Nike supplier in pay scandal

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Nike supplier in pay scandal
Posted Date: 13/01/2012
By AFP


An Indonesian factory producing Nike shoes will shell out $US1 million in unpaid overtime wages to thousands of employees, Nike says.

"An agreement was reached between the factory and the local union and $US1,002,830 will be reimbursed to workers for back wages in accordance with Indonesian labor law," Nike said in a statement.

The company Nikomas Gemilang, which owns the factory in western Java's Banten city, will pay out the wages.

The factory workers won the payout 11 months after an investigation was launched by the union and US-based non-profit Educating for Justice, which has targeted Nike globally in its anti-abuse campaigns.

"Out of the 24,000 employees who work exclusively on Nike shoes, almost 4500 reported working two hours of overtime daily, six days a week," union vice chairman Djoko Haryono told AFP.

"We have 57,000 workers at the factory. The others make shoes for Adidas, Puma and Asics, so if they request it, we will investigate their work hours too."

Haryono said workers making Nike shoes took surveys and reported 593,648 collective unpaid hours.

The dispute settlement comes amid a spate of strikes by Indonesian workers employed by foreign companies, such as French retail giant Carrefour and US mining company Freeport.

Indonesia's growing middle class are demanding better wages and conditions in the rapidly developing nation, which attract billions of dollars annually from investors eyeing the country's natural resources and low labour costs.

Nikomas Gemilang is one of several subsidiaries of the Taiwan-based Pou Chen Group.

Pou Chen came under fire last year when another of its Indonesian factories was accused of physically and verbally abusing workers making Nike's Converse trainers.

AFP
Source link http://www.insideretail.com.au/IR/IRNews/Nike-supplier-in-pay-scandal-3807.aspx