Local Nike shoe factory scrutinized for mass layoffs amid COVID-19 – National


Done Anthony Iswara (The Jakarta Post)

Jakarta ●
Tue 25 August 2020

labor rights, COVID-19, Nike, manufacturer, Victory-Chingluh, shoes, layoffs, policy
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The reputation sports giant Nike has earned for taking a pro-worker stance in handling the pandemic hangs in the balance, as a union complains of mass layoffs, pay cuts and underhanded politics in one world famous brand manufacturing partners in Indonesia .

The General Secretary of the Indonesian Labor Movement (GSBI), Emelia Yanti Siahaan, has criticized PT Victory Ching Luh for cutting working days and cutting wages for more than 17,000 workers since July despite union opposition.

PT Victory Ching Luh is a Taiwan-based shoe factory in Tangerang, Banten, which has only produced shoes for Nike since 2018. GSBI and four other unions have rejected the company’s recent pay cuts, Emelia said.

“The rest days are not what the workers want, but it is the decision of the company. So [money lost from] pay cuts due to days off should be returned to the workers,” she said recently, noting that Nike had yet to respond to a letter the union sent her questioning the issue.

She also condemned the union’s lack of involvement in the dismissals; in early April, the company told unions it would lay off 564 workers still on probation.

He then told them again that he would lay off some 4,988 workers on April 21 who worked less than a year, which was less than a quarter of Victory Ching Luh’s 23,000 workers at the time, said Emilia.

Now management had threatened to fire another 7,000 workers if the unions still refused the pay cut.

PT Victory Ching Luh finally responded in an August 31 letter stating that it had “made a difficult decision and undergone organizational restructuring and working day adjustment to ensure the continuity of business operations,” and that the measures taken “have been carried out carefully with thoughtful consideration”.

“We coordinated […] with all unions in the company and consulted with relevant government agencies […] to ensure compliance with Indonesian labor regulations and the company’s collective bargaining agreement established by the bipartisan committee,” the company said in a statement released by its strategy and communications department.

“We have responded openly to all the aspirations of employees conveyed by official and relevant platforms.”

Among the points the company raised in its bipartisan agreement with the unions was that it would “indicate in employee reference letters that the layoff was due to the impact of COVID-19.”

Still, even with COVID-19 as the reason for its decisions, Emelia said the company has yet to claim its losses were caused by Nike order payment cancellations, which would be a breach of its past commitments. to fully pay for completed orders and those in production.

“Don’t put the burden of the impact of COVID-19 solely on the shoulders of workers,” Emelia said.

The pandemic, which continues to spread like wildfire in Indonesia, has claimed not only lives but also the incomes of millions of workers.

In Tangerang, local unions tried to get workers to sign a petition to protest pay cuts, but they faced legal intimidation and signatories were threatened with layoff notices (SP3), said the head of the GSBI.

The head of the union coalition at the Tangerang factory, Suwandi, confirmed that intimidation had taken place.

“The [factory’s] the industry employee relations manager sat in the offices of the union secretariat from morning until afternoon and handed out SP3s whenever [union] leaders tried to get their members to sign the petition,” he said. Jakarta To post Last weekend.

Suwandi said Victory Ching Luh has not been transparent about the status of its orders, even as the company recruits new employees, purchases new machinery and purchases land in Cirebon, West Java.

He claimed the company did not consult unions when it fired workers and simply informed them of the decision. Victory Ching Luh insists he had reached an agreement with one of the five unions on the basis that he employed the majority of the workers.

The latest union report shed light on the treatment Nike suppliers have of its workers.

The brand came under heavy criticism in the early 2000s for its use of overseas “sweatshops” and child labor, prompting it to take steps to improve conditions in its thousands of overseas factories.

Nike Global Communications wrote to To post last Wednesday, saying it was working with its suppliers to support their efforts to respond to the COVID-19 situation. He said he expected them to consider the health and livelihoods of their employees while complying with legal requirements and Nike’s code of conduct as they navigate the current circumstances. .

“Changing and challenging market dynamics mean that Nike and our suppliers must make difficult decisions in the short term, as we work together to mitigate longer-term impacts and develop sustainable viability for their businesses and employees,” wrote the global society.

Nike added that it would continue to place orders while considering the impacts of market dynamics. It would also continue to pay in full for finished goods from all of its suppliers globally, while adhering to previously agreed payment terms for goods in production.

“In the event of canceled orders, our policies and agreements with suppliers are, and always have been, that Nike will pay the appropriate amount of the order, based on the stage of production communicated by our supplier, to allow the supplier to recover costs. associated with the canceled order,” he wrote.

Nike also mentioned that it was working with industry and other global stakeholders to develop “broad-based approaches” to help deal with the current situation.

In response to the question of the layoffs, the executive director of the Indonesian Footwear Association (Aprisindo), Firman Bakri, said on August 14 that past layoffs had only affected a portion of the workers at the factory.

“There are many more that are still guarded [as employees]. With a bit of luck [Victory Chingluh] can quickly recover and recruit their [former] employees again,” he said.

Editor’s note: Article updated to include PT Victory Ching Luh’s response and some minor corrections.


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