Han Embroidery, Bangladesh

On March 9, 2016, the Fair Labor Association (FLA) accepted for review a Third Party Complaint filed by the University of Washington regarding lack of payment of compensation and benefits at the factory Han Embroidery Ltd in Savar, Bangladesh. FLA-affiliated company Zephyr Graf-X sources from the factory Han Apparels Ltd (“Han Apparels”); Han Embroidery was a subcontracted embroidery factory to Han Apparels.

Informing this assessment was an analysis of Han Embroidery’s closure conducted by the Worker Rights Consortium (WRC).  The WRC found that when the factory closed on October 25, 2015, 168 workers — many of whom were members of the Han Embroidery Ltd Workers Employee Union, affiliated to the National Garment Worker Federation (NGWF) – were affected.  WRC research estimated that the dismissed workers were owed $72,157 in legally mandated benefits, calculated as 30 days of wages for each year of service, calculated based on the worker’s basic wages, plus one month’s advance notice of the retrenchment or payment to the workers of an additional 30 days’ wages minus 30 days’ wages that the workers already received when the factory closed. Zephyr Graf-X and Han Apparels committed to pay the amount of $72,157 in severance pay to the affected 168 former workers of Han Embroidery. Zephyr Graf-X and Han Apparel accepted a severance distribution plan designed by the WRC. The main elements of the plan were: (1) establishing a distribution date and post-distribution deadline for workers to claim their funds; (2) notifying workers of the pending distributions; (3) carrying out the distributions and documenting all payments; (4) if needed, conducting additional outreach to workers who do not present themselves to claim the funds; and (5) establishing a procedure for dealing with any funds that may be left after the distributions. As a result of the intervention of Zephyr Graf-X and Han Apparels, the workers who lost their jobs when Han Embroidery went out of business received final compensation and severance due to them according to Bangladeshi labor law. In developing and implementing a remediation plan to address such payments, Zephyr Graf-X worked closely with the WRC and the NGWF. The FLA has received documentation from Zephyr Graf-X regarding the names of workers at Han Embroidery eligible for the severance pay and due amounts and receipts signed by the workers acknowledging the amounts received and therefore this case is considered as being closed.