English

Supply Chain Innovation

C.S.A. GUATEMALA

Publication date: 
Wednesday, April 24, 2019

On February 6, 2019, the Fair Labor Association received a Third Party Complaint from several former workers at the C.S.A. Guatemala S.A. factory requesting that the FLA investigate allegations concerning noncompliance with the FLA Workplace Code of Conduct and Benchmarks concerning a number of issues relating to Freedom of Association (including with respect to alleged wrongful dismissals), Compensation and payment of benefits, and the overall Employment Relationship.  FLA affiliated company Hanesbrands and non-affiliated company Gap, Inc. had been sourcing product from the factory prior to its closure in January 2019.

On February 15, the FLA accepted the complaint at Step 2 of the Third Party Complaint process and in turn commissioned independent consultants Francisco Chicas and Katya Castillo to conduct an investigation concerning the allegations in the Complaint.  In particular, and as set forth in the Background section of their report, the investigators examined a series of allegations with respect to workers being dismissed without receiving full severance payments to which they were entitled; related issues regarding worker suspensions and terminations in November 2018 and January 2019; the dismissal of six workers in October 2018 allegedly tied to their intention to form a union; failure to pay social security contributions despite making deductions to workers’ pay; and blacklisting of former workers as they sought new employment opportunities in Guatemala.

The investigators conducted a field investigation between March 13-16, 2019 under the Third Party Complaint process concerning the above-noted allegations; their investigation methodology, including all meetings held and records reviewed, is set forth in detail in the final report.  The report includes a series of findings, analysis of information and data related to each allegation in the Complaint, and a series of conclusions followed by recommendations for remediation actions.

At the same time, the investigators outline in their final report a series of challenges encountered, including their inability to gather a complete set of data needed to compile accurate estimates of the total amounts due to the former C.S.A. workers.  They note specifically that while the factory owner and two other members of the factory management team did meet with them and provided some documentation, the investigators were not provided access to critical payroll and related records (including workers’ personnel files) that are essential to such a compilation. (See Page 8 of the final report for additional information on the records not provided.)

As a result, while the investigators were able to produce a thorough report outlining the facts related to the allegations raised in the Complaint and with some estimates as to the amounts still owed to the former workers, additional work is still needed to build on those estimates in the absence of an ability to review actual payroll and related records, including personnel files.  Therefore, the process for documenting the amounts owed remains an open one – building on the information contained in the final report.  The FLA urges the factory owner and management to accede to the ongoing requests from both Hanesbrands and Gap and from the workers and other interested organizations for access to these records to help ensure an accurate final calculation of severance and other amounts owed to the former factory workers, and urges the two companies to continue to press for such access and otherwise remain actively engaged in efforts to ensure an accurate final calculation.

Report type: 
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