected their fully understanding of the OT Policy and of
                                                      An extraordinary business circumstance is a                                                                                                                                                                                                                                                                                                                                 production for any workers passed over 9hrsOT/week                                                - Factory conducted monthly internal assessment that       assessment              how to monitor OT in a sustainable manner.
                                                      temporary period of extra work that could                                                                                                                                                                                                                                                                                                                                   then will be allowed to registered one more day OT to                                             covered both HSE and Labor, all findings will be           report                  - Time in/out and OT tracking records review from Oct
                                                      not have been anticipated or alleviated by                                                                                                                                                                                                                                                                                                                                  meet 12 hrs/week. But if workers have already achieved                                            shared among Departments.                                                          2008 to Apr 2009 reflected OT is under control, no OT
                                                      other reasonable efforts                                                                                                                                                                                                                                                                                                                                                    12hrs then, they are not allowed to register for OT. This                                         - Written procedure to monitor working hours which                                 violation was found after the last audit in Sep 2008.
                                                                                                                                                                                                                                                                                                                                                                                                                                  OT registration is signed by Adm Mgr, Production Mgr                                              involves all Depts such as planning, production, HR,                               For sustainability, it is suggested factory to conduct OT
                                                                                                                                                                                                                                                                                                                                                                                                                                  and GM                                                                                            Trade Union is still pending. Fty to finish the written                            Policy and OT monitoring procedure to Mgmt level on
                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    procedure on how to monitor OT and send to adidas                                  a frequent basis
                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    SEA for review (Deadline: Oct 15, 2008)
                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    - Fty to provide trainings on working hours monitoring
                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    procedures to all Fty Mgmt especially for Supervisors
                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    and Line Leaders




10. 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.
Accurate recording of                                 Employees will be paid for all hours worked Electronic time system is not      Records review.     Factory to enforce the use of electronic system to     9/10/2005   9/29/2005- Instructions for card                                            (9/29/2005)    The entire process of                 managemen There have been some errors            management          Per documentation review, the back payment has been         Documentation check and               - Monthly Payroll records reviewed from Jan to Sept        Manageme On-going       1. Written Leave Request approval process has been            Management
OT hours worked                                       in a workweek. Calculation of hours worked used consistently and               Mgt, HR & workers   produce electronic reports that must include daily                 swiping were posted on the                                                  Puma and       computerization from time keeping to t interview, swiping and timing difference in the interview,          settled for 101 workers in June 2006 with workers           available in place for                2008 compare with payslips and leave request               nt interview,           developed on Oct 10, 2009 which clearly states that           interview, worker
                                                      must include all time that the employer     accurately. Manual time records    interview.          time in & out of every individual. Manual records                  bulletin board and at the time                                              Reebok will    payroll preparation was completed     document    payment of leaves taken due to late  document            signature on the payroll record.                            verification                          approval forms resulted accurate record and wage           worker                  leave requests should be submitted 3 days in advance          interview, time
                                                      allows or requires the worker to work       are used instead for calculating                       should only be used in case of inconsistency, and                  machines on 8/1/2005. Verbal                                                review the     and applied in the Feb. 2006 payroll. review      submission of necessary documents. review                                                                                                                  calculation                                                interview,              and will be approved within 1 day of submit. From then        in/out records of 3
                                                                                                  payroll resulting in cases of OT                       each case of inconsistency must receive the                        communication to employees was                                              card           Some redundant data were placed in                But time reports match working hours                                                                                                                       - Randomly check time in/out, payrolls, payslips           time in/out             HR staff will notify and keep track all approved leave        selected workers
                                                                                                  paid incorrectly. Correct                              signature of the human resources manager.                          conducted on 08/20, 22, 24. The                                             swiping        wrong column as noted in the                      in payroll records and back wages                                                                                                                          compare with leave request approval forms of 7             records of 3            requests for payment follow-up.                               together with their
                                                                                                  payment of OT pay cannot be                            Workers shall be trained monthly on the electronic                 computer software is to be                                                  instructions   February 2006 payroll. Factory to                 were paid as shown on subsequent                                                                                                                           workers (3 embroidery workers, 2 sewing workers and        selected                - Training on this new leave request approval process         payslips
                                                                                                  verified in the absence of clear                       system, including swipe card instruction. Swipe                    revised so it produces electronic                                           and            review the system, and ensure that                payroll and confirmed by workers.                                                                                                                          2 packing workers) from May to Aug 2008 resulted           workers                 have been provided to 63 Supervisors and Line Leaders         Completed
                                                                                                  and reliable time records.                             card instruction is to be posted on bulletin boards                reports of working hours and                                                interview      the payroll is free from any error,                                                                                                                                                                          accurate time recording and correct wage calculation       together                on Oct 15, 2008. Trainings for workers have been
                                                                                                                                                         and close to swiping machines. The HR manager                      payroll records. New Deadline:                                              workers.       whether mathematical or otherwise.                                                                                                                                                                           - On-site interview to 7 workers reflected the time        with their              conducted on Oct 14, 16, 21 and 23 2008. All training
                                                                                                                                                         shall be accountable for maintaining accurate time                 11/1/05                                                                                    New deadline: April 20, 2006                                                                                                                                                                                 keeping system is effective, all their working hours and   payslips                materials and records were available at the time of
                                                                                                                                                         records.                                                                                                                                                                                                                                                                                                                                                                   leave information were recorded and paid properly                                  audit.
                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    It is suggested factory to come up with a written Leave                            - Interview conducted to 10 randomly selected
                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    Request approval process which clearly mentions                                    Supervisors and Line Leaders reflected their fully
                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    timeline for having leave's request approved, due date                             understanding of the leave request approval procedure
                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    for submitting these requests to all relevant Dept                                 - Workers interview reflected leave request were
                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    (Supervisor/HR) and next steps to communicate to                                   implemented in compliance with the leave approval
                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    ensure info of Leave will be timely updated and won't                              procedure.
                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    impact to worker payment
                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    - Fty to provide trainings on the leave request approval
                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    process to ALL workers and related Dept to ensure
                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    their fully understanding and consistent implementation




Miscellaneous

								
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