Dive Brief:
-
Cambodian union president Sithyneth Ry demanded that athleticwear giant Adidas pay severance to 500 factory workers, according to a press release last week from the Clean Clothes Campaign, a nonprofit that advocates for workers’ rights.
-
The union, INTUFE, claims that at the start of the Covid-19 pandemic, workers at the Hulu Garment Factory in Phnom Penh, Cambodia, were sent home temporarily, then were asked to come back and sign their payslips for suspension pay. Below the payslip was a resignation notice, the union says.
-
“Through this trick workers lost their jobs and the severance payment they would have been owed if they had been fired,” according to the Clean Clothes press release. However, Adidas “reject[s] the allegations” that they owe the workers severance pay, an Adidas spokesperson said in an email to Fashion Dive.
Dive Insight:
Ry’s demand, which was made during stops in three separate cities in Germany between May 15 and May 21, was timed to coincide with Adidas’ annual shareholder meeting on May 16.
Ry’s union has previously asked Adidas to use funds from Yeezy products to settle the unpaid severance. In 2023, Adidas conducted two drops of Yeezy products, and previously said it would donate some of the proceeds to organizations combating hate. In Adidas' most recent earnings last month, the latest Yeezy drop generated about 150 million euros, or about $162 million, for the company
The Hulu Factory workers protested the day after they mistakenly resigned, and then turned to their union and international organizations, a spokesperson for Clean Clothes said in an email to Fashion Dive. The cause was taken up by the Workers Rights Consortium and later by the Pay Your Workers campaign, the spokesperson said. Pay Your Workers is an organization founded in the wake of the pandemic that campaigns for other similar cases in the fashion industry.
“While working at the Hulu factory, I had been sending money to my mother regularly. Afterward, I didn’t have any income to send money to my family,” Chhorpesal Chhom, one of the former Hulu workers, said in the release.
Chhom and other workers fell into debt, per the release.
Clean Clothes has “reached out to several major adidas investors” about the case but a spokesperson for the nonprofit said that responses from the activewear giant “ranged from non-committal to deafening silence.”
“All orders were processed and paid in full,” and the case was heard by the Cambodian Arbitration Council, which said it was “unable to find any legal non-compliance,” the Adidas spokesperson said in an email to Fashion Dive. Adidas also said that its production accounted for 5% of the Hulu factory’s total production the year before Adidas ended its contract with Hulu in August 2020.
Clean Clothes said the Cambodian Arbitration Council has been flagged by Human Rights Watch as “politically compromised,” according to a 2022 report. The Workers’ Rights Association, an independent labor monitoring organization based in the United States that investigates labor issues internationally, said that its investigation updated last year “identified 456 Hulu workers who are legally owed an estimated total of US$1.1 million in unpaid benefits.”
“A small sourcing volume does not dismiss a brands’ responsibility to prevent, mitigate and remediate human rights violations at a supplier–especially a violation as [egregious] as this, willfully tricking workers,” the Clean Clothes spokesperson said.
Ry said the union will continue its campaign and will also reach out to other brands that worked with the Hulu factory, such as Walmart, Amazon, Macy’s and LT Apparel.
Supply chain disruptions, such as those seen during Covid, will continue as climate change causes extreme weather and natural disasters, said the Clean Clothes spokesperson.
“Brands can ensure workers do not pay the price for that by signing the Pay Your Workers agreement,” the spokesperson said. “This problem will only get bigger in the coming years.”
INTUFE also represents workers in two factories that still produce for Adidas, Ry said in an email to Fashion Dive. The union is waiting for Adidas to resolve issues such as excessive heat in summer and leaks during the rainy season, Ry said.
In Q1 of 2024, Adidas announced an operating profit of 336 million euros, or $365 million.
